In the
AviationAdvertiser Paul Phelan writes:
Policy is not law – AAT buckets CASA decision
An Administrative Appeals Tribunal decision yesterday [March 21] declared a long-disputed CASA policy to be “unlawful,” raising questions over a host of past decisions and the CASA policies on which they were based.
The applicant in the AAT was Caper Pty Ltd, trading as Direct Air Charter, represented by aviation law specialists Maitland lawyers, with AAT Senior Member Egon Fice presiding.
In May 2010 CASA had served a “show cause notice” of its intent to suspend or cancel the company’s AOC saying it had reason to believe the operator was conducting regular public transport (RPT) operations between Darwin and Bathurst Island, which CASA said its AOC did not authorise.
The legal definition of the differences between charter and RPT, and the confusion surrounding the issue, have been the greatest single source of disputation between regulator and industry for over 25 years, and various interpretations have triggered numerous regulatory forays that resulted in the closure of aviation businesses.
Direct Air Charter is a general aviation operator headquartered in Melbourne, with bases and operations in Western Australia and the Northern Territory; and the dispute surrounded its air charter contract with tour operator Australian Adventure Tours (coincidentally AAT), which CASA considered constituted RPT flights.
On 7 September 2010 the Company had applied to the AAT to reverse CASA’s decision and to determine that the conditions on Caper’s Air Operators Certificate, authorising the Bathurst Island flights, should remain unaltered.
The automatic stay provisions set out in s 31A of the Act then automatically applied, and the decision was stayed for 90 days or for “such a period as the Tribunal might order.”
A month later, the Tribunal ordered that the decision be stayed until the application was heard or determined, or until further order of the Tribunal.
In a cogent, detailed and comprehensive analysis, Senior Member Fice’s decision examines the history and details of the contract between the parties, the concept of the “classification of operations,” witness statements, CASA policy documents, relevant legislation and case law reaching back to the 1920s, archived air accident enquiries, the legal language and even the grammar and dictionary definitions in the relevant Act and Regulations, Aussie Adventure Holidays’ publicity material, reports from a CASA investigator who flew on one of the tourist flights, and the Tribunal’s own interpretations of the spirit and intent of the law.
The Tribunal noted:
“CASA has published what is described as Regulatory Policy regarding the classification and regulation of closed charter operations under CAR 206(1)(b)(ii). That policy document is signed by Mr John F McCormick, who is the Director of Aviation Safety. It was issued in July 2009 and reviewed in July 2010. It is properly described as Departmental Policy as distinct from Ministerial Policy. In its reasons for making the policy, CASA has indicated that the current distinction between charter and RPT will soon disappear and be replaced by one category, Passenger Transport. However, this has not yet occurred. The policy document purports to provide clear guidance on the classification of operations as closed charter or RPT and the limitations and condition which may necessarily be imposed on certain kinds of closed charter operations.”
On February 25, Mr McCormick told a Senate Committee that CASA was cracking down on the practice of ‘borrowing AOCs and using other people’s activities:’
“We ….. have CAR 206, which is about ‘interposed entities’ – borrowing AOCs and using other people’s activities. That has resulted in quite a few operators who no longer can offer flights on a charter basis when in reality they were offering them on a schedule at a fixed fee, sometimes through a travel agent, and when in reality they were avoiding the sort of oversight they would get if they were regular public transport.
“We have gone out of our way to stamp that out. We have seen very good results on that. It has not been the world’s most popular program as you can imagine, but it is something we should have done, and [CAR 206] has been recognised as bad law for some 26 years.”
The Tribunal’s comments effectively confirm Mr McCormick’s assessment of CAR 206 as “bad law,” but are unflattering about CASA’s interpretation of that law as expressed in the policy document:
“What appears from CASA’s analysis of CAR 206(1)(b)(ii) is that unless the persons purportedly chartering an aircraft have some identifiable and close relationship, although that relationship may or may not be relevant for the purposes of characterising the charter, if the flight is conducted in accordance with fixed schedules and between fixed terminals, it is an RPT operation. That, in an unexplained way, is said to reduce the level of safety. Quite plainly, this makes no sense. Whether the passengers who fly on these aircraft have some pre-existing relationship makes no difference to the safety of that operation. If CASA’s concern is with the numbers of passengers carried or the frequency of flights, it can impose conditions on an AOC under s 28BB of the Act.”
Elsewhere he states:
“In my respectful opinion, CASA’s Regulatory Policy dealing with the classification and regulation of closed charter operations under CAR 206(1)(b)(ii) issued in July 2009 is simply incorrect and, accordingly, unlawful. It has relied on the wording used in Air Navigation Regulation 191(c) which uses words not found in CAR 206(1)(b)(ii). No reference is made in that policy document to the change in the wording or the reasons for that change. In fact, in support of the policy, CASA has quoted from cases that have dealt with Air Navigation Regulation 191. I decline to follow it.”
The Tribunal concluded:
“I find that the decision made by CASA on 7 September 2010 to cancel one of the authorisations contained in Caper’s AOC in respect of its operations between Darwin and Bathurst Island for the purpose of conducting the Tiwi Islands tours was incorrect. I set aside that decision and instead determine that the conditions on Caper’s AOC should remain unaltered. Caper should be permitted to continue with its charter operations between Darwin and Bathurst Island.”
A number of aviation businesses whose operations have been “stamped out” by regulatory policy, say they are now reconsidering their positions.
The full AAT Decision is published
HERE and is a worthy insight into the appalling and incompetent aviation regulatory process that has existed in Australia for many years.
This is a landmark decision in clarifying the definition of Regular Public Transport in Australia and defining CASA's power to regulate by Policy rather than Regulation and brings into question CASA's repetitious use of precedents (e.g. Seaview and Coral Sea Air) and incorrect internal policy interpretations of it's own regulations.
A significant number of Australian aviation operators have been forced out of business by CASA over the past 23 years, by "bad law", very badly interpreted and administered.
I am sure this situation would not have occurred had CASA efficiently and promptly provided new, simple, concise Regulations as soon as possible after 1988, rather than procrastinating for the past 23 years!
I suspect a number of operators forced out of business by CASA may now be considering their legal options.