Mark Allan trading as Jackaroo Aviation and Civil Aviation Authority [2000] AATA 929 (25 October 2000)

Last Updated: 5 December 2000

DECISION AND REASONS FOR DECISION [2000] AATA 929

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2000/1567

GENERAL ADMINISTRATIVE DIVISION )

Re MARK ALLAN TRADING AS JACKAROO AVIATION

Applicant

And CIVIL AVIATION SAFETY AUTHORITY

Respondent

DECISION

Tribunal Mr B.J. McMahon (Deputy President)

Date 25 October 2000

Place Sydney

Decision The decision under review is set aside and the matter is remitted to the respondent with a direction that an Air Operator's Certificate for relevant purposes be issued to the applicant for a period of six months.

(Sgd) BJ McMahon

..............................................

Deputy President

CATCHWORDS

CIVIL AVIATION - refusal to renew an Air Operator's Certificate - no major issues of safety - breaches alleged by CASA regarding procedures and practices - applicant capable of complying with regulatory provisions - Certificate issued for a limited period.

Civil Aviation Act 1988 - ss 9A, 18, 28

Civil Aviation Orders

Civil Aviation Regulations

REASONS FOR DECISION

25 October 2000 Mr B.J. McMahon (Deputy President)

1. This is an application to review a decision by a delegate made on 29 September 2000 refusing to re-issue an Air Operator's Certificate (AOC) to the applicant.

2. On the day prior to that decision, a letter was sent by fax to the applicant inviting him to show cause why the author (Mr Slaughter, the area manager) should not recommend to the delegate that the AOC should not be renewed. There was no evidence as to the time of day when the letter was sent by fax to the applicant. In its terms, however, it required him to respond prior to 12 noon on the following day, Friday, 29 September 2000. In the absence of any response, the reviewable decision was made less than four hours after the expiry of the time set in the show cause notice.

3. One might think that such an urgent timeframe pointed to extraordinary threats to safety which required immediate attention. This was not the case, as the respondent's witness agreed in giving evidence. The applicant was the holder of an AOC which expired (as it stated on the face of the document) "at the end of September 2000". The show cause notice was timed to expire less than 24 hours after it was given, solely because a decision had to be made whether the AOC would be renewed. The facts upon which the show cause notice was principally based were disclosed in an audit which took place on 8 and 9 August, some eight weeks previously. It had taken all this time for the respondent to record the results of that audit and to formulate the show cause notice. No prior notice was given to the applicant of the respondent's intention not to re-issue the AOC.

4. Accordingly, from the commencement of October 2000, the applicant was not permitted to carry on his business. An application for review was made to this Tribunal on 4 October. An application for stay of the reviewable decision was refused by another member of this Tribunal but arrangements were made to have this matter brought on for an urgent hearing. This took place on 18 and 19 October.

5. It is relevant to consider the reasons for the delay on the part of the respondent. Mr Crawford has been employed in his present position by the respondent only since 1997. He has been in his present area only since early this year. He does, however, have a long and wide background in commercial aviation. Not knowing the AOC operators in his area, it was decided that the regular audit should be conducted by Mr Crawford in conjunction with the outgoing inspector, Mr Demarco. Mr Crawford was, however, to be the principal auditor.

6. From the middle of this year, audit inspection techniques had been changed. Previously, inspectors had a checklist which enabled them to report promptly after the audit. The new system involved meetings at the commencement and end of the audit and ongoing discussions which meant that the report would need to be written up at a later date. As there were two inspectors in this case, agreement was necessary between the two of them before the report could be finalised.

7. After giving prior notice, Mr Crawford and Mr Demarco arrived at the applicant's principal office in Cessnock on 8 August. They had an initial meeting and discussed areas in which they were interested. By prior arrangement, some of the documents had been sent from the applicant's principal place of business at Mount Isa to Cessnock so that the inspectors could look at them. Mr Crawford made notes of his findings during the course of his inspection and these are reproduced in the T documents. This was his first audit using the new method. The exit meeting (or conclusion of the audit) took place at 2pm on the second day. Although Mr Allan was under the impression that Mr Crawford had assured him nothing would arise from the audit, Mr Crawford denies this. It would seem unlikely that any assurance could have been given at that stage.

8. By 7 September (almost a month after the audit) the results had not been recorded and Mr Crawford said that he expressed his concern to his supervisor about this delay. On 15 September he heard that his father was ill and decided to be with him in Tasmania. His father died on 17 September. Mr Crawford was then on bereavement leave for a further week.

9. He returned to work on 25 September and again contacted his team leader saying that the audit report should be completed. He found that no action had been taken as his team leader himself had been on leave. His acting team leader merely asked Mr Crawford for his final recommendations.

