Paul Phelan

March 26, 2013

This example is a complex one which details more than one apparent abuse. The most serious of these was the decision to ground a commercial charter operator based on ten unsubstantiated allegations, and then to publish the allegations on the CASA website.

Although it may be claimed that analysing a 13-year-old event is pointless, readers are reminded that the patterns of regulatory conduct we record are all too familiar in more recent events, as are the identities of some of the CASA employees who are still with the regulator.

Before any meaningful investigation had taken place, Cairns-based seaplane operator Aquaflight Airways, was shut down by the Civil Aviation Safety Authority’s
suspension of its Air Operator Certificate on 17 August 2000 for 28 days “pending investigation of alleged breaches of the Act, regulations and Orders.”

The action was stated to have been taken under Section 28BA(3) of the Civil Aviation Act 1988, and the suspension was renewed for two further consecutive 28-day terms. It was finally lifted when the owner was forced by the financial outcomes of the closure, to sell his business.

The following analysis was prepared with the assistance of a former CASA flying operations inspector and Team Leader Flying Operations. Extracts from CASA documentation are highlighted in blue typeface.

Analysis of the Civil Aviation Safety Authority’s actions.

The allegations were based on information provided by three pilots who were all known to one another, working in unison, after one of them had been dismissed.

This analysis of the ten allegations against the operator demonstrates that the suspension of the AOC was not necessary “in the immediate interests of safety” without examining whether the unsubstantiated allegations had merit. In other words, had CASA been motivated to assure the operator was a compliant operator rather than a discredited operator, initiatives were available to its officials to achieve that assurance without exercising sanctions which had the inevitable outcome of closing down a commercial aviation operation at the peak of a business season. The allegations and an analysis of their validity and Civil Aviation Safety Authority responses are detailed below.

The relevant section of the act as invoked by CASA was:

Subdivision E—Conditions of AOC

28BA  General conditions

(3)   If a condition of an AOC is breached, CASA may, by written notice given to its holder, suspend or cancel:

(a)   the AOC; or

(b)   any specified authorisation contained in the AOC;

whether or not the breach is continuing.

This is a clear admission that the allegations, because they were still under investigation, were still not substantiated at the time the decision was made. The following is the text of the entry published on CASA’s web site. The underlining is headed for our emphasis:

Regulatory action

Where CASA has reasonable grounds to believe there has been a serious breach of the Civil Aviation Act or the Civil Aviation Regulations by an aviation organisation, CASA is required to take appropriate regulatory action.

For regular public transport, charter and aerial work aviation operators this may involve varying, suspending or cancelling their Air Operator’s Certificate.

For aviation maintenance organisations this may involve varying, suspending or cancelling their Certificate of Approval.

Before taking action to vary, suspend or cancel a certificate, CASA provides operators and organisations with written details of the facts and circumstances that CASA believes warrant the proposed action and, except in a case involving an immediate safety threat, provides them with a reasonable opportunity to show cause why the action should not be taken.

CASA’s decisions to vary, suspend or cancel a certificate are reviewable by the Administrative Appeals Tribunal. CASA advises all operators and organisations of their right to have CASA’s decision reviewed.

Action has been taken against the following organisations:

Aquaflight Airways Pty Ltd Cairns Queensland: Suspension of Air Operators Certificate for 28 days from 17.8.00, pending investigation of alleged breaches of the Act, regulations and Orders.

The announcement on the CASA web site went on to detail the actual allegations:

Regulatory Action
Aquaflight Airways Pty Ltd Cairns Queensland

Suspension of Air Operators Certificate for 28 days pending investigation of alleged breaches of the Act, regulations and Orders.
Authority: Subsection 28BA (3) of the Civil Aviation Act 1988.
Date of effect: Thursday 17 August 2000
Air Operators Certificate: No N40151816 authorising charter and aerial work

Grounds for suspension

Breach of condition imposed on the AOC by paragraph 28BA (1) (a) of the Civil Aviation Act 1988, which requires that the holder of the AOC comply with all requirements of the Act, regulations and Orders applicable to the holder.

