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GB Shaw & Co Pty Ltd trading as Dalby Air Maintenance and Civil Aviation Safety Authority [2013] AATA 736 (11 October 2013)

Last Updated: 11 October 2013

[2013] AATA 736

DECISION

The decision under review is affirmed. Pursuant to s 43(5B) of the Administrative Appeals Tribunal Act 1975 (Cth), Friday 18 October 2013 is specified as the date on which this decision comes into operation. The stay granted by the order of 7 August 2012 is extended to 6 pm on 17 October 2013.

........................[Sgd]................................................
Deputy President P E Hack SC

CATCHWORDS

CIVIL AVIATION – cancellation of a certificate of approval – breach of condition of stay – whether fit and proper person – decision affirmed

LEGISLATION

Civil Aviation Regulations 1988, reg 269(1)(d)

CASES

Re Taylor and Department of Transport (1978) 1 ALD 312

REASONS FOR DECISION

Deputy President P E Hack SC
11 October 2013

Introduction

1. The applicant, GB Shaw & Co Pty Ltd, operates a general aviation maintenance business at Dalby, Queensland under the name Dalby Air Maintenance. Since November 2008 it has been the holder of a certificate of approval issued by the respondent, the Civil Aviation Safety Authority, authorising it to undertake maintenance on the aircraft or aircraft components specified in the certificate. Mr Glen Shaw, a licensed aircraft maintenance engineer, has been the applicant's chief engineer and its manager at all material times. He is the applicant’s controlling mind despite not being either a director or member.
2. In July 2012, following an audit by officers of the respondent that commenced in July 2011, a delegate of the respondent decided to cancel the applicant's certificate of approval pursuant to reg 269(1) of the Civil Aviation Regulations 1988 (Cth). These proceedings were then commenced seeking a review of the respondent’s decision to cancel. On 7 August 2012 the implementation of that decision was stayed pending the hearing and determination of the application on certain conditions proposed by the respondent and agreed to by the applicant.
3. For the reasons that follow, I am of the view that the decision ought be affirmed although, as will appear, for somewhat different reasons to those of the original decision-maker.

Procedural background

4. To understand why that is so it is necessary to set out some of the background to the decision. That commences in July 2011 when the respondent’s inspector, Mr Gerard Nolan, arrived at Dalby Air Maintenance to undertake an audit of the applicant’s work. Mr Nolan's investigations led to the respondent sending a notice to the applicant dated 23 September 2011 requiring it to show cause why its certificate of approval ought not be varied, suspended or cancelled. The notice, which extended over 34 pages, listed a very great number of matters where Mr Nolan had concluded that the applicant’s processes, either generally or in particular cases, had fallen below an acceptable standard. The applicant’s solicitors responded to the show cause notice by correspondence of 14 November 2011, a document extending over 76 pages. There was a supplementary show cause notice sent on 8 March 2012 which was responded to on 2 April 2012.
5. The decision in issue in these proceedings was made on 16 July 2012.
6. On 7 August 2012 directions were made in anticipation of a hearing over five days in January 2013. Importantly, the implementation of the decision under review was stayed until the hearing and determination of the proceedings (or earlier order) but that stay was made subject to certain conditions including one in these terms,

Condition 3 Maintenance at Temporary Locations
In relation to all aircraft maintenance performed at temporary locations under the Applicant’s Certificate of Approval the Applicant will:
(a) provide to CASA in writing the registration number(s) of the aircraft involved in such maintenance;
(b) provide to CASA copies of the final work package and certifications on completion of such jobs at the earliest practical time; and
(c) CASA will not unreasonably delay its review of the maintenance records supplied in accordance with paragraph (b) above.

7. The matter eventually came on for hearing in July 2013. The evidence was heard over 13 days. The transcript exceeds 1060 pages and the parties tendered more than 80 exhibits including eight lever arch volumes of documents which exceed 3200 pages arranged by the respondent under various issues. The parties agreed to lodge and serve written submissions after the conclusion of the hearing. The original deadline for delivery of submissions was extended. Eventually, by early September 2013, the parties had lodged written submissions exceeding 300 pages.