10. Having considered the matter and having thought that there was an untrue statement relating to a command instrument rating in the applicant's application to renew the AOC, Mr Crawford decided that he could not recommend the renewal. He drafted the show cause letter about 25 September and sent it to his team leader and to a legal officer to be finalised.

11. Between 9 August, when the audit was completed, and 25 September, when the show cause letter was drafted, he had been in touch with Mr Allan on a number of matters. There had been a change of premises which needed to be recorded. There was the ongoing matter of the applicant's lack of a command instrument rating (to which I will return), but there was nothing of any urgency which was discussed between them. Certainly, Mr Crawford agrees that he gave Mr Allan no notice of his intended recommendation. He said that this was because of legal advice he had received.

12. Mr Crawford agreed that the urgency of the final flurry of letters arose only because of this delay. There was nothing raised in the show cause letter which would have motivated him to recommend suspension of an existing AOC. There was no "heavy safety issue" as he put it, or anything that was "dangerous or problematical that would require urgent attention".

13. He had indicated at the audit that he would issue certain notices requiring work to be done and other notices called observations to which a response was not compulsory. These documents were not issued until the day before the show cause letter and were of such a non-urgent nature that they allowed ten days for compliance. This date occurred after the expiry of the show cause notice and after the reviewable decision.

14. A number of consequences flow from this irregular procedure. Some of them will no doubt concern the respondent in its own internal management arrangements. These are outside the terms of my review.

15. The principal conclusion to be drawn from the respondent's delay is that, assuming it acted in accordance with its statutory obligations under section 9A of the Civil Aviation Act 1988, requiring it to regard the safety of air navigation as the most important consideration, there was nothing raised in the show cause notice that raised major issues of safety.

16. The second consequence is that the applicant has had little time to prepare his case. I will reproduce the show cause letter. It is sometimes difficult to read because the authors have concentrated more on documenting regulatory provisions rather then on giving particulars of facts upon which each of the alleged breaches is based. It was virtually not until the hearing that the applicant was able to understand some of the allegations. I have therefore made allowance for the difficulties inevitably experienced in putting forward appropriate evidence. A further consequence is that it has been necessary to prepare this decision urgently without the benefit of extensive evidence.

17. The third major consequence of this irregular procedure, therefore, is that because the applicant has had no real opportunity to defend himself, that opportunity should be afforded and should be exercised in a more structured and ordered manner. This will be reflected in my decision.

18. The show cause letter is long and (as I have said) difficult to read in parts. Nevertheless, as it has formed the agenda for this hearing and served as a statement of the reasons why the respondent was not satisfied about certain matters as it is required to be satisfied under subsection 28(1)(a) and (b) of the Civil Aviation Act 1988 (the Act), it will be useful to reproduce its terms:

"Notice of Proposed Refusal to Renew AOC

I am writing to give you notice that I am considering recommending to the delegate that the Air Operator's Certificate (AOC) No 191415-12 issued to Mark Gregory Allan trading as Jackaroo Aviation (Jackaroo) not be renewed on 1^st October 2000 on the basis of the facts and circumstance described below.

FACTS AND CIRCUMSTANCES

The facts and circumstances are as follows:

1. Jackaroo is, and at all times mentioned in this notice, was the holder of Air Operators Certificate number 191415-11 authorising charter and aerial work operations in the aircraft specified in this certificate.

2. AOC number 191415-11 has effect subject to a number of conditions, one of which is that Jackaroo must comply with all the requirements of the Act, the Civil Aviation Regulations and the Civil Aviation Orders that apply to Jackaroo Aviation. Subsection 28BA(1) and section 18BD of the Act impose that condition.

3. A Safety Audit performed on Jackaroo which commenced on 8 August 2000 revealed that:

(a) Maintenance release PA5008 (VH BFQ) was over-run on 16/1/00 by approximately 2 hours on a ferry flight to maintenance base at Charters Towers Queensland piloted by M Laird ARN 538390. The operator and chief pilot permitted this flight to be undertaken knowing that the maintenance release provided insufficient hours to complete the flight. This is in contravention of CAR 133 (1)(d);

(b) Pilot P Saario was rostered in contravention of CAR 5.55 and CAO 48.1.1.12 on 31/3/00, 1/4/00 and 3/4/00 due to the fact that 28/3/00 was not a continuous rest period as required by CAO 48.1.1.12 as the pilot commenced duty prior to 0600 (at 0500) on 29/3/00;

