FEDERAL COURT OF AUSTRALIA

Civil Aviation Safety Authority v Allan [2001] FCA 1064

ADMINISTRATIVE LAW – Administrative Appeals Tribunal – power of Tribunal to set aside a decision and make a decision in substitution for the decision set aside, or remit a matter for reconsideration in accordance with directions or recommendations

WORDS AND PHRASES – “decision”

Administrative Appeals Tribunal Act 1975 (Cth) ss 3(3), 43(1)(c)

Civil Aviation Act 1988 s 28(1)

Minister for Immigration & Multicultural Affairs v Perth City Mission [2000] FCA 397 referred to

Ricegrowers Co-operative Mills Ltd v Bannerman (1981) 38 ALR 535 referred to

Attorney-General (Cth) v Queensland (1990) 25 FCR 125 referred to

Semunigus v Minister for Immigration & Multicultural Affairs (2000) 96 FCR 533 referred to

Glasson v Parkes Rural Distributions Pty Ltd (1984) 155 CLR 234 referred to

CIVIL AVIATION SAFETY AUTHORITY v MARK ALLAN

N 1201 OF 2000

MOORE J

9 AUGUST 2001

SYDNEY

THE COURT ORDERS THAT:

1.      The application be dismissed.

2.      No order as to costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

Introduction

1                     This is an appeal on a question of law by the Civil Aviation Safety Authority (“CASA”) against a decision of the Administrative Appeals Tribunal (“the Tribunal”) of 25 October 2000.  The Tribunal’s decision was:

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

2                     The primary decision under review by the Tribunal was a decision of a delegate of CASA not to issue Mr Mark Allan (“the respondent”) with an Air Operator’s Certificate (“AOC”) under s 28(1) of the Civil Aviation Act 1988 (Cth) (“CA Act”).

3                     CASA contends in this appeal that the Tribunal erred in law in giving the direction to CASA.  CASA relies on two grounds.  First, the direction was not one the Tribunal had power to make under s 43(1)(c) of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”).  CASA submits that the Tribunal was empowered to make a decision in substitution for the decision set aside, or to remit the matter to CASA for reconsideration in accordance with directions or recommendations of the Tribunal, but not to direct CASA to issue the respondent with an AOC.  Secondly, the direction given by the Tribunal would require CASA to contravene s 28(1) of the CA Act, which obliges CASA to be satisfied of certain matters before issuing an AOC.  CASA does not put in issue the decision of the Tribunal in so far as it set aside the decision of the delegate of CASA.

The relevant legislation

4                     Section 43(1) of the AAT Act provides:

“For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing:

(a)   …

(b)   …

(c)    setting aside the decision under review and:

(i)                 making a decision in substitution for the decision so set aside; or

(ii)               remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal.”

5                     Also relevant is s 3(3) which effectively defines what is a "decision" for the purposes of the AAT Act.  That sub-section provides:

“A reference in this Act to a decision includes a reference to:

(a) …

(b) giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission;

(c) issuing, suspending, revoking or refusing to issue a licence, authority or other instrument;

…”

6                     Section 28 of the CA Act relevantly provides:

“(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 licences 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).

(3)   …”

7                     "AOC" is defined in s 3 as "… an Air Operator's Certificate issued under Division 2 of Part III".

The decision of the Tribunal

8                     To understand why the decision of the Tribunal was in the terms it was, it is necessary to refer to events leading to the commencement of proceedings in the Tribunal, and to the Tribunal’s reasons for decision.

9                     The respondent applied for the issue of an AOC on 31 August 2000.  He had previously been issued with an AOC on 29 November 1999, which was due to expire at the end of September 2000.  He was carrying on business as “Jackaroo Aviation”.  I should note that the application which was completed by the respondent in August 2000 was styled “application for re-issue of air operations certificate” (emphasis added) and that CASA, in subsequent correspondence, and the Tribunal in its reasons, referred to the “re-issue” or “renewal” of the applicant’s AOC.  However, nothing turns in these proceedings on the language used.  It is clear that the respondent’s application for an AOC fell for determination under s 28 of the CA Act, which speaks of the “issue” of an AOC.

10                  In its reasons for decision, the Tribunal commenced by considering the way in which CASA dealt with the respondent’s application for an AOC.  It would appear that CASA had earlier carried out an audit of the respondent’s operations on 8 and 9 August 2000.  It would also appear that there was some correspondence between CASA and the respondent during September 2000, which it is not necessary to detail.  However, on 28 September 2000, CASA faxed the respondent a letter inviting the respondent to show cause why the author of the letter should not recommend to the delegate of CASA that the respondent not be issued with an AOC (“the show cause letter”).  The letter set out a number of “facts and circumstances” of concern to CASA.  The letter invited a response from the respondent by 12.00 noon the following day (29 September 2000).  No response was received by CASA, and on the afternoon of 29 September 2000, the delegate decided not to issue the respondent with an AOC, and informed the respondent of his decision by fax.  The respondent sought review of the decision by the Tribunal on 4 October 2000.  The Tribunal refused to grant a stay of the decision of the CASA delegate, and the matter was brought on for urgent hearing on 18 and 19 October 2000.