Provisions of the Act, regulations and Orders allegedly breached

  • Subsection 20AB (2) of the Civil Aviation Act (carrying out maintenance without an appropriate licence)
  • Subsection 23 (2) of the Civil Aviation Act (carriage of dangerous goods other than in accordance with the regulations)
  • Civil Aviation Regulation 43B (failure to record total time-in-service of aircraft on maintenance release)
  • Civil Aviation Regulation 47 (1) (failure to record major defects in aircraft in maintenance release)
  • Civil Aviation Regulation 5.55 (breach of directions in relation to flight time limits by pilots as set out in Civil Aviation Order 48.1)
  • Civil Aviation Regulation 120 (using meteorological forecasts and reports made without authority of Bureau of Meteorology or CASA)
  • Civil Aviation Regulation 133 (1) (d) (commencing flight without all required maintenance on the aircraft having been carried out)
  • Civil Aviation Regulation 172 (1) (flight under the visual flight rules below 2000ft when unable to navigate by reference to the ground or water)
  • Civil Aviation regulation 233 (1) (b) (commencing a flight where aircraft exceeds gross weight limitations)
  • Civil Aviation Regulation 283 (making false statements on documents furnished in accordance with the regulations)

Notes:

  1. When the above material was published on the web site, CASA did not provide the operator with written details of the “facts and circumstances” that it believed warranted the proposed action. Instead it provided Aquaflight only with the allegations which it had listed on its web site. Being deprived of the detail of the allegations, Aquaflight was thus placed in a position from which it could not prepare a proper response.
  2. The implication from this action must therefore be that CASA believed this was “a case involving an immediate safety threat.”
  3. At that point therefore, CASA failed to provide the certificate holder with a reasonable opportunity to show cause why the action should not be taken.
  4. There is no apparent mechanism which provides a certificate holder with the opportunity to put to legal test the assessment that ‘an immediate safety threat exists.’ In fact, CASA does not even identify the individual officer who makes the assessment. This places operators and other certificate holders in a position from which there is no defence against arbitrary suspension.
  5. At 5 pm on the last day of the 28-day suspension, Aquaflight received a faxed letter from CASA’s Area Manager North Queensland, George Ivory, again detailing the alleged facts and circumstances and offering the company:

(a)           a further 28 days in which to show cause “why I should not recommend to a delegate that the AOC issued to Aquaflight be cancelled on the basis of the facts and circumstances set out above.” and

(b)           “an informal conference to discuss the facts and circumstances raised in this notice.”

  1. By separate letter from the delegate, Laurie Foley, almost immediately afterwards, the operator was advised of the further suspension for a second 28-day period “to enable the conclusion of the investigation.”

Comment:

The tactic of advising the additional 28-day suspension for the stated reasons can only be described as that of a storm trooper mentality. As CASA well knows, a business which has been left without cash flow for 28 days, and has been given no indication of the direction CASA intends to take at the expiry of the 28 day period, cannot plan, recruit, borrow funds or engage in marketing activity unless its future is clear. The penalties inflicted by two successive suspensions are therefore several magnitudes more severe than those ever able to be obtained as a result of adherence to due legal process; and they are inflicted by an individual without legal training or validated and documented evidence.

Additionally, CASA Director Mick Toller had said:

“The decision to suspend Aquaflight’s AOC was made on the basis of evidence in CASA’s possession that strongly suggests that Aquaflight poses a serious air safety risk.”

Mr. Toller offered no evidence or analysis to support that assertion; and there was no evidence that the decision maker was technically and legally qualified to make that assessment and to provide data to support it.

On the contrary, Aquaflight Airways had been operating for many years without an air safety incident of any sort.