(c) Pilot M Woodhouse was rostered in contravention of CAR 5.55 and CAO 48.1.1.12 on 1/6/00, 2/6/00 and 3/6/00 due to the fact that 28/5/00 was not a continuous rest period as required by CAO 48.1.1.12 as the pilot commenced duty prior to 0600 (0515) on 29/5/00;

(d) On Maintenance Release 289339 for aircraft registered number VH BFQ Airworthiness Directives RAD 43 and RAD 27 due on 8/5/00 and applicable to that aircraft were not complied with but the aircraft continued to operate after that date. This is a breach of CAR 43(9), CAR 44 and CAR 133 (1)(d);

(e) On Maintenance Release PAC799 for aircraft VH-BFQ neither of the two part 2 entries "engine is running rough" is dated thus omitting in each case a vital particular. These are breaches of CAR 50. In addition, the company operations manual specifies in section A.3.1 Part 2 that the defect entries shall be dated. Since this was not done in these two cases, a breach of CAR 215(9) has occurred in each case;

(f) On Maintenance Releases PAC799 (for aircraft VH-BFQ), 281156 (for aircraft VH-FVW), 281173 (for aircraft VH-RKJ), 296387 (for aircraft VH TDM) and PA4978 (for aircraft VH TDM) and PA4978 (for aircraft VH-RKJ), oil and filter change conditions on the maintenance releases are not shown as complied with and on Maintenance Release 310082 (VH TDM) "maintenance required" Item 1 is not shown as complied with. These conditions are imposed under CAR 43((). These failures to show compliance with the conditions are breaches of CAR 43 (11A)(c) and CAR 133 (1)(d);

(g) The retained operator copy of Maintenance Release 289343 was incomplete in that it did not contain Part 2 (DEFECTS) and the maintenance release copy for aircraft VH DYB operated for approx. 1 week in early April 2000 was not retained as required by CAO 82.1 Appendix 1 sect. 2.5(a);

(h) For pilot M Woodhouse (ARN 516758) the operator had retained no copy of the pilot's instructor rating in his pilot records. No pilot records could be found for Lachlan Barr, Grade 2 instructor, an employee of Jackaroo Aviation for a period of 4-6 months. These are breaches of CAO 82.0 Appendix 1 sect 2.2 (c) and CAO 82.1 Appendix 1 sect 2.3(a);

(i) Day VFR Syllabus competency based training achievement record (copy) was not retained by the operator on the student file of William Glass (ARN 143662) and no completion signature and dates were shown. This is a breach of CAO 82.0 Appendix 1 sect 2.2(f) and CAO 82.1 Appendix sect 2.4(d) by the chief pilot and operator respectively in that these training records are required to be properly and fully maintained;

(j) Pilot P Saario flight and duty records were incorrectly kept in that they indicated 14 days total duty times as cumulative instead of 14 days duty as stand alone. The recording was incorrect due to an incorrect computer program. This is a breach of CAR 216 and CAO 82.1 Appendix 1. Sect 2.3(b) by the operator in that he did not maintain and oversee a correct system.

(k) Pilot A Wightman's passenger manifest for VH RKJ on 8/3/00 was not signed and pilot B Jenkins on 3/3/j00 (VH BPZ) and again on 6/3/00 (VH RKJ) failed to list passenger names on passenger manifests. These are breaches of the required company operations manual procedures (sect A.4.1) and hence breaches of CAR 215(9) which requires adherence to the operations manual. These matters are also breaches of CAO 20.16.1.7 and CAO 82.1 Appendix sect 2.5(c) by the operator as he failed to ensure proper compilation of these passenger manifests;

(l) The operator and Chief Pilot/Chief Flying Instructor has not held a current multi-engine command instrument rating since February 1999. This is in breach of CAO 82.0 Appendix 1 sects 4.2 and 4.3 in that the Air Operator Certificate of the operator permits charter flights under the instrument flight rules and aerial work flying training for command instrument rating. The chief pilot however does not hold "appropriate endorsements and rating to permit him or her to act as pilot in command of all operations authorised by the operator's certificate"; and

(m) In a Jackaroo Aviation brochure obtained from a brochure board in the foyer of the Hunter Valley Motel, by the CASA flying operators inspectors in Cessnock on 8^th and 9^th August 2000 for the operator's inspection, it was noted that Jackaroo Aviation offered "All weather 24 hours" aircraft charter which must by its nature include flights under the instrument flight rules. It was also noted that the same brochure offered "instrument rating training", neither of which the operator was clearly legally able to undertake due to the lack of the chief pilot/chief flying instructor's instrument rating since February 1999, see (l) above. It is CASA's contention that a breach of CAR 210 has thus occurred in that the operator no longer effectively held an Air Operators Certificate authorising those two types of operations mentioned above.

