Glen Buckley and Australian small business -V- CASA

[glenb]

Part 2 Of 3 Hansard

APTA was very well intentioned. It was a very big investment and ultimately it has cost me my house investment savings. Mr Carmody will get up later on and he will say CASA has to assure themselves of good governance. Well, I will say to you, Mr Carmody, that APTA was the first organisation in Australia, not just in flying schools, to give CASA full 24/7 access to every single aspect of the business. The staff training, the students' files, the flight duty, predictive maintenance, communications between the staff—they had access to the whole system. The system was designed with a management structure of schools that do 10 times the volume of flying. It was a registered training organisation subjected to frequent audits. It was a very, very high calibre organisation and a big investment with industry-leading personnel. What did CASA do to me?

Before I start this, I want to talk very briefly about gentleman called Bruce Rhoades. I'm not sure if you're familiar with him. Bruce Rhoades was a gentleman whose company was involved in an aviation accident. He fought diligently to protect his name and his reputation, as I am, but unfortunately he acquired cancer. He went to his grave before he had the chance to clear his name. I apologise to his family, if this brings them any discomfort, because I haven't had the opportunity to seek their approval to tell you this story. But the ABC, 7.30, did an investigation into the conduct of the CASA personnel. He went to his grave not being able to defend himself. I don't know about the decisions he made in the aeroplane on the day. I wasn't there. It's not up to me to judge. You fly yourself, Senator McDonald—constant decision-making. So I can't judge his decisions. To me, they seem to be decisions that are possibly somewhat similar to those I would have made.

What I can assure you, for Bruce Rhoades, who has now passed away, and for his family, is that in his case CASA reverse-engineered the process. They did it to me. They work out what they want and they work backwards. He was breached under administrative law and denied natural justice and procedural fairness. He wasn't given those things. He went to his grave with his reputation in tatters, and I'm not letting it happen to me.

What did CASA do to me? Okay. To simplify this story—we don't have a lot of time, I appreciate that—CASA did three things to me. The first stage they did overnight. For no reason at all, they changed their opinion, came in and placed my entire business on seven days notice of operations. That's classified as a cancellation, variation or a suspension of an air operator's certificate. There are very strict procedures and protocols they need to follow to take such substantive action. Bear in mind this is not on safety grounds; it is the complete reverse. They denied me my privilege under administrative law and they put restrictions on my ability to trade.

For a staggering eight months, I couldn't take revenue. We've just been through this with coronavirus; we know what it does to businesses. No-one was going to join a school that only had seven days certainty of operation in the future. Consider what that does to staff, what that does to employees, what that does to customers and what that does to suppliers. My parents stepped in so I could avoid redundancies with those restrictions placed on my ability to trade. My parents stepped in for eight months and funded the staff salaries to the tune of $300,000 so that I didn't have to make anybody redundant. At the end of the eight months, exhausted of funds and too embarrassed to go back to my parents, I sold that business for five per cent of what it was worth. That was stage 1.

In the second stage, I retained my existing flying school, called Melbourne Flight Training. CASA—this is a right they don't have; this was again their opinion; this isn't defined—came up with something called direct operational control and they required me to transfer my flying school, my staff, students, resources and financial control over to the new owners of APTA that I'd sold the business to. There's no basis for this in administrative law. That left me with debts and leases on photocopying equipment et cetera, with no revenue.

In the third stage, I obtained employment in the industry and continued to defend my reputation on PPRuNe and Aunty Pru, until CASA sent a letter to my employer, saying my position was untenable, based on comments that I was making publicly. I was terminated that day. I spent eight months unemployed, dealing with a very depressed state, and have recently returned to the workforce—outside of the aviation industry. Are there any questions at this stage? Are you happy for me to continue?

CHAIR: Keep going. There will be questions at the end.

