A skilfully mismanaged stuffup

“CASA will do all it can to ensure that a person whose licence, certificate or authority is suspended or cancelled has ready access to full external merits review in the AAT. Once before the AAT, CASA will conduct itself as a model litigant.” CASA, in a document entitled: A new approach to enforcement. March, 1989.

“Anyone other than Dick Smith who joins CASA, becomes ‘infallible'”– Dick Smith, August 1998.

“That’s the way the system works. They think: ‘We are powerful and we are totally unaccountable.'” – Dick Smith, August 1998.

When he made those comments, Dick Smith had already found the battle against authoritarian, intransigent and what he sometimes called ‘incompetent’ bureaucracy, tougher going than he had anticipated. But at that time events in the Torres Strait had already shown how much further there was to go. This incident was not the first in which CASA has used its administrative procedures to impose punitive financial burdens on an operator, while totally sidestepping the accountability Smith had fought for. The fatal crash of a Britten-Norman Islander in April 1996 had resulted in the immediate suspension of another AOC and forced that operator out of business. The operator had not been negligent, nor had any of its aircraft had any significant mechanical problems. The final Bureau of Air Safety Iinvestigation finding was not one that supported that outcome. I commented at that time: “Anyone contemplating investment or a career in aviation, should read this and study its implications. There’s still hope for the industry, but a lot of things have to be fixed first, and the industry is wondering whether the right people and motivations are in place to fix them.”

They have been wondering that ever since.

Most of the documentation of these events would never have surfaced, had the affected operator not dug its heels in and fought for their release. Uzu Air’s friends, as well as many of its commercial rivals, were united in their belief that these events represented an ongoing threat to the orderly conduct of aviation, and ultimately a negative impact on air safety. They also observed that CASA had developed a tactic to subvert the Administrative Appeals Tribunal (AAT) process, by cynically sheltering behind Section 9A of the Civil Aviation Act. That belief has been strengthened many times since the Uzu Air debacle.

A CASA public relations officer commented at the time when we queried the fairness of the process by which an administrative decision of one individual can put a company out of business: “Well, that’s the decision we have made. If (the victim) doesn’t like it, he can appeal to the AAT, can’t he?” When that comment went to press, another victim of this affair, the LAME licence of the chief engineer of Uzu’s engineering company, had been cancelled. That engineer, one of the best-respected in the industry, simply couldn’t afford the AAT process, especially when the AAT was disposed to accept a bald CASA statement that it was acting within its ‘safety responsibility.’

Jul 96 to Dec 98:      Uzu Air’s General Manager Bob Fulton wrote thirteen letters to CASA and its predecessors, seeking clarification of the anomalies surrounding the carriage of individual paying passengers at fixed fares on subsidised remote area mail service flights. None were answered, and a CASA officer later told Uzu: “Officially, they don’t exist.”

14 Aug 96:            A CASA safety systems assessment profile report on the company noted: “The company management has spent a considerable time trying to clarify the status of its Australia Post mail services, which appear to have been in non-compliance since the repeal of Civil Aviation Regulation 203. …… CASA must address the operation of vital rural mail services to remote communities and draft appropriate legislation to allow their continued operation. …..[the company] endeavour to conduct their operation in accordance with regulatory requirements. However, they feel frustrated by the lack of appropriate legislation and CASA’s reluctance or inability to allow regular passenger/mail services into non-surveyed landing strips or operation of single-engine IFR aircraft on such services.”

Nov 4-6 97:          A periodic inspection was conducted by FOI Neale Crawford from CASA’s Cairns District office. That officer’s report, subsequently obtained only at the direction of the AAT, crowed: “* 20 NCNs in total!” (underlining and exclamation marks as in the report.) The report added that: “This is no longer a complaint operator.”

Nov 17-20, 97:    Uzu was visited by an unannounced team headed by the Manager, Safety Audits, Southeast Region. The four-man team conducted a four-day audit over 52 man-hours, which resulted in the issue of four NCNs. Three of these detailed minor errors in maintenance documentation, and one questioned dangerous goods acceptance procedures. The report concluded: “Uzu Air are considered not to be an unsafe operator.”

