12th April 2019, (Friday)
CASA advise that they will contact me verbally over the weekend.
16th April 2019 (Tuesday)
CASA advise that they would like another teleconference.
17th April 2019 (Wednesday)
CASA advise that they have some “disappointing news”. The contracts were now not acceptable, CASA put a proposal to me that they would now pursue a different approach, although a new approval for interim operations would now be issued. It was the “interim approvals” that bought so much instability and uncertainty to the business. The matter was still not resolved, and another interim approval to operate is issued. Any remaining confidence in the APTA model and my flying school, MFT by customers and potential customers is now lost as they have been in “limbo” for 6 months already. Their reasonable expectation, as was mine, was that this matter should have been resolved long ago.
24th April 2019
I write to CASA raising my concerns. Attached as Appendix D
30th April 2019
CASA write to me advising that they have “now received the external legal advice and that it has confirmed, inter alia, that Part 141 certificate holder is
not “precluded from entering contractual arrangements with other parties to deliver flight training activities.
Interestingly this legal advice, that CASA received does not mention Part 142 Operations which are contracted checking and training and make up over 90% of APTAs revenue. I believe that CASA received legal advice on part 142 operations but chose to avoid mentioning Part 142 activities because these are clearly permitted and exactly what Part 142 is all about i.e. contracted checking and training. I have asked CASA to bring clarity to Part 142 operations on a number of occasions, but they choose not to answer this question. This new legal advice received 6 months later, differs very much to the assertion by CASA in October 2018 where Mr Alecks position was “The Ruling does not permit an AOC Holder to authorise a third-party body corporate to conduct operations under its AOC. This was Mr Alecks opinion and was later found incorrect by the Ombudsman in Stage One of his investigation, when the Ombudsman found; “As of October 2016, no Australian legislation prohibited “franchising of an AOC”.
This point is significant for the investigation by the Ombudsman office, because the Ombudsman is of the view that CASA took legal advice. I was advised by CASA that in fact at the time of CASA initiating their reversal of approval in October 2018, they had NOT received external legal advice. CASA advised me that they only sought external legal advice much later on, and in fact only received that external legal advice in April, which is 6 months after the restrictions were placed on the business. If that is the case, then the truth is that when CASA initiated their action, I was dealing only with the opinion of Mr Aleck.
In phase two of the Ombudsman investigation (not yet finalised) the Ombudsman was of the view that CASA had received external legal advice. I do not disagree that CASA did perhaps obtain legal advice, but I would question the timelines and what information CASA provided to the legal firm i.e., was it accurate? Based on the fact that the legal advice was only confirmed as received some time just prior to 30th April, (“
now received the external legal advice’) leads me to believe that in fact there was no prior external legal advice and confirms my view that I may have been dealing with a CASA employees’ opinion, and not any basis in law or safety. Mr White had also confirmed to me that there had been no prior external legal advice taken by CASA).
The matter should immediately have been resolved at this stage.
Despite this, CASA offer yet another short-term interim approval for APTA to operate, while CASA look at alternative options.
30th April 2019,
I advise CASA of the impact on my business and my health. Refer Appendix D. With the restrictions on the businesses ability to trade remaining in place, and the matter far from resolved, I will be unable to meet the upcoming payroll for my employees, and I have only two options.
Shut the business down or try and sell the business at a nominal value.
If I shut the operation, hundreds of student’s part way through their training would have been impacted, and many staff would have lost their jobs. Similarly, Suppliers would be impacted. Several businesses dependent on APTA had already been forced into closure because of the 6-month delay, and the several remaining businesses would also be forced into closure.
June 6th, 2019
CASA CEO Mr Carmody sends me correspondence “…
To be absolutely clear, if CASA does not have the evidence we require i.e. contracts, in hand by 1st July 2019, we will have no choice but to consider what further action we may need to take in relation to the flight training operations in which APTA and its affiliates are engaging.”
June 30th, 2019
The decision to sell the business had now been made and the business was sold. The business previously valued at approximately $4,000,000, is sold to an APTA customer (to ensure their own continuity of operations) for 5% of its value at approximately $200,000. Not one cent ever enters my own account, and all payments are made directly to creditors of APTA who have been impacted by the last 6 months of trading restrictions on the business.