Mr Buckley: Thank you very much. I will keep going. I'm going to read from a written statement here. I want to briefly go to the impact on me of CASA's actions, just so that is very clear. I've lost my home. I've lost my business. I've lost my job. I've lost my reputation. My parents have lost $300,000, supporting staff salaries. My daughter's education at a remote university has been impacted. My son is doing his VCE, and I'm unable to pay his school fees. The school has had me declared bankrupt, and that will be activated in February. I have no money. I have been left absolutely, completely destitute and, at 56 years of age, have no hope of ever rebuilding my life once I have been declared bankrupt. I have nothing left.

Whilst I'm no lawyer, I have done extensive research over the last two years that this has been going on into the definitions of 'misfeasance in public office' and 'negligent misstatement'. I've had the opportunity to discuss this matter with several legal firms to ensure my understanding is correct. First, on the subject of misfeasance in public office, Justice Deane in the High Court determined that misfeasance in public office requires an intentional but 'invalid or unauthorised act' to be committed 'by a public officer in the purported discharge' of their public duties which causes loss to a person. It requires that the person committing the act did so deliberately. I'm going to come back to that; that's going to become very important for some allegations I'm shortly to make.

Second, on the subject of negligent misstatement, negligent misstatement is information that is provided but is inaccurate or misleading. It requires that a legal duty must be recognised and requires a certain standard of conduct to protect against foreseeable risk; that there must be a breach of that duty by failing to meet the requisite standard of care owed; and that the party receiving that advice has suffered material injury as a result of that breach. It requires that the 'speaker' of the information, CASA, realise that they are being trusted and that it is reasonable for the party receiving the information to act upon the information or advice.

So I, in this forum, am lodging a formal allegation of misfeasance against Mr Shane Carmody, the CEO of CASA. I'm also lodging to both of you senators a formal allegation of misfeasance against Mr Jonathan Aleck, the Executive Manager, Legal, International and Regulatory Affairs, and finally an allegation of misfeasance against Mr Graeme Crawford, the executive manager of the aviation group. My options? I've been out to industry. Industry crowdfunded me $50,000 over a short time. If I have to go out to industry and seek crowdfunding to hold these people to account, I will do it. However, Senator Susan McDonald and Senator Glenn Sterle, I have raised those serious allegations against these people. It should not be necessary for me to go out and get equity funding from industry, but I will do so if required.

I'm going to give you about 10 topics. I realise we don't have lot of time so, rather than go over all the topics, I'm going to give you both a choice of 10 topics. Hit me with one of them and I'll briefly tell you that story. The topics that I could have a chat to you about are the restrictions on the business's ability to trade, the administrative freeze, the limited dates of operation, the contracts issue, the CASA direction to terminate my employment, CASA's use of the aviation rules, the falsified audit results, the temporary locations procedure or my allegations that they have misled the Ombudsman's office. I'll give you those topics again, just for you to jot them down. You can hit me with any of those topics and I will talk to them. I want this to be a positive experience, so I do want to leave 10 minutes at the end of it to give you well-intentioned suggestions as to how I genuinely believe CASA could be improved. You could talk to me about the restrictions on the business's ability to trade, the administrative freeze placed on the business, the contracts issue, CASA's direction to terminate my employment, CASA's use of the aviation ruling, my claim about falsified audit results, my temporary locations procedure or my allegations that members of the CASA senior executive have misled the Commonwealth Ombudsman's office. Over to you two.

CHAIR: Mr Buckley, thank you for appearing. I appreciate that it will be a very emotional presentation for you, given the impact this has had on you personally and on your children and parents. When we had budget estimates a couple of weeks ago, I was broadly aware of your issue from industry reports. I asked questions of Mr Carmody and his response was not fulsome. I want you to respond to that, because I'm trying to understand. I asked a question of him. He gave me a very narrow answer. Can you comment on what your views are on that?

