Glen Buckley and Australian small business -V- CASA

[glenb]

PART ONE_Final copy of correspondence sent to Ombudsman today

10th February 2021.



APTA Submission to Ombudsman- Correspondence 2 of 4 submissions.



Dear Mark, Complaint Resolution Officer at the Commonwealth Ombudsman Office,

I am writing to clear up some misunderstandings that appear to have developed in the investigation to date, and to accept your offer of a telephone call with your office. I anticipate that could require up to 90 minutes, so respectfully request that you forward me some options that would be most practical for you, and I will make one of those options work. I would like the opportunity to clarify any matters raised in this correspondence.

Until these potential misunderstandings can be clarified, may I call on the Ombudsman’s Office to suspend the investigation, as any immediate determination would be made on information that is not correct. I appreciate that the technical nature of this issue may result in delays as your office seeks the information that it requires and respect that you may need to draw on expert independent opinion.

I am fully satisfied that information has been provided to your office by CASAs Executive Management, with the intention of “engineering” CASAs desired outcome. It is imperative that I put these matters clearly on the record, and let your Office decide on which party is acting with integrity and working with sincerity towards a transparent process, and a fair outcome.



For clarity, I am fully satisfied that CASA has misled the Ombudsman’s Office.

To obtain a fair outcome, I believe it is essential that the Ombudsman’s Office, clarifies quite clearly that CASA had fully sanctioned and approved more than one entity to operate under an AOC in the flight training sector immediately prior to placing restrictions on my business, and that had always been the case.

APTA was in fact the first time that a system had been designed, over a two-year period, with 10 CASA personnel, and approved by CASA and audited by CASA, and in fact recommended to flying schools by CASA, that took a CASA accepted system and invested heavily to significantly improve it. i.e., with higher levels of operational control, a large and well-resourced safety department, high levels of internal auditing, frequent well documented Group meetings, dedicated Head Office, timely communications, standardised procedures, advanced IT systems, increased safety, a large team of highly qualified management drawn from the Airforce, Airlines and ex CASA personnel and compliance etc.



All to a demonstrably higher standard than was accepted practice in the industry, until that time. The intention is to set an industry-leading benchmark standard and pursue business opportunities in regional areas with an industry-leading group capability amongst the Australian owned sector of the industry. It was a big vision, highly dependent on CASA being well-intentioned and professional, and indeed acting lawfully.


All of this was delivered under the single CASA issued Authorisation/Air Operator Certificate, and as the Authorisation Holder, I was fully responsible and accountable for all operations under that AOC including all pilots that delivered flight training under my AOC, irrespective of which base they worked at, or if they were paid by me, or someone else. That factor was irrelevant as far as maintaining operational control.



Even if an instructor wanted to teach on a voluntary basis to teach Scouts or for his own pleasure, If he or she did it under my AOC, I was responsible, and that pilot operated in accordance with our Exposition (operations manuals) Where the income for the pilot is derived from is irrelevant. I am responsible for the operation delivered under my AOC, by every pilot, on every occasion.

For clarity going forward, there are three separate and distinct issues.

1. CASA closing down APTA without any prior notice by placing restrictions on its ability to trade that deprived it of revenue, and that the CASA personnel involved would have been fully aware that those restrictions would lead to the business's closure.

2. The direction that I had to transfer my remaining flying school, Melbourne Flight Training, to the new owners of APTA, in what CASA called “direct operational control”. Something never previously applied to a flying school before, and with no basis in law.

3. The direction that the CASA Region Manager directed my Employer that my continuing employment was “not tenable.”

I have finalised my correspondence with you on the matter of point 3, so this correspondence relates to Point 1 only, and I will write to you on Point 2 within the next 10 days.

There will be a fourth and final submission approximately 10 days after that, and it will outline the impact of the CASA action on my family, suppliers, staff, customers etc. I feel that it is important to have an appreciation of this impact, in determining whether CASA's action was reasonable in the circumstances. As you are aware throughout the 8-month period before I lost my business, I did write to CASA on multiple occasions and clearly identified the commercial impact of their actions. They were known to CASA personnel, and they would have been fully aware of the commercial impact at the time of making their decisions, and in fact, this knowledge would have formed part of their decision making. Therefore, I feel it is pertinent to any allegation of misconduct if I were to make one, that known and foreseeable consequences are considered in determining if CASAs actions and decisions were reasonable in the circumstances.

I would like the opportunity to draw your attention to the following considerations in arriving at your final report:

Prior to presenting the considerations, I do want to clarify the following:.