1-4 Dec 97:          At the direction of CASA’s Canberra office, two investigators and one Cairns FOI conducted an investigation with the following terms of reference:

Determine the extent of operations in the Torres Strait region which are being conducted for fare paying passengers that fall into the definition of RPT and which are currently being conducted as charter.

The TOR directed that:

The differentiation between RPT and charter that is to be used for this investigation shall be drawn from the “draft” paper prepared by (a CASA lawyer) as attached.

The draft opinion, later obtained by Uzu, attempted to define the five elements which must exist to constitute RPT. However it provided no definitions of two of the critical elements: “Specific route” and “fixed terminal”

The investigators had thus been instructed to investigate whether operators were in breach not of a regulation, order or published ruling, but of a draft opinion, which failed to provide critical definitions.

Uzu’s position was based on its contention that CASA incorrectly interpreted CAR206 (1)(c), says Bob Fulton: “They had an interpretation for ‘fixed terminals’, ‘defined routes’ etc which was bullshit. Those terms are not defined in the CARs. Our interpretation was based upon the original ANRs.” [Air Navigation Regulations, the precursor of CARs.]

Dec 23 97:           A new FOI, whose training had not yet been completed, conducted a “risk observation report” inspection of Uzu. He commented: “Aviation manager [Fulton] appeared to be consistently involved to the point of apparent interference with duties of operational staff – pilots and CP [chief pilot]!.” The report, the contents of which were never conveyed to the company, ended: “CASA should support the new CP to raise standards and resist (the manager’s) commercial pressures.”

Jan 7 99:              CASA issued a notification of proposed action to suspend or cancel the AOCs of four operators including Uzu. The notification summarised the reasons CASA believed the companies were undertaking unauthorised RPT flights, contrary to the Civil Aviation Act and regulations.

Uzu’s notification also resurrected a number of NCNs issued over the previous two years, all of which had previously been acquitted.

Jan 16 99:            Uzu Air’s Britten Norman Islander was involved in a fatal accident at Coconut Island.

Jan 17 99:            An “Immediate safety report” signed by CASA Assistant Director Laurie Foley on the advice of a Cairns FOI who had not visited the site or communicated with the operator, outlined the few known circumstances of the accident, and stated under recommended action: “DFOM (District Flying Operations Manager) to now recommend 28 day suspension of AOC.” The report, faxed to Canberra at 10.55 am, on that day (a Sunday), did not state any reason for the recommendation.

Jan 19 99:            BASI, insurer and operator representatives flew to the accident site. In a faxed message, CASA suspended Uzu Air’s AOC for 28 days, with effect from 2359 that night.

Jan 20 99:            Uzu filed a notice of application for review of the CASA decision to suspend its AOC, claiming that the Authority had acted ultra vires (outside its legislated authority); breached rules of procedural fairness and natural justice; failed to provide adequate reasons for the decision; misapplied administrative principles, and “failed to correctly interpret and apply the law.”

Jan 21 99:            Uzu lodged a detailed 127-page response to CASA’s notice to show cause. The response was never acknowledged. At the same time, the operator attended the first hearing on the matter in the AAT seeking a stay of its AOC suspension. CASA succeeded in having the stay denied. CASA’s use in such stay proceedings of Section 9 of the Civil Aviation Act, appeared to question the ability of any operator to gain a stay. The operator believed the AAT’s effectiveness in reviewing administrative processes may be neutered by this tactic. Uzu would have to wait for the 28 day suspension to expire, before being able to proceed to a substantive hearing. Uzu sought an order for the release of CASA documents related to its decision. CASA said it would take up to 30 days to produce the documents. AAT directed CASA to provide Uzu with all relevant documentation within seven days. (The documents were made available about 10 days later. The 13 letters seeking clarification of RPT/charter status were not included in the documents.)

Jan 22 99:            BASI investigators recovered the engines from the Islander and returned to Cairns. BASI held a meeting at CASA Cairns with CASA AWI. BASI advised CASA the left engine did not appear to be developing power at impact and the fuel mixture control rod was found to be broken at the accident site, but advised the component would require metallurgical examination to determine cause and time of breakage.