Mr Buckley: On this matter, I don't want to say that he was untruthful; I want to say that he was deliberately misleading. You asked him if there had been any settlement on my matters and he focused very much on the settlement issue. I have a number of claims against CASA. There are two claims that I have against CASA that I'm going to call part A and part B. Part A of the claim, which I want addressed first, is the claim about everybody outside of my family who's been affected: the staff who have lost their jobs, the businesses that have closed down, the suppliers that have remained unpaid. That's part A of my claim. There's another part of the claim, against the conduct of CASA—breaches of administrative law, natural justice and procedural fairness. Mr Carmody was fully aware of that. The only offer that CASA has made to me—to be honest, I don't recall the amount, because I found it so offensive that I opened the email only once. It was a lot less than $5,000. My recollection is that they offered me a total of about $3,500, somewhere in that vicinity.

CHAIR: I want to ask you about the initial issue, which was that you were establishing—I think you described it as an IGA approach to flight training schools. It has been suggested to me that the issue that was raised was that flight training schools shouldn't be able to use an established SAP and the manuals that you had developed with CASA could be used for one business, but it wouldn't be appropriate to use them for multiple businesses. Is that your understanding? Have I got that right?

Mr Buckley: That would be an argument that perhaps CASA or somebody would potentially put forward. I'd like, very much, the opportunity to refute that. You've got to bear in mind, APTA was designed with CASA over two years with 10 CASA personnel; I attended to over 600 CASA requirements throughout that. I've been contacted by an ex-CASA employee today to say that they'll support this contention. They worked side-by-side with me. We had the most advanced IT system—it was an Australian designed product, as I insisted—and we built a very, very high powered overview system. My staff would each base themselves in the base to make sure the induction was thorough. We had regular meetings, regular audits. CASA does an audit on us once every couple of years. We've audited our own organisation on hundreds of occasions over the two years. We had a very large safety department, the largest safety department of any organisation in Australia. So, no—there was one certificate, one set of procedures. The whole thing was designed to be scalable, with input from ex-military personnel, and the structure was that it could grow and reduce in size as was required.

CHAIR: So, putting aside whether or not that was the case, you were given seven days to stop operations?

Mr Buckley: I'll just stop you there, Senator McDonald. Interestingly enough, the letter originally—I have the letter here—was just a request for documents and it led me to believe that it was most likely that, in seven days, they were going to shut me down. I was issued interim approvals to continue operating throughout the eight-month period, until the business couldn't continue any longer.

CHAIR: So the letter asked for a production of documents, but it didn't require that you stop?

Mr Buckley: Correct. They did let the business go on, but I guess my point is you can't run a business—any business, whether it's BP, ANZ bank, a flying school or, in particular, an education facility—where you've only got seven days certainty of operation. You can't enrol people in courses.

CHAIR: Alright. One of the issues that have been raised by other people who have provided submissions is the consistency in decision-making by CASA officials within and across CASA. Would this be a reflection of that lack of consistency, or am I swimming outside the lanes to suggest that?

Mr Buckley: I can assure the viewers that is not a Dorothy Dix question, but it's probably one of the most beautiful questions you could ask me, Senator Susan McDonald! So CASA are operating what they call certificate management teams. These are small, roving groups of CASA personnel consisting of experts on flight training, safety, aircraft maintenance. I operated under a team called CMT2 for a decade, under the leadership of a gentleman called John Costa—I say his name now, because he has retired and he has left CASA—an exceptional person and a very good team, and they worked with me to design APTA. Then, without warning, I received notification from CASA that I was to have a change of oversighting team, from CMT2 to a team called CMT3. Now, these two teams don't sit across the country from each other; they sit opposite each other at the same desk. As I said, I have the emails. Within 24 hours of being notified of the change from CMT2 to CMT3, I wrote to the CASA regional manager and I requested a one-on-one on-the-record meeting because the new team included a flight operations inspector, Mr Brad Lacy, who has a very bad reputation as being somewhat vindictive and vexatious in the Victoria-Tasmania region.

CHAIR: Mr Buckley, I am very keen to hear your story, but I'm not a legal expert and I don't want you to wade into anything that's going to get you into difficulties. I suggest we leave individual names out of it.