The reason for the 5% was the business after 8 months was operating on an interim approval. It had no surety of operations after June 30th as the CASA approval was to expire. The matter was no closer to being resolved. By now, all confidence in both APTA and MFT had been lost, the situation was not recoverable. By the Member purchasing the business at a nominal value, they are able to ensure their own survival.
CASA continues pursuing the closure of APTA and forces all remaining customers to leave APTA. APTA continues operating under different ownership but now as a single school operating alone. I hope that the above timeline you can understand that I may not believe that CASA made a number of good faith attempts, and did not provide me with sufficient guidance.
The very fact that CASAs attention was only on contracts, and not on the Exposition is inexplicable.
The “Contract” being the commercial agreement between APTA and its Members. CASA would not normally have any involvement in these commercial contracts. CASA never required contracts of any previous operator. It was a new requirement that CASA placed on my business only.
The “Exposition”, on the other hand is the suite of CASA approved manuals for our operation., This particular “contract” is referred to by CASA as the Exposition. To explain the significance of the Exposition, it may be most appropriate if I draw on the legislation and CASAs own information. This information is important. Had CASA had concerns about operational control or any aspect of operations they should have been working with me on the Exposition. Its inexplicable that they had no interest in the “exposition” yet were insistent on becoming involved in the commercial contracts between customers and myself. The existing contract that APTA had adopted for the last two years directed signatories to operate in accordance with the Exposition.
If I believe that CASAs motivation was safety or regulatory compliance, they would have attended to it in the Exposition. CASA placing restrictions on the business based on commercial contracts is inexplicable, has no precedent in the industry, and has no basis in law.
To gain an appreciation of the Exposition, I draw your attention to the following information from CASAs website and the legislation.
“An Exposition is a document, or set of documents, which describe how your organisation will conduct its operations safely. It sets out both for CASA and the personnel involved in your operation how you intend to comply with all applicable legislative requirements and manage the safety of your operation.
The relevant regulations will outline what you must include. It will include information about your organisation, personnel, facilities, policies, systems and procedures for conducting your activities.
A flight training organisation is required to describe procedures by which the operator conducts and manages its training activities, including the supervision of instructors and trainees. Your exposition must accurately reflect how you will conduct your activities. It needs to be written and structured in a logical way. This will ensure the relevant parts can be readily identified and provided to your personnel who are responsible for complying with them.
Example, CASR 142.340 requires a Part 142 flight training organisation to describe procedures by which the operator conducts and manages its training activities, including the supervision of instructors and trainees. Your exposition must accurately reflect how you will conduct your activities. It needs to be structured in a logical way. This will ensure the relevant parts can be readily identified and provided to your personnel who are responsible for complying with them. The procedures in your exposition should also provide enough detail so that your personnel can conduct their activities consistently in line with your intentions. Each procedure should address, where required.
- What must be done?
- Who should do it?
- When it must be done.
- Where it must be done
- How it must be done
- Record Keeping
- How the procedure is monitored and approved
Once the relevant authorisation has been issued by CASA, you are obliged to conduct your activities in accordance with your exposition.
I have extracted that from CASAs own guidance material, and below is the legislative requirements for the Exposition.
Below is an extract from CASR 142.340. This link outlines the regulatory requirements for the contents of the Exposition. It clearly demonstrates that the Expsition is the place to making changes, and not a commercial contract, although I was open to that idea if that was CASAs preference as it was. It was unusual, but I was willing to comply.
CIVIL AVIATION SAFETY REGULATIONS 1998 - REG 142.340 Part 142 operators--content of exposition (austlii.edu.au)
Considering the significance of the Exposition, that is the location that any changes should have been made if CASA had concerns about operational control or any other matter. Not in the contracts. I was always fully compliant and willing to embed anything into the contracts, but as stated I was wholly dependent on CASA clearly stating what it was they wanted that was in addition to what I already had. What I already had was an Exposition that was CASA approved and attended to every piece of relevant legislation
The purpose of this correspondence is to ensure you are aware of my perspective that CASA did not make a number of good faith attempts, reversed their decision, and did not act in a timely manner. It was those administrative delays that caused so much commercial harm.