Jan 26 99:            Uzu Air lodged a 40-page response to CASA’s proposed AOC suspension.

Jan 27 99:            BASI advised Uzu and CASA that laboratory analysis verified the fuel mixture control rod failed “…due to overload as a result on impact forces.”

Feb 2 99:              BASI stripped down the left engine at Archerfield. On the following day, BASI advised all interested parties of the outcome of the engine strip down.

Feb 4 99:              CASA served a Notice to Show Cause on Uzu Air’s associated company, Tamco Engineering, asserting that BASI investigations “resulted in a finding of a disconnected mixture control rod on the left engine, which was not delivering power prior to time of aircraft impact, and was considered by these BASI Investigators to be a contributing factor to the loss of control of the aircraft prior to that impact. The subject mixture control was found to have suffered failure which exhibited severe corrosion of the mixture control ball end connection.”

The BASI Investigator verbally denied the assertions were ever made and advised Uzu that BASI was lodging a protest with CASA regarding the allegations.

Feb 8 99:              Uzu Air held an informal conference in Cairns with the CASA regional manager, the acting DFOM, and the assigned FOI. Uzu made a proposal that it implement check and training and Class A aircraft maintenance, immediately upon reinstatement of the AOC. The company believed this met with CASA approval.

Feb 12 99:            BASI Deputy Director Alan Stray faxed BASI’s Preliminary Report to Uzu Air. The preliminary report was also faxed to General Manager, Aviation Safety Branch, CASA, Canberra; and CASA Canberra was telephoned to confirm CASA’s receipt of the report. The report stated inter alia: “Examination of the left engine, while still in the wreckage at the accident site, revealed the linkage between the mixture control cable on the carburettor had failed. Subsequent metallurgical examination of these components confirmed that failure was due to overload as a result of impact forces, and that it had not contributed to the accident.” (our emphasis)

Feb 15 99:            CASA suspended Uzu Air’s AOC for a further 28 days and asserted inter alia: “The Bureau of Air Safety Investigation (BASI) has been investigating the crash but has not published a preliminary or final report on its causes.”

Feb 17 99:            The Cairns Post newspaper published an article headed “Crash report rocks CASA,” (by this writer) detailing the contrasts between CASA’s allegations and those of the preliminary BASI report. A faxed letter was received on the same morning from Laurie Foley, saying: “I have now been made aware of the content of a preliminary report of the accident by BASI. Please note that neither the crash itself, nor the possible causes of the crash, were a decisive consideration in my decision to suspend your AOC. I would have suspended your AOC even if I had been aware of the content of the BASI preliminary report.” Assistant Director Foley did not reveal his reasons for this damning assertion.

Feb 18 99:            An AAT-directed teleconference was scheduled for 1700, between Uzu counsel, the AAT registrar, and CASA’s office of legal counsel, to determine the process of an AAT hearing on the second suspension, and to enable Uzu’s counsel to advise CASA of the witnesses Uzu required to examine. Uzu counsel and the AAT were connected. CASA’s phone rang out without answering.

Feb 19 99:            Uzu counsel telephoned CASA Office of Legal Counsel, who advised they had forgotten the teleconference set for the previous day. CASA advised the further “T” documents (documents which CASA relied on to make its decision to suspend the AOC further and which Uzu required under the AAT court order) would now be made available to Uzu. Uzu’s counsel advised that he had the AAT booked in Sydney for Wednesday Feb 24. CASA advised they would be unavailable on that day but Thursday Feb 25 would be acceptable.

On the same day Uzu Air provided CASA with a detailed 50-page response to the proposed further 28 day suspension of its AOC, detailing the foregoing events and again raising the question of RPT versus charter.

