FEDERAL COURT OF AUSTRALIA
Civil Aviation Safety Authority v Alligator Airways Pty Limited (No 3) [2012] FCA 601
VICTORIA DISTRICT REGISTRY |
|
GENERAL DIVISION |
VID 350 of 2012 |
BETWEEN: |
CIVIL AVIATION SAFETY AUTHORITY Applicant |
AND: |
ALLIGATOR AIRWAYS PTY LIMITED Respondent |
JUDGE: |
MURPHY J |
DATE: |
8 June 2012 |
PLACE: |
MELBOURNE |
REASONS FOR JUDGMENT
INTRODUCTION
1 I heard this matter over three days from 15 to 17 May 2012, receiving the parties’ final written submissions on 18 May 2012. On 18 May 2012 I made orders and provided short reasons for judgment, indicating that I would provide properly detailed reasons later. These are those reasons.
2 The applicant, the Civil Aviation Safety Authority (“CASA”), has the statutory function pursuant to the Civil Aviation Act 1988 (Cth) (“the Act”) of conducting the safety regulation of civil air operations in Australia.
3 The respondent, Alligator Airways Pty Ltd (“Alligator”), is a small general aviation business based at Kununurra in Western Australia which operates 16 light aircraft for sightseeing trips and charter during the tourist season, operating fewer aircraft during the off season. Its director, sole shareholder, Chief Executive Officer, and Chief Engineer or Licensed Aircraft Maintenance Engineer (“LAME”) is Mr Victor Robert Kendrick.
Background
4 On 3 May 2012 CASA suspended Alligator’s Air Operator’s Certificate (“AOC”) and Certificate of Approval (“COA”) with immediate effect pursuant to s 30DC of the Act (“the suspension notice”). Its delegate considered that he had reason to believe that Alligator had engaged in, was engaging in, or was likely to engage in, conduct that constituted, contributed to or resulted in a serious and imminent risk to air safety. Section 30DB of the Act prohibits the holder of a civil aviation authorisation (which includes both an AOC and a COA) from engaging in such conduct. Under the Act the suspension notice only operated for 5 business days unless an application was made to this Court for an order pursuant to s 30DE.
5 On 9 May 2012 CASA made an urgent application under s 30DE seeking an order that operated to prohibit Alligator for 40 days from doing anything that would otherwise be authorised by its AOC or its COA (“the prohibition order”). Under subs 30DE(2) of the Act, if the Court is satisfied that there are reasonable grounds to believe that the holder of a civil aviation authorisation has engaged in, is engaging in, or is likely to engage in conduct that constitutes, contributes to or results in a serious and imminent risk to air safety, the Court must make a prohibition order.
6 Under subs 30DE(4) the period of any prohibition order must be such period (of not more than 40 days) that the Court considers reasonable to allow CASA to complete an investigation into the circumstances that gave rise to CASA’s decision to suspend the authorisation. During the hearing, under pressure to advise as to the length of time necessary for an expeditious but appropriate investigation, CASA reduced the prohibition period it sought from 40 days to 10 business days from 18 May 2012.
7 CASA pointed to a series of issues over the period 2009 to April 2012 that were of concern to it in the operations of Alligator which included the maintenance and airworthiness of Alligator’s aircraft, the proficiency of its pilots, and its view that there was a systemic problem within Alligator in regard to such issues. It referred in particular to 7 key incidents between June 2010 and late April 2012. It described the last three incidents in April 2012 as the “straw that broke the camel’s back” leading, against the backdrop of the earlier matters, to the issue of the suspension notice and the application for the prohibition order. The three recent incidents are an engine failure of a Cessna aircraft on 14 April 2012 which required an unpowered emergency landing, a low-flying incident on 20 April 2012 which could have led to a mid-air collision with a helicopter, and the failure of a turbo-charger on takeoff on 28 April 2012 which also required an emergency landing.
8 Alligator admitted the occurrence of each of the seven incidents of concern, except for the low-flying incident. However, it described some of the mechanical failures as “one-off” or unexpected and pointed to others as arising from unforeseeable pilot error for which it says it is not responsible. It said that those pilots who made errors are no longer employed or have been “grounded” and accordingly there is no imminent risk to air safety. It argued that its safety and checking procedures, while deficient in the past, were significantly improved since July 2011 by the present Chief Pilot and that CASA had not established any systems failures to support its claim that there is a systemic safety problem within Alligator. It contended that there is no serious and imminent risk to air safety from its operations.