Mark, I draw on 25 years experience in the flight training industry, and half of that as the owner of a highly respected flight training school with a demonstrated industry leading record of safety and compliance. The CASA action was the most aggressive action I have seen taken against any organisation ever. In cases where there have been allegations of safety breaches, those organisations have been afforded more procedural fairness. From my own personal experience, and that is shared by my management team, those CASA employees were not acting in a well intentioned manner and were pursuing an agenda. It felt very much as the business owner that this matter was not going to be resolved. I am in the middle of a house move and need to make this submission to you, please excuse me reverting to dot points for the last part of this correspondence. I hope I have conveyed:
The unusual nature of CASA requiring the commercial contract to be the place to outline safety matters, rather than the Exposition.
Appreciate that if CASA had concerns about my business, then it was logical that CASA would pay attention to the Exposition, although CASA never requested changes to the Operations Manuals (Exposition). CASA insisted that changes be to the commercial contracts. This was highly unusual and not accepted industry practice, or previously required by CASA of other flying schools.
To understand the significance of the Exposition to matters that CASA was concerned with i.e. matters of safety and compliance. This was the document that everyone had access to and is used to maintain operational control and ensure safe and compliant operations. As the Authorisation Holder and owner of MFT/APTA I was responsible and accountable for the quality outcomes. This is the suite of documents referred to by all personnel at all bases daily.
To appreciate the relative insignificance of the commercial contract to matters of safety and compliance. By convention commercial contracts are usually signed and filed and accessed by only a select few. They are not regularly updated, widely distributed, and would be a highly ineffective way of managing operational control or safety matters, particularly considering that the Exposition is available, and the expected primary source of such information. This was inexplicably CASAs preferred option. It was unusual but I was always willing to place anything into the contract that CASA required. After all, I was 100% responsible and accountable for all operations. There is no reason that I would be resistant to any CASA requirements that CASA need in order to make that more clear than what already exists in the legislation. On this matter my interests and CASAs were closely aligned. It should have been easy to resolve.
Understand that had CASA not placed restrictions on my businesses and instead resolved this without those restrictions in place. None of this damage would have occurred. None of it. The restrictions were not reasonable.
To understand that CASA never required these contracts of any operator previously.
That CASA placed restrictions on my business ability to trade and that those restrictions continued for 8 months until the business was forced into a cashflow crisis. There was no safety case and no regulatory breach
I would place anything that CASA required in any document, but it was incumbent on CASA to provide the required information. I could not resolve this matter. Everything was already attended to.
Importantly, I had no opposition to CASA becoming involved in commercial contracts, I was at all times willing to comply with absolutely anything that CASA required, despite the highly unusual nature of their involvement. This situation is even more unusual that at no time CASA ever required any structural or organisational changes to the Exposition. The Exposition being the area that CASA would normally involve itself, after all that is where all requirements for safety and compliance are contained. Any commercial arrangements with suppliers etc would normally be held in the contracts, which CASA traditionally has had no interest in.
CASA never required contracts of other operators. This could easily be proven if the Ombudsman’s office simply asked CASA if they held on file any contracts between suppliers and customers in the flight training industry, and more specifically were other flying schools in the same or similar arrangements as APTA/MFT required to have a contract, and if so could they provide a copy to the Ombudsman’s office. The truth is that CASA never required this of the other Operators doing what I was doing. I know. I have asked them.
I believe that the Ombudsman’s Office also needs to understand that the CASA regulations regarding supervising, mentoring, oversighting, quality control, operational control, checking, auditing training records etc were written before mobile telephones and the internet were utilised. They were written decades ago for a completely different environment, and the truth is that the regulations were not “fit for purpose”. The APTA system was industry leading and fully utilise advances in technology to maintain unparalleled levels of oversight and operational control. Any comparative analysis between my operation and another would show the strength of our systems, personnel, and resources. We had the largest flight safety department of any flight school in Australia. CASA interestingly has never made any allegations regarding quality outcomes. The line of argument initially was that I was operating illegally. Once CASA discovered they had erred on this matter, rather than admit error it became a topic of “contracts”
CASA had planned to have finalised this regulatory change program to make them more fit for purpose in 2006. It was finally partially delivered 10 years and many millions of dollars over budget. That existing legislation only became more outdated as a result of those delays, as did the “new”, Part 61/141/142 still awaiting implementation. Technology was moving ahead in leaps and bounds. When the CASA legislation was written, we could only reach each other if we were at home and via the landline if the phone wasn’t engaged. Consider how much better we can communicate now and improve safety outcomes.
I took advantages in technology over the last 25 years and applied them to the revalidation process to ensure those increases in technology were applied to supervising, mentoring, oversighting, quality control, operational control, checking, auditing etc as I developed my Exposition.