4. Since the safety audit carried out at Cessnock in August the following additional matters of concern to CASA have come to light:

(a) The operator appears to have made false declarations in sections 10 and 11 of his latest AOC application of 31/8/00. He certifies in 10 that "licences ratings and ... endorsements held by pilots employed by this organisation meet the pilot licensing requirements for the nature of operations to be covered by the AOC". This is untrue in that insofar as IFR charter and instrument rating training is concerned, he does not himself meet those requirements. The operator further certifies in 11 that all of the above information is true and correct. This matter has been drawn to the operator's attention without success. It is CASA's position that the operator has breached CAR 283 by these statements in his AOC application;

(b) The operator, as Certificate of Registration Holder, was required to conduct an investigation and submit a report under CAR 51(4) (a) and (b). This matter was not undertaken in a timely manner, took several reminders from CASA airworthiness, and was finally concluded after almost 5 months; and

(p) The operator in his response on 28^th February 2000 to a previous show cause issued by CASA on 21^st January 2000 indicated as part of his remedial actions an undertaking.

"6. The employment of an external safety officer at Mt Isa whose responsibilities include..."

In fact it became evident at audit that this officer (a business and human resources consultant) Mr Peter Scriven, the holder of a private pilot licence, is based not in Mt Isa but in Brisbane. This would appear to be at variance with the undertaking given and on which delegate at that time made his decision.

5. Sub-section 28BD requires the holder of an AOC to comply with all the requirements of the Civil Aviation Act, Regulations and Orders that apply to the holder.

6. Sub-section 28BE(1) requires the holder of an AOC to take reasonable steps at all times to ensure that every activity covered by the AOC, and everything done in connection with such an activity is done with a reasonable degree of care and diligence... (2) If the holder is a body having legal personality, each of its directors must also take steps specified in sub-section (1)... (3) It is evidence of a failure of a body and its directors to comply with this section if an act covered by this section is done without a reasonable degree of care and diligence mainly because of: (a) inadequate corporate management, control or supervision of the conduct of any of the body's directors, servants or agents: or (b) failure to provide adequate systems for communicating relevant information to relevant people in the body.

7. Sub-section 28BF(1) The holder of an AOC must at all times maintain an appropriate organisation, with a sufficient number of approximately qualified personnel and a sound and effective management structure, having regard to the nature of operations covered by the AOC... (2) The holder must establish and maintain any supervisory positions in the organisation, or in any training and checking organisation established as part of it, that CASA directs, having regard to the nature of operations covered by the AOC.

8. Further, on 21^st January 2000 a Show cause notice, a copy of which is attached, was issued against Jackaroo in relation to use an aircraft not authorized by the AOC (in breach of section 27) and for rostering pilots for duty time in excess of legally permissible limits (in breach of CAO 48.1). Notwithstanding that CASA was satisfied that the breaches outlined in that letter did occur, no action was taken on that occasion against Jackaroo as a result of that notice but CASA is entitled to take those facts into account in making its assessment under section 28 as to whether to issue or re-issue an AOC.

9. It is CASA's position that many of the breaches found above and in addition the breaches listed in the show cause letter sent to Jackaroo on 21/1/00 stem from a lack of supervision of the operator's employees which shows an ongoing lack of a sound and effective management structure. It is CASA's contention that a major cause of this serious lack is that the operator and chief pilot are based predominantly in Sydney and Cessnock in NSW whereas the vast majority of the operator's aircraft, staff and flying take place from Mt Isa in Queensland.

GROUNDS FOR REFUSAL TO RENEW

In accordance with section 28(1)(a) of the Civil Aviation Act 1988, CASA must issue an AOC if, and only if, it is satisfied that the applicant has complied with an is capable of complying with the provisions of the Act, the regulations and the Civil Aviation Orders that relate to safety. On the basis of the above facts and circumstances it is clear that Jackaroo has not complied with the Act, the Regulations or Orders relevant to the AOC. Further, I have doubts the operator can assure continued compliance with all the requirements of the Civil Aviation Act 1988, Civil Aviation Regulations and Civil Aviation Orders. Accordingly, on those facts, CASA can neither be satisfied that Jackaroo Aviation has complied with the Act, the Regulations and the Orders nor that it is capable of doing so.

SHOW CAUSE

I invite Jackaroo to provide me with written reasons, prior to 12:00 noon on Friday 29^th September 2000, why I should not recommend to the delegate that the AOC should not be renewed on the basis if the facts and circumstances set out above. In light of the short notice, I undertake that any submissions lodged will be given priority over other matters except emergencies requiring CASA immediate action.