CASA did make a determination that the CASA business model was illegal. CASA did contact all of my customers, CASA advised we were operating illegally,and CASA did force each of those existing Members to leave APTA. They were given no option. By CASA forcing all customers to leave APTA, that obviously led to the failure of the business



The basis for CASA forcing all members to exit APTA, including my own business, was that the structure was unlawful, and that was the reason for CASAs decision to apply restrictions on the business's ability to trade.



Twelve months after CASA had finalized all customers leaving APTA the Ombudsman report was released and quite clearly found that the structure was not illegal. On this matter, I refer you to Consideration One. Despite all of my other concerns raised by the process, the fundamental point is that CASA did close down the business, and had no lawful basis to do so.



Now that the Ombudsman’s report has been released and found, “no Australian legislation prohibited franchising of an AOC subject only to the exclusivity of the AOC Holders operational control,” CASAs entire basis for their action is unlawful”.



In the second part of his finding he goes on to state; “subject only to the exclusivity of the AOC Holders operational control.



It would be likely that CASA would now retrospectively change their argument to one of “operational control”. I welcome the opportunity to demonstrate how APTA provided industry leading levels of operational control, that was known to CASA.



In rough figures the APTA concept required approximately $1,000,000 to operate per annum, to maintain or exceed the CASA requirements for suitable operational control. The Business model was built on ten members sharing equally in the operating costs of the structure. As CASA forced each customer to depart, that left me subsidising the cost of delivery of APTA, which became unviable with no customers. CASAs restrictions made it impossible to trade, leading to the forced sale of the business at 5% of its agreed value, after I was unable to meet upcoming salaries.

After 8 months and CASA having still not finalised the matter, and with all customers forced to leave APTA and a surety of operations that was soon to expire, the business was in an impossible situation. If the Ombudsman has not seen this documentation, I would call on the Ombudsman’s Office to ask CASA for the initial correspondence that was sent to all customers of APTA. This was sent very early in the process, and prior to me having any opportunity to defend APTAs position.


CONSIDERATION ONE- THE DECISIONS OF CASA PERSONNEL WERE UNLAWFUL AND HAD NO BASIS IN LAW.

Before I proceed I must clarify one point to ensure there is no misunderstanding on my behalf. In Phase One of the investigation, The Assistant Director of Investigations of the Commonwealth Ombudsman Office, found that:

“As of October 2016, no Australian legislation prohibited franchising of an AOC, subject only to the exclusivity of the AOC Holders operational control, and that remained the case as of 25th March 2020.”

This finding clearly supported my position.

CASAs initial position prior to the release of phase one of the investigation, was the opposite of the Ombudsman’s finding and this was in fact, the basis of CASAs action against my business and can clearly be demonstrated to be so.

For clarity, the CASA action was based on CASAs assertion that the structure was illegal and that franchising of an AOC was prohibited. The Ombudsmans Office found that was not the case and that it was not illegal.

I had a telephone call with the Commonwealth Ombudsman Office after the release of Phase one of the investigation, and the Assistant Director of Investigations advised me that his findings are the more substantive findings when compared to CASAs. If I accept that, then CASA has acted unlawfully.

The significant damage to so many businesses, employees, suppliers, customers, and my own family may have been avoided had CASA acted lawfully against me and my business, and most especially so if CASA had followed its own procedures in its Enforcement Procedures Manual.

It would be relevant to read two initial pieces of correspondence that were sent to CASA. Within a few days of CASA initiating their action I had sent a response to both my CASA Region Manager and the CEO of CASA, Mr Shane Carmody. I refer you here to posts #1497 and #1498. Glen Buckley and Australian small business -V- CASA - Page 75 - PPRuNe Forums




CONSIDERATION TWO_ CASA HAD ALWAYS SANCTIONED AND APPROVED MORE THAN ONE FLYING SCHOOL TO OPERATE UNDER A SINGLE AIR OPERATOR CERTIFICATE. REVERSING APTAs APPROVAL OVERNIGHT WAS A COMPLETE CHANGE OF POLICY APPLICATION AND WAS APPLIED TO APTA ONLY. THAT ACTION BY CASA WAS NOT BASED ON ANY SAFETY CONCERNS OR REGULATORY BREACHES. IT WAS A ‘CHANGE OF OPINION”, WITH NO VALID BASIS.

First and foremost, I believe the most critical aspect to identify, is that the practice of more than one flying school operating under a common Air Operator Certificate (AOC) was in fact, standard industry practice, and fully approved by CASA. That had always been the case.