The notification of the commercial impact was notified to CASA on multiple occasions. There could be no doubt in the mind of Mr Aleck, Mr Martin, and Mr Crawford of the commercial impact. I have the evidence in writing. That knowledge of the commercial impact would have been amongst their respective considerations when making decisions on how this matter would be managed.
In closing, please understand that I waited a staggering 6 months for CASA to advise what they wanted in the contracts. They provided that guidance on April 2nd, 2019. I returned it April 9th. On that day CASA advised it was acceptable, and later the same day applied a reversal, and the entire matter was no closer to being resolved.
Please understand that this was a matter that could not be resolved by me. I attended to every single requirement of many thousands of pages of documentation contained within CASA regulations.
There were no safety breaches or concerns ever raised by CASA. There were no regulatory breaches. The entire system was designed with CASA. The system was approved by CASA 18 months earlier. There was only one CASA issued authorisation and that was the single authorisation that entities operated under. I had 25 years industry experience and was fully aware of my responsibilities and accountabilities as that Authorisation Holder for the quality outcomes across all bases. Our Exposition was written in that manner, CASAs own legislation is written in that manner.
As the Owner of that flight training organisation and CASA issued authorisation, I was fully aware of the responsibility and accountability. I drew on 25 years industry experience, half of that as a CASA approved Chief Flying Instructor (CFI), CASA Approved Head of Operations (HOO), CASA Approved CEO, and a Grade One Multi Engine IFR instructor with 25 years’ experience. I had also owned a flying school for more than a decade and based on CASA feedback, that Organization had delivered industry leading standards of safety and compliance.
This need not have been such a “confusing” issue for CASA. Many operators had been doing the same thing well before I joined the industry over 25 years ago. CASA have attempted to present this concept as something not seen before. That is not truthful. One only has to ask how Latrobe Valley Aero Club operated up until the day they joined APTA. The provider of the AOC coverage, the day prior wasn’t required to have a contract. I was.
I feel strongly that CASA should have obtained legal advice before commencing their action and placing restrictions on the business.
APTA met every existing piece of CASA legislation and that was embedded into a comprehensive manual suite. I was in an impossible situation. It was CASA that wanted the additional text and to become involved in the contracts. They were seeking something that was in addition to the legislation. I could not resolve this situation. It was incumbent upon CASA to advise me what they wanted. This is critical to this entire matter. CASA initiated the action in October 2018. At that stage I depended on them to advise me what CASA wanted in the contracts. With trading restrictions on the business in place for a staggering 6 months, the business was doomed.
The truth is that had Mr Aleck/Martin/Crawford chosen to resolve this matter, it could easily have been resolved. That is the plain and simple truth. Furthermore, it could have been resolved promptly i.e., 3 working days.
The matter of contracts did not need to be an issue. Mr Martin, Mr Crawford, and Mr Aleck chose for it to be an issue.
At any stage CASA needed only to tell me clearly and concisely what they wanted in the “contracts”. I choose the words deliberately because that is in fact the very terminology in the Civil Aviation Act as one of the core functions of CASA, refer Appendix A
The truth is that after 25 years of experience in the flight training industry, with almost half of that as the owner of a highly respected flying school, I was acutely and fully aware of my responsibility for the outcomes of all operations delivered under my AOC. My responsibility was 100%. The existing legislation makes that very clear. I had been a CASA approved Chief Flying instructor for over a decade, CASA approved Head of Operations and a CASA approved CEO. It is highly unlikely that I would have passed each of those CASA assessments if I was not fully aware of my obligations.
The contract was a commercial agreement between APTA and its Members. The agreement was in two parts. Part A with the legal component and Part B with the intention of APTA. I provided the contracts to CASA on multiple occasions during the 18 months lead up to CASAs reversal. CASA did not show any interest in the contracts, their interest understandably, was the Exposition. As it should be. I reiterate that CASA have never required contracts of other Opeartors. Any changes to APTA should have been reflected in the Exposition. If CASA want to become involved in the commercial aspects of the agreement, which are in the contract, the onus is on CASA to advise me of the content that they require. A copy of the contract is attached as Appendix E.
Once again, please accept my apologies for a document that has not been proofread as much as I would have liked. I am limited for time, thank you for your consideration.
Respectfully
Glen Buckley.