Also the majority of “incidents” referred to in the letter of suspension were matters that were pilot responsibility rather than operator responsibility.

Section 28BA of the Civil Aviation Act makes no reference to “immediate safety threat.” Those words are the words of the Civil Aviation Safety Authority in the attached document, and no doubt they were drawn from the Civil Aviation Safety Authority “Enforcement Manual”, which was at that time unavailable to the public pending a review of its enforcement practices. CAR 268 uses similar words when it considers suspending a pilot licence. The words are reasonable only if there is “an immediate safety threat”.

While it is not contested that CASA should be able to take positive action, if the regulator was concerned over public perceptions of procedural fairness, a fairer application of justice would be apparent if any such action was taken under a Court Order.

The questionable issue is how, and by whom, the genuine issue of what constitutes a “serious safety threat” can be evaluated with due regard to public safety, natural justice, the rules of procedural fairness, and impartiality.

In this context there is also a huge question mark over the emotive misuse of the word “safety”, which is further evaluated in this section.

The operator is effectively out of business at this point. There is no cash flow to sustain property rental, staff wages, aircraft lease or other financial payments, let alone to mount a legal defence. Yet this operator has not injured any person or had an accident, and has had no charges brought against it, and none of the charges has been proven.

1.       Subsection 20AB (2) of the Civil Aviation Act (carrying out maintenance without an appropriate licence) “a person must not carry out maintenance unless licensed:” Imprisonment 2 years

If the Civil Aviation Safety Authority believed an unlicensed person carried out maintenance on an aircraft, the Authority could have grounded that aircraft immediately by use of a Code ‘A’ Aircraft Survey Report (ASR).

It was also open to the Civil Aviation Safety Authority to institute a prosecution against the alleged offender.

Comment: Had these options been exercised there would have then been no immediate safety threat and therefore no valid reason for suspending the certificate. If the Civil Aviation Safety Authority was convinced of the accuracy of the allegation and did not ground that aircraft or institute a prosecution, someone in the Civil Aviation Safety Authority should have been suspended. No maintenance was carried out by the operator in other than approved and supervised conditions.

2.       Subsection 23 (2) of the Civil Aviation Act: (carriage of dangerous goods other than in accordance with the regulations) “a person must not carry out maintenance unless licensed.” Imprisonment 2 years.

If the operator did carry the alleged dangerous goods, then there can be no reason not to prosecute. While under the threat of prosecution, it is very unlikely the operator would continue to carry more dangerous goods..

Comment: Had these options been exercised there would have then been no immediate safety threat and therefore no valid reason for suspending the certificate. If CASA did not ground that aircraft, someone in CASA should be suspended

3.       Civil Aviation Regulation 43B (failure to record total time-in-service of aircraft on maintenance release) “At the end of the days flying the time in service must be recorded on the maintenance release” Penalty 25 units ($2500). The operator is accused by unidentified individuals as having breached that requirement.

If the Civil Aviation Safety Authority believed that time in service has not been recorded the Civil Aviation Safety Authority should issue a Code ‘A’ ASR grounding the aircraft until the time in service has been corrected and if required any maintenance then due would have to be done before the aircraft could fly.

Comment: Had that option been exercised, there would have then been no immediate safety threat and therefore no valid reason for suspending the certificate. If the Civil Aviation Safety Authority was convinced of the accuracy of the allegation and did not ground that aircraft or institute a prosecution, someone in the Civil Aviation Safety Authority should have been suspended. Safety would not be an issue if there were only a few flight hours not recorded as we all know the aircraft will not fall out of the sky for the sake of a few flight hours. There is now no immediate safety threat and the suspension of the certificate is not warranted in the interests of “immediate safety concerns.” The failure of pilots to comply with requirements to note should not be used to the detriment of the operator.