CASA has led the Ombudsman’s Office to be of the view that APTA was something completely new, and that previously CASA had not sanctioned this practice i.e., more than one entity operating under a single AOC. For CASA to present their contention is simply being untruthful and misrepresenting important underpinning facts to your office.

The APTA model operated in exactly the same way as CASA had permitted other operators, with Members maintaining their own business, while handing over safety and compliance. APTA was resourcing an existing CASA sanctioned practice to design a safer and more compliant system. The truth is that the APTA system provided far higher levels of control than previous operations that CASA facilitated.

If CASA continues to represent their case that CASA did not permit more than one flying school to operate under a single AOC, it can easily be disproven.

One only has to question how the Latrobe Valley Aero Club was CASA approved to be operating right up until the minute it applied to join APTA. That application to join APTA was rejected by CASA in the initial notification of October 2018, which can be found at Post#44 Glen Buckley and Australian small business -V- CASA - Page 3 - PPRuNe Forums

The truth is that Latrobe Valley Aero Club was operating under another operator's AOC, yet CASA would not permit them to operate under APTAs AOC. That decision by CASA needs to be justified, and the reasons for the differing approach by CASA needs to be ascertained.

In my local region, whilst Latrobe Valley Aero Club was operating under the AOC of another organisation right up until the day that they elected to transfer to operate under APTA. Similarly, Ballarat Aero Club had been operating under the AOC of another organisation. My own organisation had also provided coverage for a school referred to as TVSA. There were also a number of other flying schools in outer metropolitan Melbourne i.e., Point Cook and Avalon operating under these arrangements with other flying schools. I had also previously used this arrangement to facilitate a program for Air Force cadets. The practice was common throughout Australia, and for CASA to assert that is not the case is a blatant misrepresentation, and easily proven to be so. Interestingly, this exact practice was also common in QLD, the region that Mr Martin came from. He had permitted it in his home state of QLD, but in Victoria, he would not permit it.

In the design of APTA I actually took an existing CASA sanctioned and approved practice and spent two years and hundreds of thousands of dollars designing a system side by side with 10 CASA personnel that was then fully re-approved by CASA in April 2017. I had been providing AOC coverage for other organisations throughout my businesses previous 13 years of operation. I took an existing CASA sanctioned practice and dramatically improved on it, while providing an opportunity for well-intentioned smaller operators, predominantly in rural areas to thrive, through an industry leading system that measurably increased safety and regulatory compliance. CASA approved this system in April 2017, and audited it 6 months later in November 2017, and approved bases under it. No concerns were ever raised by CASA.

I must emphasise that the 10 CASA personnel were heavily involved in every aspect of the design of APTA and assessed over 600 procedures and approved them.

I have written to CASA on multiple occasions to obtain a response and bring clarity to the matter i.e., did CASA previously approve multiple entities to operate under one AOC? All those written requests that I have on file have been ignored. CASA is very reluctant to respond to this query. I can understand that they would be.

Once it can be demonstrated that CASA did in fact sanction multiple flying schools under an AOC, it will allow a comparative assessment. If CASA had not previously permitted and approved such operations, then none will exist, so a comparative assessment of the alleged deficiencies in APTA systems and procedures compared to other operators cannot be made.

If, however, it is ascertained that CASA did permit multiple flying schools to operate under a single AOC, then the APTA model can be compared to other existing models. i.e., a comparison of oversight, operational control, safety, compliance, manuals and procedures, safety and incident reports, risk assessments, accident investigations etc etc can be made. For CASA to act against my business and not others, the reasonable assumption would be that there is a grave and imminent risk to aviation safety, when clearly that is not the case. Why was APTA selected?

This may assist to clarify the reasons why APTA was not permitted to operate, yet other organisations were, and if there was a valid basis for CASAs actions and were CASAs actions proportionate and reasonable in the circumstances. Was APTA deficient or was it in fact offering industry-leading levels of control? A comparative analysis will quickly provide the answers required.

At this stage I would refer you to Post #55 in PPRuNe Glen Buckley and Australian small business -V- CASA - Page 3 - PPRuNe Forums If you are a Pprune Member you will be able to open up attachments, and the Aviation Ruling is an attachment at the bottom of the post. This refers to the Aviation Ruling that was released by CASA in 2006 and was the basis of CASAs action for the first two months of restrictions placed on my business. After 2 months CASA realised that they had erred in using it, and CASAs alternating narrative commenced, as they moved on to different topics.