11                  In its reasons, and after commenting on the manner in which CASA dealt with the application, the Tribunal proceeded to consider each of the “facts and circumstances” set out by CASA in its show cause letter.  After making findings about these “facts and circumstances”, the Tribunal then noted (at [40]) that “the tests to be applied in determining whether an AOC should be issued are set out in section 28 [of the CA Act]”.  The Tribunal continued (at [41] to [44]):

“No real challenge has been brought against the applicant in relation to any of the sub-paragraphs in paragraph (b) [of s 28(1)] 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.

In relation to paragraph (a) [of s 28(1)], 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.

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.

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.”

The grounds of review

12                  As noted earlier, CASA relies on two grounds in this appeal.  The first ground is that the Tribunal did not have the power under s 43(1)(c) of the AAT Act to make the decision it did.  CASA submits the Tribunal either should have made a decision in substitution for the decision of the CASA delegate, or, if it was not in a position to make such a decision, should have remitted the matter to CASA for reconsideration in accordance with directions or recommendations of the Tribunal.

13                  Reference was made to the judgment of Lee J in Minister for Immigration & Multicultural Affairs v Perth City Mission [2000] FCA 397.  In that matter, the second respondents were refused visas by a delegate of the Minister for Immigration and Multicultural Affairs on the ground that they were not of good character.  The Tribunal found that the respondents were not of good character, but concluded that the decision-maker “should exercise its general discretion [under s 501 of the Migration Act 1958 (Cth)] not to refuse [the second respondents] visas on the basis of their bad characters”.  The formal decision of the Tribunal was that the decision under review was set aside and the matter remitted to the Minister “with a direction that [the second respondents] not be refused visas on the basis of their bad characters.”

14                  Lee J referred to the powers of the Tribunal under s 43(1) of the AAT Act and concluded (at [23] to [26]):

“The Tribunal made a decision in substitution for the decision set aside. The reasons of the Tribunal show that upon being satisfied that neither Mr Powell nor Mrs Powell was a person of good character, within the meaning of that term as used in s 501, the Tribunal proceeded to determine that “it should exercise its general discretion not to refuse them visas on the basis of their bad characters”. The recorded decision, however, purported to remit the matter for a decision to be made in terms directed by the Tribunal. That was not a course able to be followed pursuant to the AAT Act. Having exercised the discretion the formal determination of the Tribunal had to express the decision the Tribunal had made. The power of the Tribunal to set aside a decision and remit the matter for reconsideration only arises where the Tribunal is unable to make, and has not made, a decision in substitution for the decision set aside. (See:  Commonwealth of Australia  v Beale (1993) 30 ALD 68 per Neaves J at 70.) Section 43(1)(c)(ii) is directed to a circumstance where the decision under the enactment has not been made where the Tribunal is of the view that it is unable to make the decision required by the enactment, for example, where a requirement or condition must be satisfied before a decision can be made. (See:  Re SLE Medical Pty Ltd and Industry Research and Development Board (1988) 10 AAR 13.) The terms of s 43(1)(c)(ii) of the AAT Act enable the Tribunal to assist the decision-maker to whom the matter is returned by offering “directions or recommendations” that appear to be appropriate on the material before the Tribunal. Whether such “directions or recommendations” can fetter the exercise of a power vested in the person to whom the matter is remitted for determination under an enactment is unnecessary to consider. (See:  Flick Federal Administrative Law 2^nd ed. 1984 at [1419].)

In this case the Tribunal concluded that the discretion available under s 501 was not to be exercised against Mr and Mrs Powell. No decision-making power was left to the Minister under s 501. The Tribunal had exhausted it.

The terms in which the formal determination of the Tribunal was expressed may have suggested that the Tribunal had in mind that the application of other provisions of the Act and Regulations prescribing criteria for the grant of the visas applied for by Mr and Mrs Powell had to be determined. No decision in respect of those provisions was before the Tribunal. The only matter before the Tribunal was whether a decision should be made under s 501 of the Act to refuse the grant of a visa.

It follows that the decision of the Tribunal must be varied to provide that there is substituted for the decision set aside a decision that neither Mr Powell nor Mrs Powell be refused a visa under s 501.”

15                  The second ground raised by CASA is that by directing CASA to issue an AOC, the Tribunal’s decision compels CASA to contravene s 28 of the CA Act, which requires CASA to satisfy itself of specified matters before issuing an AOC.