OPTIONAL INFORMAL CONFERENCE

Enclosed with this letter is a sheet which provides information regarding an Informal Conference which will be arranged, should you request it, in relation to the matters set out in this letter.

You should be aware that CASA may review what is said in your written submissions and the record of what is said at any informal conference both as a part of the process of investigating whether any offence has been committed and when it is considering whether or not to recommend that any person be prosecuted for any offence.

Given this, you may wish to obtain independent legal advice as to whether you should accept the invitation to attend the informal conference and, if you do decide to attend, the sort of statements you should make to CASA during the conference. Please note the time limit of your response, should you wish to take part in such a conference, and ensure that the enclosed request form is completed and returned promptly."

19. I will now deal with the allegations in paragraphs 3, 4, 8, and 9 of the letter. Paragraph 3(a) relates to an incident which occurred on 16 January 2000. The aircraft was due for service by Mr Beahan, who customarily attended at the applicant's premises in Mt Isa. On that occasion, Mr Beahan found that he needed to do work which could not conveniently be done there and which required the aircraft to be flown to another maintenance base at Charters Towers. At that time, the previous maintenance release revealed that the aircraft had available insufficient hours to allow that flight. Permits may be given for such flights for maintenance purposes, but Mr Beahan did not apply for one. Instead, he arranged for another pilot who was not an employee either of Mr Beahan or of the applicant, to fly the aircraft to Charters Towers. It therefore overflew by approximately two hours.

20. This was not authorised or condoned by the applicant. He recognises that overflying is a breach of the regulation cited. His evidence was, however, was when he was made aware of what had happened he complained to Mr Beahan and has since terminated his arrangements with that service organisation. The system to which I will later refer will, Mr Allan says, ensure that such an event does not occur again.

21. Paragraphs (b) and (c) relate to two incidents when pilots appear to have been rostered for excess hours. Having regard to the number of hours flown by the organisation, some significance must be given to the fact that only two instances were cited. It was Mr Allan's evidence that both of the pilots had mistakenly signed on when they arrived at the premises, rather than when they commenced their duties. Tours of duty are defined in the Civil Aviation Orders to commence when a pilot undertakes duties associated with his employment. Thus a tour of duty would commence before takeoff while the pilot was receiving the weather or having a flight plan approved. On these particular occasions, both pilots arrived earlier than required on two different days because they chose to have breakfast at the airport. Mr Allan said that he made a practice of providing all the necessary food for breakfast as his pilots were young, unmarried men who appreciated the convenience. Neither Mr Saario nor Mr Woodhouse was called as a witness. This is an example of the evidentiary difficulties posed by the time framework within which these proceedings have been conducted. Nevertheless, I have no reason to doubt Mr Allan's word. All that Mr Crawford has was entries. It is a mistake to confuse paper with actual events in the absence of any corroborative evidence. I do not consider that a breach has been established under either of these paragraphs.

22. Paragraph (d) relates to two airworthiness directives. These relate to the operation of a mode C transponder in two aircraft. They were already fitted to the aircraft when Mr Allan acquired them. They are used only for operations in controlled airspace. Their function is to advise air traffic control through radar signals of the location of the aircraft. It was Mr Allan's evidence that the nearest controlled airspace was at Townsville, some five hours flight from Mt Isa and that the aircraft had not entered that controlled airspace while the transponders were unserviceable. To emphasise the fact to pilots, the instruments had been disconnected and placarded as "unserviceable and unconnected". Consequently, any pilots operating the aircraft would have been aware of this fact and would not have been able to operate in controlled airspace. In addition, there was a notice placed on the pilot's notice board and in the Jackaroo flight manual advising pilots of this fact.

23. It is true that the applicant is under an obligation to comply with directives of this kind. The applicant should either remove the instrument or comply with the directive. In assessing the breach, however, for the purposes of section 28, I consider that the remedial action which has been taken indicates a willingness to set in place a system where such a directive is either not necessary or will be complied with. Applying the overall criterion of safety, it cannot have been of great concern to the respondent as the radio airworthiness directives (RADs) were due to be complied with on 8 May 2000, but no action was taken between May and August, or September to see that this was done. The applicant pointed to the fact that placarding unserviceable equipment is provided for in his manual which had been approved generally by the respondent.

24. Paragraph (e) appears to relate to an incident which came and went within a short space of time. There is one defect only in the maintenance release (although an important defect). Mr Allan's evidence was that it came to the attention of the pilot on 13 March 2000. He cancelled the flight for that day and delivered the aircraft to a maintenance organisation to be rectified. The work was done and signed out by the maintenance organisation on that day. Again, a breach has occurred, but in the interests of safety, the situation has been rectified quickly as soon as it came to the notice of the relevant pilot.