Consideration

8. I have reached the conclusion that the material amply demonstrates that the decision made was correct and ought be affirmed. I have reached that conclusion having regard to the totality of the allegations advanced by the respondent about the manner in which the applicant undertook its maintenance and its general practices and procedures. But in any event, and quite apart from the vast amount of evidence regarding the findings made on the audit, I have reached that same conclusion having regard only to one narrow, and essentially undisputed, aspect of the evidence, the applicant’s breach of one of the conditions on which a stay of the implementation of the decision was granted.
9. Because I take the view that the applicant's disregard of the requirements of the stay so clearly demonstrates an absence of fitness and propriety I do not intend to deal with the vast array of evidence that touches upon the other allegations made by the respondent even though I am clearly of the view that those matters also demonstrate egregious breaches of the applicant's duty and that the applicant is not a fit and proper person. To record adequately the necessary findings about those matters would add nothing to the conclusion I have reached in relation to the applicant's breach of a condition of the stay and would necessarily delay the making of the decision by some weeks. To delay the decision would be antithetical to the Tribunal's statutory objectives and would not comply with the obligation, imposed by s 9A of the Civil Aviation Act 1988 (Cth), to regard the safety of air navigation as the most important consideration.
10. The terms of Condition 3 of the stay granted on 7 August 2012 have already been noted. The applicant breached that condition in September 2012, only one month after the stay had been granted. The breach came about in these circumstances. Condition 3, by its terms, acknowledged that it was not always possible to undertake aircraft maintenance at the applicant's premises at Dalby. It contemplated that there might be occasions when it was necessary for the applicant to perform aircraft maintenance at other locations. But where it did so, the applicant was obliged to notify the respondent of the registration number of any aircraft involved in such maintenance and to provide to the respondent copies of the paperwork associated with that maintenance “at the earliest practical time”.
11. Aircraft VH-ZOE (ZOE) was an Ayres Thrush agricultural aircraft. For reasons that are not presently material, the respondent had made a direction that ZOE not be flown. Despite that direction the owner of ZOE flew it to Geraldton in Western Australia. It is not suggested that Mr Shaw was involved in any way with that apparent breach of the respondent's direction.
12. On 11 September 2012 Mr Shaw, and one of the applicant's employees, Mr Clynton Chandler, travelled to Geraldton to undertake the 100 hourly periodic inspection on ZOE. The conditions of the stay did not prevent that from being done however the applicant did not do either of the things required by the condition, either as soon as practical or at all. I am satisfied that the applicant, by Mr Shaw, made a conscious choice not to comply with the condition. Equally I am satisfied that Mr Shaw on behalf of the applicant sought to hide the fact that the work had been undertaken on ZOE in breach of the condition of the stay.
13. The evidence of Mr Shaw was that he had been called to Western Australia to undertake the work on ZOE, had undertaken that work and returned to Dalby^[1]. It was not the case, as the applicant's submissions suggest^[2], that Mr Shaw was in Western Australia at the time. Some 13 pages of paperwork^[3] were generated by Mr Shaw or his co-worker. Mr Shaw signed numerous certifications for the work undertaken. The work was allocated a job number, 1331, which appears on many of the 13 pages. As a new job was commenced it was allocated the next consecutive number in a job register^[4] which records, in addition to the job number, a date, aircraft registration details, type of aircraft, type of job and a description of the work undertaken. For reasons that Mr Shaw was unable to explain adequately or convincingly, no details of the work are recorded on page 24 of the register in the line dedicated to job number 1331. He claimed to have forgotten^[5] to do so but could offer no reason for this oversight. Moreover, in the month or so thereafter details of another 13 jobs, numbers 1332 to 1344, were noted on page 24 without Mr Shaw or anyone else noticing the complete absence of any details recorded of job 1331. I have no hesitation in concluding that Mr Shaw made a conscious choice to avoid recording the details of job 1331 in the job register to try to keep from the respondent knowledge that work was undertaken on ZOE in Western Australia and to keep from the respondent more generally that work had been performed at a temporary location.
14. Mr Shaw accepted that he had been aware at the time that the applicant was breaching the condition of the stay by not providing the work pack to the respondent. He claimed that he had overlooked the obligation to do so because ZOE was subsequently damaged yet that incident occurred some four weeks later. As the respondent’s submissions pointed out, there were many occasions when Mr Shaw would, and should, have been prompted to comply with the condition of the stay. I reject the submission advanced on behalf of the applicant that the failure was “a genuine oversight”. It was a deliberate choice. And I reject the applicant’s submission^[6] that Mr Shaw has “learned from past deficiencies”. This conduct demonstrates that he has learned nothing.
15. The respondent’s power under reg 269 of the Civil Aviation Regulations to vary, suspend or cancel an approval, authority, certificate or licence (collectively called “the authorisation”) is enlivened where the respondent, and this Tribunal in its stead, is satisfied,