9 For the reasons I set out below, I am satisfied that there are reasonable grounds to believe that Alligator has engaged in, is engaging in, or is likely to engage in, conduct that constitutes, contributes to or results in a serious and imminent risk to air safety.
10 On 18 May 2012 I made the prohibition order sought by CASA for a period of 10 business days. The effect of the order is that Alligator is grounded from 4 May 2012 to 4 June 2012 so as to enable CASA to finish its investigation.
LEGISLATIVE FRAMEWORK
11 It is not controversial between the parties that Alligator’s AOC and its COA which CASA seeks to suspend fall within the expression “civil aviation authorisation”. “Civil aviation authorisation” is defined in s 3 of the Act as:
an authorisation under this Act or the regulations to undertake a particular activity (whether the authorisation is called an AOC, permission, authority, licence, certificate, rating or endorsement or is known by some other name).
12 Section 27 of the Act prevents the operation of an aircraft within, into or out of Australian territory unless the operation of that aircraft is authorised by an AOC. Alligator holds an AOC authorising it to conduct passenger carrying charter and aerial work operations in Australian territory in specified Australian registered aircraft.
13 Subregulation 42ZC(4) of the Civil Aviation Regulations 1988 requires that the maintenance on aircraft such as those operated by Alligator must only be carried out by the holder of a COA. Alligator holds a COA that authorises it to conduct maintenance of its aircraft.
14 Division 3A of the Act, which provides the framework relied on by CASA for its application, was inserted into the legislation by the Civil Aviation Amendment Act 2003 (Cth) (“the 2003 Act”). The effect of the earlier regulations were summarised in the Full Court decision of Civil Aviation Safety Authority v Boatman (2004) 138 FLR 384 (“Boatman 2004”) per Sundberg J at [9]. It suffices to note, as his Honour did in that case, that until the 2003 Act the Court had no role in relation to the variation, suspension or cancellation of an authorisation, CASA being the sole actor in that regard.
15 In the second reading speech introducing the bill that became the 2003 Act, the Minister said:
The bill also introduces new enforcement measures, which will provide CASA with a wider range of enforcement tools to better match the regulatory action to the seriousness of the breach. These measures will help to ensure that justice is not only done but seen to be done by providing a range of options for CASA to vary, suspend or cancel aviation authorisations such as licences and air operator’s certificates. This is consistent with a risk based approach to safety management ...
Very importantly, included in these enforcement tools will be a scheme to allow an automatic ‘stay’ of CASA’s final decision to vary, suspend or cancel an authorisation in cases other than a serious and imminent risk to air safety. The automatic stay will enhance fairness by reducing the time an authorisation holder is grounded while awaiting a review of CASA’s decision by the Administrative Appeals Tribunal.
The bill introduces the concept of a Federal Court exclusion order, where there is a serious and imminent risk to air safety. Under the new enforcement regime, CASA will retain the power to immediately suspend an authorisation where there is a serious and imminent risk to safety, but it will be required to apply to the Federal Court within five days of its decision for the court to adjudicate the suspension.
These new reforms address the perception in aviation circles that CASA is somehow judge, jury and executioner.
16 Subdivision B which comprises ss 30DB to 30DD is headed “Suspension for contravening the serious and imminent risk prohibition”. Section 30DB provides:
The holder of a civil aviation authorisation must not engage in conduct that constitutes, contributes to or results in a serious and imminent risk to air safety.
17 Section 30DC provides:
(1) Where CASA has reason to believe that the holder of a civil aviation authorisation has engaged in, is engaging in, or is likely to engage in, conduct that contravenes section 30DB, CASA may suspend the authorisation by giving written notice to the holder.
…
(3) The suspension ends at the end of the fifth business day after the day on which the holder was notified of the suspension, unless before that time CASA makes an application to the Federal Court under section 30DE.
Note: If CASA makes an application in time, the suspension continues in force until it comes to an end under the rules in section 30DJ.
It is under this provision that Alligator’s authorisations were initially suspended by CASA.
18 Subdivision C which comprises ss 30DE and 30DF is headed “Court order in relation to the serious and imminent risk prohibition”. Section 30DE provides:
(1) If CASA suspends a civil aviation authorisation under section 30DC, CASA may, before the end of the fifth business day after the day on which the holder of the authorisation was notified of the suspension, apply to the Federal Court for an order under this section.