Feb 23 99         Uzu’s lawyers requested the AAT issue three subpoenas to involved CASA staff members:

  • Assistant Director of Aviation Safety Compliance Laurie Foley;
  • District Flying Operations Manager Robert Collins, and;
  • The case FOI Neale Crawford

to be present at the hearing. AAT declined due to inadequate time. “We later learned that CASA did not want them questioned under oath,” said Bob Fulton. The Deputy Commissioner of the AAT gave CASA until 5.30 pm to agree to return the AOC or she would list a substantive hearing on the following Monday and issue writs for the witnesses.

“CASA agreed to return the AOC but included a string of ludicrous conditions including that our Cessna 206 be maintained under an approved Class A system of maintenance, which was absurd and in fact, illegal.”

Feb 25 99             At a cost of about $6,000, Uzu attends AAT Sydney at 0915. At 0930, AAT Vice President’s associates advised that CASA would not be attending due to commitments in Brisbane, but CASA would not object to a telephone hearing. However CASA objected to any evidence being tendered or any witnesses being called, as it is ‘not practical to cross examine by telephone.’ Uzu, which had now not earned any revenue for 36 days, was therefore again denied an opportunity to confront its accusers, some of whom were on “stress leave,” a luxury unavailable to Uzu General Manager Bob Fulton or his staff, some of whom had been stood down. CASA however successfully objected to the lifting of the suspension on the grounds of “Air Safety,” relying on Section 9 of the Civil Aviation Act.

Mar 2 99:              A meeting in Canberra was attended by Uzu’s chief pilot, an Uzu consultant, a CASA lawyer, and CASA’s public affairs manager. Uzu was told that CASA wouldn’t extend the suspension, but would either lift it, or let it run its course until March 16. The company was also told that CASA would not renew the suspension or cancel the AOC. No explanation was offered as to why, having made that decision, CASA would not lift the suspension immediately.

It was agreed that draft checking and training and maintenance procedures were required and had been submitted, and that checking and training and progressive maintenance would be progressively incorporated.

Mar 5 99:              An AAT teleconference between CASA office of legal counsel and Uzu confirmed all required documents had been submitted and that the AOC would not be cancelled, no further suspension would be imposed, and the suspension would be lifted between March 10 and 12.

Mar 8 99:              CASA acting DFOM Cairns advised he was satisfied with the draft manuals and would be making “unspecified recommendations” to CASA Canberra. Uzu’s optimism was heightened.

Mar 9 99:              CASA published an amended CAO 82.3 and three blanket exemptions, authorising air charter operators in the Torres Straits to operate RPT until June 9 without meeting the aerodrome, maintenance, or training and checking requirements for RPT.

The principal expertise of the three CASA officers preparing the new rules lay in the respective areas of airworthiness, legal and navigation. Uzu was again told its AOC would be restored by the end of that week.

Mar 10 99:            AM – CASA shifted the goalposts again. While its competitors, who had been operating for the two months Uzu has been grounded, were still in the air and had 90 days to comply with RPT rules, Uzu was told it must comply BEFORE its AOC was restored.

PM -Uzu’s solicitor contacted CASA office of legal counsel and was told the manuals the company had submitted were only DRAFT and that Uzu had not nominated a maintenance controller or check and training captain.

This writer faxed a draft of this chronology to CASA with an invitation to review it for accuracy.

Mar 11 99:            CASA phoned and indicated that a response, detailing some “errors and omissions” would be faxed “tomorrow.” I admitted that because of space limitations I had omitted considerable material, much of it damaging to CASA. (Information provided in CASA’s response is incorporated in this narrative.)

Mar 12 99:            The CASA response did not arrive. Or maybe, obliquely, it did. A faxed message from CASA to Uzu suspended the AOC for a third period, “pending an investigation by CASA into your company’s operations, and the risk to the safety of air navigation in allowing the AOC to continue in force……… The reasons for this decision and the facts and circumstances on which I rely are set out below.” The letter detailed thirty-eight points as “facts and circumstances,”

Mar 15 99:            A fax to the Hon. Warren Entsch, Member for Leichhardt, in response to a phone call to CASA from Mr. Entsch, said that for Uzu to have its AOC reinstated, it must comply with three requirements – training and checking, Class A maintenance, and an approved maintenance controller, which Uzu had already addressed.