25. The maintenance releases referred to in paragraph (f) show in schedule 1 the due date for oil and filter change. The complaint is that there is no signature after the due date to indicate that in fact the oil was changed on that date. The respondent has therefore assumed, that in the absence of a signature, the oil was not in fact changed. I accept Mr Allan's evidence to the contrary. This evidence was that within the premises, there is a large board with all relevant maintenance dates, including oil change dates, so that each day, each pilot is aware of the state of readiness of his aircraft. There is some dispute as to whether pilots are entitled to sign the maintenance release, even though they themselves carry out the oil change. For this reason, Mr Allan's practice is to have such entries made in the aircraft's log book. The respondent complained at the hearing that the log books had not been produced. Having regard to the rushed circumstances of this hearing, this can be readily forgiven. I have no reason to doubt Mr Allan's word that not only were the oil and filters changed at the recommended dates, they were changed far more frequently in order to preserve the engines of the aircraft.

26. Paragraph (g) arises (according to Mr Allan) from a misunderstanding by Mr Crawford. The audit took place at Cessnock. The relevant documents were at Mt Isa and needed to be faxed to Cessnock for the purpose of the audit. In fact there was a part 2 which was damaged in transit by fax. Mr Allan says (and I have no reason to disbelieve him) that the auditors were informed of this at the time. In fact there is a part 2 of maintenance release of 289343. A copy of the whole document was attached to Mr Allan's statement. This paragraph does not reveal any breach.

27. Again, no breach has been established under the first sentence of paragraph (h). The record of all licences and ratings held by Mr Woodhouse did in fact exist and were attached to Mr Allan's statement in these proceedings. Mr Barr had removed his complete file on his unexpected resignation and has refused to return it, notwithstanding numerous requests. This may constitute a breach of the regulatory provisions cited and may indicate that pilot records ought to be retained on a computer rather than in hard copy. However, in assessing the seriousness of the breach, I take account of Mr Allan's explanation.

28. Paragraph (i) relates to the records of a student. Again, a full copy of those records was attached to Mr Allan's statement and appeared to comply with the regulatory requirements.

29. Paragraph (j) alleges that the flight and duty records of Mr Saario were incorrectly kept as specified. In fact, this allegation appears to have arisen from a misunderstanding and a misreading by the auditors of the relevant records. The misunderstanding may have come about because the 14 day break was indicated only by an asterisk. The recording was necessary by hand because of a failure in the computer program. I am satisfied on Mr Allan's evidence that the 14 days duty was recorded as stand alone. The confusion, however should be remedied in the future either by an appropriate computer program or by more clearly designed hard copy records. I am satisfied that Mr Allan has the capacity and will to do this.

30. Paragraph (k) relates to passenger manifests. The nature of the business carried on at Mt Isa means that often the names of particular passengers will not be known at the outset. If a pilot is directed to fly to a particular location and pick up, for example, an electrician and take him to some other location, he will not know the name of the proposed passenger until he boards. In that case, a provisional passenger manifest is made out, sometimes listing the passenger's name as TBA (to be advised). This is left with the office. Mr Allan's evidence was that a complete manifest was prepared when the names of all passengers were known and a completed copy was left. This may not be a complete compliance with the relevant Civil Aviation Order. The procedure adopted in advising the names of proposed passengers may need to be improved. Again, having regard to the overall demands of safety, I consider that the two incidents listed in this paragraph, relating to two of the many charter flights which the applicant's operation carries out, are matters indicating desirable changes to the system but in themselves without further details are not of major importance.

31. The matters alleged in paragraph (l) concerned Mr Crawford to such an extent that they probably precipitated his final recommendations. Mr Allan is the operator, the chief pilot and the chief flying instructor. He had a multi-engine command instrument rating which expired by effluxion of time in February 1999. Mr Allan's evidence was that the respondent had been advised of this fact and, in the circumstances, had not objected. There was no time to confirm this conversation through other evidence but I have no reason to doubt Mr Allan's word. The circumstances were that such a rating is necessary only if an operation undertakes flights controlled by instruments (IFR operations) in poor visibility or other adverse weather conditions. It rarely rains in Mt Isa and Mr Allan's evidence was that his organisation did not undertake such flights. It was the respondent's allegation that the rating was necessary to permit the chief pilot to act in all operations authorised by the operator's certificate. Although schedule 2 to that certificate sets out the aerial work purposes covered by the AOC in some detail, it does not, in its own terms, refer to IFR operations.