4.       Civil Aviation Regulation 47 (1) (failure to record major defects in aircraft in maintenance release):If the holder of the CoR, operator or pilot becomes aware of a major defect (and other things) an entry must be made on the maintenance release”

If CASA became aware of a “major defect” not being entered on a MR then CASA should have issued a Code ‘A’ ASR grounding the aircraft immediately. If CASA did not do that then CASA is at fault and the staff member should be suspended.

If CASA did issue a Code ‘A’ ASR grounding the aircraft until the “major defect” (if it was in fact a major defect) then that defect would have been rectified before the aircraft flew.

Comment: There would then have been no immediate safety threat. Safety would no longer be an issue and there would be no warrantable grounds for the suspension of the certificate.

5.       Civil Aviation Regulation 5.55 (breach of directions in relation to flight time limits by pilots as set out in Civil Aviation Order 48.1)

CAR 5.55 is the head of power for flight and duty limitations. This CAR would probably be the most breached CAR of all the regulations. Experience shows when an Operator is caught out breaching this regulation the Operator will desist immediately, in some cases minor re-offences will occur after a period of time. It is extremely difficult to imagine this regulation standing alone being a “serious threat to safety”

Comment: Had these matters been acknowledged and appropriately addressed, there would then have been no immediate safety threat. Safety would no longer be an issue and there could be no warrantable grounds for the suspension of the certificate on the grounds of ‘immediate safety concerns.’.

6.       Civil Aviation Regulation Civil Aviation Regulation 120 (using meteorological forecasts and reports made without authority of Bureau of Meteorology or CASA)

Neither the author nor the former FOI who has researched this has ever heard of any person or operator being charged under this CAR dealing with the “authority” of a weather forecast. A pilot has a weather forecast which indicates areas of rain, showers and low cloud. The overseas or long-distance domestic customer has pre-paid to visit the “world renowned” Great Barrier Reef. Using normal intelligence, the pilot or company telephones or radios people at the destination seeking their “opinion” of the local weather (how bad it is, what is the visibility like, is the weather set-in or passing and so on). Armed with this “local knowledge” and the forecast the pilot or operator makes a decision to “go and have a look”.

In the background of this process is the commercial awareness that it is a counter-productive process to fly international tourists to a location they will not enjoy because of bad weather. However, Obtaining that “local knowledge weather information” and acting on it is held to be illegal under CAR 120.

Note: in the case of a seaplane operation with tourists out of Cairns, the distances being flown are usually within 30 nautical miles, and the destination is quite commonly visible shortly after takeoff.

Comment: There is no immediate safety threat arising from the alleged practice. In fact, it could be expected to enhance the pilot’s situational awareness. If the pilot operates the aircraft with additional and extra information than that which is required by the law it hardly makes the action of the operator unsafe.

7.      Civil Aviation Regulation 133 (1) (d) (commencing flight without all required maintenance on the aircraft having been carried out)

If the Civil Aviation Safety Authority found the operator “commencing a flight without required maintenance being carried out,” it should have issued a Code ‘A’ ASR on the aircraft concerned grounding that aircraft until the required maintenance is carried out.

If the Civil Aviation Safety Authority believes the operator has a “habit” of commencing flights without required maintenance being carried out the operator should be prosecuted.

Comment: However if the aircraft has been grounded, the perceived risk no longer exists and there is now no immediate safety threat.

8.       Civil Aviation Regulation 172 (1) (flight under the visual flight rules below 2000 ft when unable to navigate by reference to the ground or water)

Two significant points are relevant.

  • First, this is an area of the regulations where it is almost impossible to prosecute due the inability to prove actual heights of cloud and visibility, and even then there would need to be a qualified witness next to the pilot. This is why the Civil Aviation Safety Authority endeavours to take administrative action rather than attempting to prosecute.
  • Secondly, like most other items in this paper, once the “rules” have been highlighted to the operator the operator will invariably desist.

Comment: In either case, there is no immediate safety threat and the responsibility of such operations rests with the pilot, not the operator.