In a pre-hearing teleconference between Uzu, CASA and the AAT, the Tribunal indicated that it expected CASA to restore the AOC by close of business on Friday March 26, provided the three CASA conditions were met (which Uzu insisted they already had been.) The AAT official indicated that she would be in her office for a further half hour after close of business, and that if the AOC was not restored by that time she would arrange a “substantive” hearing on Monday 29.

In anticipation of a full AAT hearing of the case, Uzu had already requested the AAT to issue subpoenas requiring the presence at the hearing of Assistant Director of Aviation Safety Compliance Laurie Foley, Cairns District Flying Operations Manager Robert Collins, and the case FOI Neale Crawford to be present at the hearing. This meant they would almost certainly be called upon to give evidence, and to face cross-examination regarding what Uzu had already alleged to be inconsistent and discriminatory conduct.

Late on Friday afternoon, CASA blinked. In a faxed message, Uzu was advised that its charter AOC was restored “subject to the company implementing Class A maintenance” – a unique requirement, but at least the company was back in business. The implementation of Class A maintenance also included the company’s Cessna 206, contrary to the regulations regarding maintenance of single engine aircraft, however the company complied.

In recognition of the need for scheduled air services in remote areas of Australia, CASA implemented a low capacity AOC to regulate scheduled air services into air strips which did not meet the regulatory requirements for normal scheduled air services. CASA stationed FOI Rod Bencke on Horn Island, who recognised the need for these essential services. Working with Rod, Uzu Air rapidly qualified for the issue of a low capacity RPT AOC enabling conduct of scheduled air services to the islands of the Torres Strait.

But Uzu Air, which was subsequently sold to a new owner and renamed, did not survive the financial stresses of being grounded for sixty six days at a cost in excess of $300,000 imposed upon it. Despite having undergone considerable restructure and the acquisition of new equipment, the airline had simply gone into receivership.

General aviation is not one big, happy family; but other operators watched the process with keen interest, and even Uzu’s commercial rivals were horrified at its implications for the rest of the industry.

Bob Fulton reflects on the final outcome of this adventure: “Mick Toller came to Horn Island and we flew him to Mabuiag Island where he flew the C208 Caravan under the supervision of one of our approved training captains, and during the course of my discussions with him he admitted: ‘It could have been handled differently.’”

After thirty successful years in the aviation and airline industry in PNG, the Pacific, Asia and Australia, following the demise of Uzu Air Bob Fulton quit the industry disappointed and disillusioned and now manages an apprentice training company in rural Queensland.

ProAviation invites the Civil Aviation Safety Authority to state how its misconduct as recounted here and amply documented, contributed in any way to air safety in Australia. Mr McCormick’s often-repeated statement that he wasn’t in Australia when all this was going on needs to be measured against what he has done to remedy the multiple problems since his ascension to the throne in March 2009.

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About Paul Phelan

Paul Phelan flew for over 50 years in private, charter, corporate and regional aviation, worked in senior management roles with a major regional airline, and retains his license. In parallel he has been writing for Australian and international aviation journals for well over 20 years on all aspects of aviation including aircraft evaluation, flying, industry affairs, infrastructure, manufacture, regulatory affairs, safety, technologies and training. He has won three separate National Aviation Press Club awards for "best technical aviation story of the year."

One thought on “A skilfully mismanaged stuffup

  1. name withheld

    The issues here Paul, are the same as is faced currently by Barrier Aviation in Cairns. It faced Whyalla Air [where the truth of the ATSB report did not support what actually happened, but by that stage CASA had acted and the Company was finished] and unless the House of Reps does not get on with, there will be further “blood on the floor”.

    The real issue is that CASA does not deal with people on an equitable basis and as a result, people are tried on the basis of evidence that is not properly obtained, not properly tested [often CASA refuses to provide the evidence that they rely on, not observing subpoenas or orders from the AAT or Federal Court]

    CASA must go as it is perpetuating an unfair system, using out-of-date regulations, which are circuitous and unable to be met by even the most careful operator.

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