Ironically, the very fact that CASA produced the Aviation Ruling in 2006, suggests that at the time of its release, CASA did carefully consider the matter of more than one entity operating under an AOC. The matter arose because of a well-known incident in the Charter sector (passenger and freight carrying). CASA determined that the Aviation Ruling would apply to the Charter sector and not the Flight Training sector. CASA advised the flying schools of their decision and fully sanctioned the flight training sector sharing an AOC, right up until they reversed APTAs approval, 15 years later.

In your correspondence you were of the understanding that “in creating APTA you were seeking to create an entirely new business structure, with Members control over their business”.

That understanding is not correct. I took an existing CASA accepted practice, replicated the existing CASA accepted standard and significantly improved it. Exactly as with previous operators doing the same thing. Businesses maintained control over their own business i.e. what electricity provider they used, what colour they painted the walls, etc. as they always had.

APTA was fully responsible for all areas that CASA had an interest in i.e. safety, and regulatory compliance. Business matters are not generally under the remit of CASA, whereas safety and regulatory compliance, clearly are.

To completely resolve this matter one simple question, needs to be put to CASA, and a truthful answer obtained.

Immediately prior to reversing the CASA approval of APTA on 23rd October 2018, was CASA permitting APTA and many other AOC Holders around Australia to have more than one flying school operating under a single AOC?


CONSIDERATION THREE- THE REQUIREMENT FOR CONTRACTS WAS A UNIQUE REQUIREMENT PLACED ON APTA ONLY AND NOT OTHER OPERATORS

The issue of the contracts can now be addressed. I refer here to the initial notification that came from CASA and can be accessed via the PPRuNe thread at Post #44 Glen Buckley and Australian small business -V- CASA - Page 3 - PPRuNe Forums

Once the Ombudsman’s Office can establish the truth that CASA did sanction the practice of more than one flying school operating under a single AOC and had done so for at least the entire 25 years of my involvement in the industry, and probably longer it will allow a comparative assessment, and that opportunity is essential. For example, why did CASA place restrictions on APTAs ability to trade when other Operators did not have that requirement to produce a contract, or restrictions placed on their businesses. It doesn’t seem reasonable in the circumstances. CASA is clearly placing a higher requirement on me than other operators. My intent is to fully comply with any CASA requirement placed on me and have demonstrated over the previous decade with my school, Melbourne Flight Training (MFT). But if CASA is able to identify that something is “wrong”, then it is incumbent upon CASA to identify the legislative deficiency and advise me what “right” looks like, so that I can address it.

The requirement placed on me by that initial notification to produce contracts within 7 days, or potentially have all operations ceased, was a new and unique requirement that had not been placed on other Operators. I have no issue with CASA making that request. That request, however, should not be accompanied by a letter from CASA advising only 7 days surety of operations, especially if it CASA has identified that there is not a safety risk, and there are no risks to anyone’s safety at all. It just does not seem reasonable in the circumstances, surely a less combative approach would be used for the initial notification such as a face-to-face meeting seeking a mutually agreeable solution which I would have been very receptive towards.

The fundamental question can now be asked. Why did CASA place restrictions on APTA's ability to trade based on a lack of contracts, when the truth is, CASA had never required contracts of any other Organisation conducting operations in the same way, and there was no pre-existing or legislative requirement to have a contract. It was a unique requirement placed on my business only.

Once CASA placed restrictions on APTAs ability to trade, it was incumbent on CASA to identify the legislative deficiencies in the existing legislation, clearly and concisely identify what CASA require, and do so in a timely manner.

These administrative delays as well as being unacceptable cause negative commercial impact, which in itself may compromise aviation safety.

Mr Alecks view was a retrospectively applied requirement based on his particular requirement, and was not CASA practice, and had no basis in law. My obligations as the Authorisation Holder/AOC Holder were fully contained within the many thousands of pages of existing CASA legislation, and in the extensive manuuals and procedures that CASA had helped me write, what else was I required to attend to?

I had absolutely no concerns about complying with any reasonable CASA direction or request.

To completely resolve this matter one simple question needs to be put to CASA, and a truthful response obtained:

If we now accept that CASA had for at least the last 25 years, and potentially longer, approved other operators to share an AOC, then does CASA have on file ANY contracts from any other operator in Australia and if so, could they provide them to the Ombudsman’s office as an example of what is “acceptable” to CASA?, If CASA identify that they have never made that requirement and do not have any other contracts on file, could they explain why APTA had unique requirements on its business?