32. Because Mr Crawford had been in contact with Mr Allan since the audit concerning this matter, Mr Allan decided in any event to renew the rating. He made arrangements with Mudgee Aviation Services on 1 October 1999 for this purpose. Because of the refusal to renew his AOC, the booking was temporarily cancelled. The rating was renewed on 15 October 2000 and evidence of this fact was attached to Mr Allan's statement. Mr Crawford's concern that Mr Allan's statement in his application for renewal of his AOC that he was qualified in all relevant areas may not have been warranted. It certainly would not be sufficient to support an allegation of a false declaration referred to in paragraph 4(a) of the show cause letter. Having regard to the nature of the operations to be covered by the AOC, the statement made by Mr Allan is quite correct. However, to remove any doubt, the rating has been renewed and can now no longer be a matter for concern.

33. Reference was made in paragraph (m) to a brochure which was printed some three years ago and delivered to a number of outlets in Cessnock. The brochure has since been withdrawn and evidence to that effect was produced to me. As the evidence was that IFR operations were not undertaken (contrary to the statements made in the brochure) and as I accept this evidence, I cannot see that the mere existence of an outdated brochure can amount to a breach of the regulatory provisions. It is desirable, however, to remove any possible misunderstanding that all copies of this brochure be destroyed or amended.

34. Paragraph 4(b) is not particularised but appears to relate to the crash of aircraft VH-RYU. Mr Allan's evidence was that the aircraft came down in rough country, necessitating removal over a period. The accident was investigated by the Bureau of Air Safety Investigations, who indicated that they did not wish to pursue the matter further. Mr Allan, as holder of the AOC was then asked to submit a report to CASA. The aircraft had been removed to Scone Aircraft Maintenance and was there for some months. The respondent was informed of this. As Mr Allan holds no engineering or maintenance qualifications, he was unable to advise the respondent as to the mechanical reasons for damage to the engine. Eventually, some indication was given by the maintenance company, and this was passed on to the respondent verbally. The written report followed as soon as details were made available by the maintenance organisation. The gravamen of CASA's complaint appears to be that its request was not attended to "in a timely manner". Having regard to the circumstances, I accept Mr Allan's evidence that it was attended to as soon as he was in a position to make an appropriate report.

35. Paragraph 4(p) (obviously intended to be 4(c)) refers to the appointment of an external safety officer. The thrust of the complaint appears to be that Mr Scriven is now no longer based in Mt Isa but in Brisbane. There does not appear to be any complaints about his qualifications or his work. He was chosen by Mr Allan particularly because he has no background in commercial aviation (although, of course, he is a qualified pilot) and because he is external to the organisation and would report directly to Mr Allan. Mr Scriven's duties are set out in a long document annexed to Mr Allan's statement. If all these duties are carried out satisfactorily (and there is no complaint about his performance) then it would appear that a good safety check system has been put in place. The difficulty is the location of Mr Scriven. When he undertook the job, he was a school principal in Mt Isa. He has since been moved to Brisbane. However, Mr Allan's evidence was that he arranges for Mr Scriven to visit Mt Isa regularly and has a standing discount arrangement with another carrier to ensure that regular visits are possible at a reasonable cost. Records are sent to Mr Scriven weekly and there is constant contact between the office staff and Mr Scriven. Relevant documents are sent to him regularly for scrutiny as to compliance with regulatory requirements. The fact that so few documents relative to the number of hours flown by the applicant is an indication of Mr Scriven's success in his job. In fact, he is presently on long service leave for 38 weeks. He continues to hold the position of school principal but is not attending Department of Education places of employment. He is presently contemplating his future. On the evidence put before me, the mere fact that Mr Scriven has been transferred from Mt Isa to Brisbane as noted in the show cause letter is no ground for complaint. There is no evidence that the auditors even interviewed Mr Scriven.

36. Paragraph 8 refers to an earlier show cause notice issued on 21 January 2000. It was partly in satisfaction of undertakings to the respondent that Mr Allan had previously appointed Mr Scriven. If that appointment was suitable at that time, it remains suitable at this time.

37. The thrust of paragraph 9 is to complain of the lack of a sound and effective management structure. Mr Allan received his commercial pilot's license in 1989 and presently has 7,000 hours. He commenced operating as Jackaroo Aviation on 23 August 1995. It has two operational bases. There are four aircraft based in Mt Isa and one at Cessnock. Mr Allan lives in Wahroonga in Sydney but attends Cessnock every day while he is in Sydney. One half of his time is spent at Mt Isa. Itinerary records were produced to substantiate this. They show that in 1998 he spent 201 days in Mt Isa, 207 days in the following year and 140 days in the year 2000 up to 29 September.