9.       Civil Aviation regulation 233 (1) (b) (commencing a flight where aircraft exceeds gross weight limitations)

Two significant points are relevant:

CAR 233(1)

  • ·If the Civil Aviation Safety Authority was aware this was about to occur it should have stopped the flight at that point.
  • ·If it is not about to occur then there is not an immediate problem.

Once again this is an area of the regulations where is very difficult to prove in a court unless there was major overload as the record of actual passenger weights is not readily available, carry on baggage likewise, and the specific gravity of the fuel on board at the time would also need to be established.

Comment: If the Civil Aviation Safety Authority knows an overweight operation took place, then it is derelict in its duty if it has not prosecuted the operator. If it is acting on the basis of a suspicion as advised by an unchecked source, it is falling seriously short of its claimed commitments to natural justice.

10.    Civil Aviation Regulation 283 (making false statements on documents furnished in accordance with the regulations)

In a Court, an accused individual or entity has to prove a defence beyond a reasonable doubt. However in an Administrative Appeals Tribunal hearing, the accuser simply uses the word “safety” with sufficient frequency and emphasis to circumvent due process. Administrative action is thus a far easier instrument for the Civil Aviation Safety Authority to be seen to enforcing the regulations without its actions being exposed to public and political scrutiny.

Comment: If an accident is not about to occur there is no risk. There is therefore no immediate safety threat.

At the expiry of the 28 day period, CASA simply announced to the operator that it was suspending the AOC for a further 28 days to complete its investigation; and placed the same advice on its web site.

Defamation aspects

The publication by of accusations against operators had taken several forms before these events. These included:

  • Media briefings in which details are provided of the number and substance of past non-compliance notices issued against the operator and in some cases other verbal allegations, as in the cases of Ord Air Charter, Uzu Air and Whyalla Airlines. This information is also commonly conveyed to parliamentarians in support of administrative decisions;
  • Publication on CASA’s web site of

a)       A decision to suspend an operator’s AOC; and

b)       Unsubstantiated allegations under investigation in relation to a suspension.

The CASA public affairs office at the time advised that the action of publishing the allegations in support of its decision to suspend Aquaflight Airways AOC was endorsed by its Office of Legal Counsel, who had indicated that it was acceptable “on the basis that other regulators like the ACCC [Australian Consumer Protection Commission] do exactly the same thing.”

That advice was completely inaccurate.

In response to a formal request for media information the ACCC indicated as follows:

“We would normally not comment on an investigation until such time as it has been instituted in the courts, because we have to go through the courts. There is no parallel with CASA because they are responsible for issuing licences etc.

“We will occasionally comment on something that has been in the media, but rarely would we institute any publicity about an investigation on our own.

“From time to time some people will say they are being investigated by the ACCC or people will announce that they have reported somebody to the ACCC, then it’s in the public domain. We will sometimes confirm or deny that.”

Similar responses were elicited from the Australian Customs Service and the Australian Federal Police, the tenor of which was that the publication of unsubstantiated allegations against a person or corporation under investigation of those allegations was not to be contemplated before of the defamation laws and those agencies commitment to natural justice, due process, and procedural fairness.

Other regulatory systems:

Enquiries were also made of the Civil Aviation Authority of New Zealand and Transport Canada.

Transport Canada had recently revised its policy on the publication of the names of corporations violating its Aeronautics Act and the Canadian Aviation Regulations. However Transport Canada, which does not name individuals, says corporate offenders would only have their names published on its website along with a summary of the offence and resulting sanctions, in circumstances it sets out as:

  • after the company has paid a monetary penalty; or
  • has accepted the suspension of a document [such as an air operator certificate; or
  • following a final decision of the Civil Aviation Tribunal or a court; and
  • only after all appeals have been exhausted.