Conclusions

16                  I am satisfied that the submission made by CASA in support of its first ground is correct.  Section 43 of the AAT Act confers various powers on the Tribunal when reviewing a decision.  Paragraph (c) of s 43(1) empowers the Tribunal to set aside the decision under review and do one of two things.  The first is to make a decision in substitution for the decision which is set aside.  This involves the Tribunal exercising and exhausting the powers of the primary decision maker.  Alternatively the Tribunal can remit the matter for reconsideration to the primary decision maker and, in so doing, may give the primary decision maker a direction or make a recommendation to reflect conclusions the Tribunal had reached about the matter falling for decision.  However the Tribunal may only follow this latter course when it is “remitting the matter for reconsideration” which plainly contemplates that the primary decision maker will again exercise the power authorising the making of the decision.  While a direction or recommendation may tend to circumscribe the way the primary decision maker is to exercise that power and decide the matter, sub-par (ii) contemplates that there will be some residual function to be performed by the primary decision maker involving the exercise of the relevant statutory power.  That is, the Tribunal would not itself have exercised and exhausted the decision making power.

17                  In this matter it is necessary to identify with some precision what was the decision of the primary decision maker, CASA, and what decision the Tribunal might make in substitution of that decision.  It is settled law that a decision is, for present purposes, something more than thought, consideration or conclusion.  It must be manifested in some way which emanates from an authoritative or responsible source:  see e.g. Ricegrowers Co-operative Mills Ltd v Bannerman (1981) 38 ALR 535 at 543-546, Attorney-General (Cth) v Queensland (1990) 25 FCR 125 at 142 and Semunigus v Minister for Immigration & Multicultural Affairs (2000) 96 FCR 533 at 542.  The decision made by CASA under s 28(1) was a decision not to (or to refuse to) issue an AOC.  This characterisation of the decision is conformable with the definition of decision in s 3 of the AAT Act and the authorities to which I have just referred.  If CASA had been satisfied that an AOC should issue then the decision it would have made would have been the decision manifested by the giving or issuing of the certificate.  Again this characterisation is conformable both with the definition and authority: see e.g. Glasson v Parkes Rural Distributions Pty Ltd (1984) 155 CLR 234 at 236. In a review of a decision not to (or to refuse to) issue an AOC, the Tribunal can affirm that decision if the Tribunal concludes that was the correct decision.  However, in a review of a decision not to (or to refuse to) issue an AOC, the Tribunal may conclude that the decision of the primary decision maker, CASA, was not the correct decision.  One course the Tribunal might adopt in that circumstance would be to make the decision itself.  If so, the decision would be manifested by the Tribunal giving or issuing the AOC.  Another course would be for the Tribunal to remit the matter to the primary decision maker, CASA, if the Tribunal considered that there were matters arising under s 28 requiring further consideration by the primary decision maker.

18                  In the present case, in my opinion, what the Tribunal did was, effectively, to make a decision which involved an impermissible melding of the powers conferred by s 43(1)(c).  It purported to make a decision in substitution for the decision of CASA but did not manifest that decision by issuing the AOC itself.  Rather it issued a direction to CASA to manifest the decision it had made by requiring CASA to issue the AOC.  In so doing, the Tribunal was not calling on CASA to reconsider the matter in any respect but simply directing it to perfect the decision made by the Tribunal.  This course is not authorised by s 43.  On one view, the course taken by the Tribunal was unexceptionable (in a practical sense) and the stance taken by CASA might be thought to be unduly technical.  However CASA has informed the Court that apart from the matters raised in the proceedings before the Tribunal, there were other matters that may have led it to refuse to grant the respondent an AOC though it should be emphasized that these matters were not drawn to the Tribunal’s attention.

19                  This leads to a consideration of what orders should be made in this appeal.  There is evidence before the Court that after the Tribunal made its decision, CASA issued an AOC to the respondent on 28 October 2000 in the sense that it prepared a document which, on its face, was a certificate and provided it to the respondent. However the certificate was not signed by an officer of CASA.  Appended to the certificate was a copy of the decision of the Tribunal.  The certificate was expressed to expire on 26 April 2001.  The precise legal status of this instrument is unclear.  There appears to be no legislative requirement that an AOC be signed and it is probable that the document issued by CASA was an AOC for the purposes of the CA Act.  The respondent took no active part in the final hearing in these proceedings other than to make a brief written submission after the hearing to the effect that while his AOC was renewed on 26 April 2001 for a further twelve months, he no longer operated an aviation business.  Accordingly, I did not have the benefit of any submissions from the respondent about what orders should be made.  Indeed I did not have the benefit of any submissions of a person or party acting as a contradictor to the case put by CASA.  It seems to me that the preferable course is to refrain from taking any steps in this appeal that may disturb the situation created by the issue of the AOC by CASA following the decision of the Tribunal.  CASA did not oppose this course.  I propose to dismiss the application and make no order as to costs.

Associate:

Dated:              9 August 2001