Mr Buckley: Okay. I had a change of oversighting personnel. I went from one team to another team. I requested a meeting with the CASA regional manager, where I said, 'I don't want this individual oversighting my business because I think that that would bring harm to me and my business.' CASA ignored that request. There was the change of CMT to CMT3, and, sure enough, that very individual initiated the action against me. Interesting.

CHAIR: Thank you, Mr Buckley.

Senator STERLE:Good to see you again, Mr Buckley. On what basis did they give you seven days notice that they were winding up your business or not going to allow you to operate?

Mr Buckley: To simplify the matter, they used a document called the aviation ruling, which is a document designed for the charter industry, not for flight training. That's one of the topics I could talk to in detail. The Commonwealth Ombudsman has completed phase 1 of his investigation and he found that CASA had erred because they used the wrong document. Then they came back to me and said, 'Well, you have to have contracts.' I said, 'I have contracts.' They said, 'No, you don't.' I said, 'Yes, I do have contracts and they've been provided to you previously.' They said, 'No, you haven't.' I provided evidence, and even Mr Graeme Crawford had been provided with a copy of the contract. There were just a lot of CASA errors. Initially there was the aviation ruling, which the Ombudsman and I advised CASA at the start was completely the wrong document. Then it became an issue about the contracts. CASA has never asked any other operator to have a contract. I asked CASA, 'Do you hold contracts for any other operators?' They don't hold any other contracts. That was a unique requirement put onto my organisation, but I'd already pre-empted it because I had contracts and they had been provided to CASA. All of a sudden CASA ended up with mud on their face.

Here's another one. I asked CASA, 'When a new member comes on board, how do I induct these new flying schools into the organisation?' CASA advised me to use a procedure called the temporary locations procedure, which I adopted. According to my manuals, CASA approved that and CASA approved bases under it, CASA audited it and CASA commended me on it. Then, when I got the initial notification, they told me that the temporary locations procedure wasn't the approved procedure. 'You recommended it to me. I put it into my manuals on your recommendation and then you audited it. You've approved bases under it.' The point is that that's my claim. I was a big critic of CASA before this regulatory program came in. Dr Jon—I'll keep away from naming names but—

Senator STERLE:No—I think the chair will support me here. Dr Aleck will be there and we can ask him questions, so you can name him. The chair won't mind, because that's on the record.

Mr Buckley: CASA's regulatory program, as you are probably aware, is a decade behind schedule and hundreds of millions of dollars over budget. Before it was introduced, I argued with CASA at every conference and at every opportunity: 'Don't bring this in. It will decimate the Australian owned sector of the industry. It will decimate flying schools in country areas.' What happened? Obviously, it came in and it's had a devastating effect on the industry. Dr Aleck is the man responsible for this program. He is Executive Manager of Legal, International and Regulatory Affairs for CASA. He has been there for many, many years and many people have raised allegations against him, as I said.

Senator STERLE:You sat with CASA; they helped you to design it and they said, 'Here is the box to work in,' and you worked within the box. I understand that you had financial support from your parents. You said it was because you didn't have redundancies. Was there a legal avenue? Was there a dispute settlement procedure? Was there somewhere for you to say, 'Hang on CASA, I have the right to put forth my case'? Was none of that going on?

Mr Buckley: No. I ask that Mr Carmody or Dr Jonathan Aleck be asked to put forward their case in plain English with good intent to try to provide an overview of the reason for their actions.

Senator STERLE:Okay, we'll do that. But let me ask you this, then: did you seek legal advice?

Mr Buckley: The industry did a crowdfunding page for me on what I should do, and that's why I'm fully satisfied that I have a claim of misfeasance against those individuals.

Senator STERLE:Sorry, Mr Buckley. I'm asking: did you have to go and actually engage—ugh, this gives me the creeps—a lawyer to throw good money after bad? Did that happen?

Mr Buckley: No.