(d) that the holder of the authorisation is not a fit and proper person to have the responsibilities and exercise and perform the functions and duties of a holder of such an authorisation

The holder of a certificate of approval or licence must have an appreciation of the responsibilities of that office and must discharge them. In Re Taylor and Department of Transport^[7] the Tribunal considered reg 258 of the Air Navigation Regulations, the statutory precursor to reg 269 of the Civil Aviation Regulations and relevantly identical to it. The Tribunal said^[8],

In the context of reg 258(1)(d), the enquiry whether the applicant is a ‘fit and proper person’ is directly focused upon the fitness and the propriety of the applicant exercising the ‘responsibilities’ and performing the ‘functions’ and ‘duties’ of the holder of a licence – in this case a commercial pilot licence. It is not simply a question of competence to fly an aircraft which the Secretary must consider for this purpose.
In our view, what the regulation requires is a consideration of the applicant's conduct measured against the responsibilities, functions and duties of the holder of a commercial pilot licence as they emerge from the provisions of the Air Navigation Regulations. Whilst it would be inappropriate to endeavour to catalogue those responsibilities, functions and duties in any exhaustive fashion, it is clear that they include observing the interests of the safety of air navigation – not only the interests of pilots, passengers and the owners of aircraft, but also the interests of the public at large.

16. In my view the conduct of Mr Shaw on this occasion demonstrates that the applicant is not a fit and proper person. I am satisfied that he set out to deliberately avoid the obligation imposed by the stay condition. The obligation which was imposed by the stay condition was not onerous and it had been agreed to by the applicant. He concealed the failure to comply with the stay condition by deliberately not making appropriate entries in the job register. That conduct demonstrates that cancellation is the only appropriate regulatory response to the conclusion that the applicant is not a fit and proper person. In this regard (and in many other ways that I have found it unnecessary to record) Mr Shaw has demonstrated that he is either unwilling or unable to abide by the rules, that is, the duties of the holder of a certificate of approval. The rules that approval holders are expected to obey have been designed to protect aviation safety. Here, the conditions of the stay were agreed between the parties, and approved by the Tribunal, as reflecting a proper balance between a concern that the applicant might be forced out of business if the decision were not stayed pending a hearing and a concern that the respondent’s findings on the audit revealed matters that were very troubling. It is not open to the holder of an approval to choose not to obey the rules. Were that to become the norm aviation safety would be put at considerable risk.
17. It follows that the decision under review ought be affirmed. I propose to provide a short period within which the applicant may wind up its business so as not to inconvenience third parties. To that end I will specify that the decision will come into operation on Friday, 18 October 2013. I will continue the existing stay until that time.

...................[Sgd].....................................................
Associate

Dated 11 October 2013

^[1] Transcript page 895, lines 1 – 15.

^[2] Submissions, 27 August 2013, at paragraph 448; submissions in reply, 6 September 2013, at paragraph 172.

^[3] Exhibit 62.

^[4] Exhibit 63.

^[5] Transcript page 896, line 36.

^[6] Submissions, 27 August 2013, at paragraph 514.

^[7] (1978) 1 ALD 312.

^[8] At 321.