New Zealand’s Civil Aviation Authority said it had the authority to suspend certificates but that it would only publicise regulatory action against companies if its investigations were well advanced: “We would have to have justification that would have to stand up in court, and we know that. There are safeguards in New Zealand law that if we were to suspend or revoke a certificate and we don’t have the evidence, we will be in trouble in the courts; and if we are found to have made a mistake, we will be liable for substantial damages. That puts a certain discipline on us and we’re quite happy with that.”

Both Canada and New Zealand said they would not publish unproven allegations.

In the past, the former Civil Aviation Authority placed public notices at aerodromes inviting intending passengers to seek confirmation that an operator held a current AOC. More recently however, CASA had declined to answer inquiries as to whether an individual operator held a current AOC, on the basis of “commercial confidentiality,” and its current policy appeared to represent yet another policy switch, made without any explanation of changed circumstances.

These discrepancies were put to CASA’s General Counsel, Mr Peter Ilyk. Without commenting on the comparison between CASA and other Australian enforcement agencies, Mr. Ilyk replied that the US Federal Aviation Administration also published allegations against entities. A call to the FAA elicited the following points of insight into the FAA’s processes:

Phone call to Paul Takamoto, FAA public affairs, 22-Sep-00

  • An investigation will take place if is an incident is referred to an FAA inspector, or an inspector may have discovered it by themselves.
  • There is then a lengthy and carefully defined process that closely follows rules of due process, whereby evidence is gathered.
  • The inspector will make an initial recommendation for a fine if he feels that is warranted, and there are strict parameters by which the amounts of the proposed fines are set according to the nature and seriousness of the violations.
  • Then our legal people will weigh the evidence in terms of how strong the case is, and they may also readjust the initial proposed fine accordingly. It’s a lengthy process, but it’s only at the point where the agency determines the proposed fine, that it becomes public. The investigation is never announced publicly until the proposed fine is determined. The processes before that are internal.
  • The enforcement actions we take against organisations are then posted on our web site, where we publish proposed fines. The proposed fine is not published until the investigation has been concluded.
  • We do not have a situation where a certificate is suspended to allow an investigation to proceed.
  • Sometimes half of a fine is forgiven, as long as that party commits no further violations for a period of (say) a year.
  • The entity can appeal, generally before an administrative law judge. There are different avenues of appeal depending on the situation, but there is an appeal process and there may be hearings if that is warranted. Frequently there are appeals before an administrative law judge at the National Transportation Safety Board, which is a separate entity.
  • The purpose of publishing the proposed fine gives them their chance of due process, which has also already been observed during the investigation. The publication of the proposed fine gives the entity the opportunity to provide a formal response.
  • At that stage the evidence has been gathered and the investigation is complete.
  • We do not publish allegations which are still under investigation.
  • We will ground an operator if they are not conducting their operations safely. We did that with an airline called Pro-air. However there has to be strong evidence of systemic failure to comply with rules, and that evidence has to be assessed by our legal people as to whether it would stand up in a court of law.
  • We would not take steps like that on the basis of “reason to believe,” we would require absolute proof.

Conclusion

If the Civil Aviation Safety Authority became aware of any safety-related allegations against operators, scrutinised and evaluated them as to whether they would be sustainable in a court of law, and did not ground the aircraft concerned until the alleged errors were rectified; or did not have the matters rectified immediately, then the Civil Aviation Safety Authority must itself be guilty of negligence.

The question of whether the publication of unsubstantiated allegations constitutes a defamation never came before a court.

However the owner was charged in the Cairns District Court with the 10 alleged offences. He was found guilty on the dangerous goods charge and fined $600 for that offence, which is a minor technical one. Like most seaplane operators he made a practice of carrying a jerrican of two-stroke motor fuel in a locker in one of the aircraft’s floats in case a boat tending the aircraft ran out of fuel. The actual offence was was carrying the fuel without having a supplement in its Operations Manual to describe the dangerous goods precautions taken. The other nine charges were dismissed.

 

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