38. There is a chief base pilot (Mr Railton) who has been appointed full time to supervise the running of Mt Isa subject to Mr Allan's overall control. Mr Railton is not a young, unattached pilot (as Mr Allan says so many of them are). He is a man of mature years, full of experience and responsibility. There was evidence from Mr Allan of hands-on supervision of his pilots. There were, for example, several minutes tendered in evidence addressed to various pilots calling their attention to several errors alleged to have been made by them and requiring their response. These have all been given by Mr Allan as chief pilot. They indicate a close concern for ensuring that regulatory obligations are observed. After an earlier show cause notice in January 2000, this is not to be wondered at.

39. I accept that there is, in fact, a management structure which is as effective as one can reasonably expect. Everything, of course, can be improved and nobody can guarantee that mistakes will not be made. Nevertheless, on the brief evidence that has been put before me in the short time available, I am satisfied that there is the will and basis for sound management in the future. Certainly, pilots (most of whom are part-time) who have been detected in operational failures, however minor, have had their employment terminated. The fact that the applicant lives in Wahroonga, has his main base at Cessnock and has a remote base at Mt Isa is not unusual, according to the evidence. The nature of this type of work usually involves the setting up of remote bases. So long as a management structure is put in place to control them, there is no reason why this situation should not continue.

40. The tests to be applied in determining whether an AOC should be issued are set out in section 28, the relevant parts of which are as follows:

"28 CASA must issue AOC if satisfied about certain matters

(1) If a person applies to CASA for an AOC, CASA must issue the AOC if, and only if:

(a) CASA is satisfied that the applicant has complied with, or is capable of complying with, the provisions of this Act, the regulations and the Civil Aviation Orders, that relate to safety, including provisions about the competence of persons to do anything that would be covered by the AOC; and

(b) CASA is satisfied about the following matters in relation to the applicant's organisation:

(i) the organisation is suitable to ensure that the AOC operations can be conducted or carried out safely, having regard to the nature of the AOC operations;

(ii) the organisation's chain of command is appropriate to ensure that the AOC operations can be conducted or carried out safely;

(iii) the organisation has a sufficient number of suitably qualified and competent employees to conduct or carry out the AOC operations safely;

(iv) key personnel in the organisation have appropriate experience in air operations to conduct or to carry out the AOC operations safely;

(v) the facilities of the organisation are sufficient to enable the AOC operations to be conducted or carried out safely;

(vi) the organisation has suitable procedures and practices to control the organisation and ensure that the AOC operations can be conducted or carried out safely;

(vii) if CASA requires particulars of licences held by flight crew members of the organisation - the authorisations conferred by the licenses are appropriate, having regard to the nature of the AOC operations; and

(c) if the AOC sought would authorise the operation of a foreign registered aircraft on domestic commercial flights - CASA is also satisfied that the additional conditions in section 28A have been met.

(2) The financial position of the applicant is one of the matters that CASA may take into account in forming a view for the purposes of paragraph(1)(a)."

41. No real challenge has been brought against the applicant in relation to any of the sub-paragraphs in paragraph (b) except in relation to paragraph (vi). For reasons which I have given, I consider that the organisation of Jackaroo Aviation has suitable procedures and practices. Like all procedures and practices, however, they are susceptible of improvement.

42. In relation to paragraph (a), I am satisfied that there have been some relevant breaches as I have detailed. This, however, would not conclude the application. As an alternative, the decision maker is invited to be satisfied that the applicant is capable of complying with the regulatory provisions in the future, particularly those that relate to safety and competence of persons. In my view, that has been established. Once again, however, there will always be room for improvement.

43. I am concerned that a notice to show cause was served in January 2000 and that this is the second such notice. I am also concerned, however, that because of management delays on the part of the respondent, the applicant has not been given adequate notice of the matters that principally concern the regulator and has not been given an opportunity to attend to them. There is no statutory period prescribed for AOCs. I consider that the preferable decision in the present circumstances is to issue the certificate but for a limited period. In applying for renewal of the certificate in due course, the applicant will have an opportunity for satisfying the regulator that adequate systems are in place, and that all the other requirements of section 28 have been met. It is to be hoped that in considering the application for renewal, there will be an open, co-operative dialogue affording opportunities for complaint and timely responses.

44. Accordingly, the decision under review is set aside and the matter is remitted to the respondent with a direction that an Air Operator's Certificate for relevant purposes be issued to the applicant for a period of six months.

I certify that the 44 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B.J. McMahon (Deputy President)

Signed: .....................................................................................

Dominika Rajewski, Associate

Date/s of Hearing 18-19 October 2000

Date of Decision 25 October 2000

Representative for the Applicant Mr John Glynn

(John A Glynn & Associates)

Representative for the Respondent Mr Adam Anastasi (CASA)