(2) If the Federal Court is satisfied that there are reasonable grounds to believe that the holder has engaged in, is engaging in, or is likely to engage in, conduct that contravenes section 30DB, the Court must make an order that prohibits the holder from doing anything that is authorised by the authorisation but that, without the authorisation, would be unlawful.
(3) In deciding under subsection (2), the Federal Court must have regard to section 3A and subsection 9A(1).
(4) Subject to section 30DF, an order continues in force for the period determined by the Federal Court when making the order, being the period (not more than 40 days) that the Court considers reasonable to allow CASA to complete an investigation into the circumstances that gave rise to CASA’s decision to suspend the authorisation.
It is under this provision that CASA seeks a prohibition order against Alligator that operates until its investigation is complete. Under s 30DA the contravening conduct can be an act or omission.
19 Importantly, the Court is required by s 30DE(3) to have regard to ss 3A and 9A(1), which provide:
3A The main object of this Act is to establish a regulatory framework for maintaining, enhancing and promoting the safety of civil aviation, with particular emphasis on preventing aviation accidents and incidents.
…
9A(1) In exercising its powers and performing its functions, CASA must regard the safety of air navigation as the most important consideration.
20 Subdivision D which comprises ss 30DG to 30DJ, is headed “Investigation and further action by CASA”. Section 30DG provides:
If the Federal Court makes an order under section 30DE in relation to a civil aviation authorisation, CASA must, by the end of the period that the order is in force, complete an investigation into the circumstances that gave rise to CASA’s decision to suspend the authorisation under section 30DC.
21 Section 30DH provides:
(1) This section applies if, after CASA’s investigation under section 30DG:
(a) CASA has reason to believe that a serious and imminent risk to air safety would exist if the civil aviation authorisation were not varied, suspended or cancelled; and
(b) the grounds for CASA’s belief are related to the circumstances that gave rise to CASA’s decision to suspend the authorisation under section 30DC.
(2) CASA may, within 5 business days after the last day on which the order is in force:
(a) give the holder of the authorisation a show cause notice; and
(b) allow the holder to show cause, within such reasonable time as CASA specifies in the notice (not more than 28 days), why the authorisation should not be varied, suspended or cancelled.
This provision enables CASA to vary, suspend or cancel Alligator’s authorisations upon completion of its investigation, without recourse to the Court.
22 Section 30DI provides:
(1) This section applies if, after the end of the period specified in a show cause notice given under section 30DH:
(a) CASA is satisfied that a serious and imminent risk to air safety would exist if the civil aviation authorisation were not varied, suspended or cancelled; and
(b) the grounds for CASA’s belief are related to the circumstances that gave rise to CASA’s decision to suspend the authorisation under section 30DC.
(2) CASA may vary, suspend or cancel the authorisation, by written notice given to the holder of the authorisation within 5 business days after the end of the period specified in the show cause notice.
23 Section 30DJ provides:
If CASA suspends a civil aviation authorisation under section 30DC and applies to the Federal Court for an order under section 30DE, the suspension continues in force until the time worked out under the table (unless earlier revoked).
The table sets out various possible circumstances, which in the present case mean that Alligator’s authorisations remain suspended until five business days after 4 June 2012, unless CASA takes further action under s 30DH.
24 Section 97A(2) provides:
Any conduct engaged in on behalf of a body corporate by a director, servant or agent of the body corporate within the scope of his or her actual or apparent authority is to be taken, for the purposes of this Act or the regulations, to have been engaged in also by the body corporate unless the body corporate establishes that the body corporate took reasonable precautions and exercised due diligence to avoid the conduct.
This provision is of relevance because Alligator seeks to avoid responsibility for the actions of some of its pilots and maintenance employees.
RELEVANT LEGAL PRINCIPLES
25 The central question in the proceeding is whether I am satisfied that there are reasonable grounds to believe that Alligator has engaged in, is engaging in, or is likely to engage in, conduct that constitutes, contributes to or results in a serious and imminent risk to air safety.
26 Importantly, in considering this central question I am required by subs 30DE(3) to have regard to:
(a) s 3A of the Act with its particular emphasis on maintaining, and enhancing and promoting civil aviation safety, and preventing aviation accidents and incidents; and
(b) subs 9A(1) of the Act which requires CASA to regard the safety of air navigation as the most important consideration in exercising its powers and performing its functions.
27 In Civil Aviation Safety Authority v Boatman [2006] FCA 460 (“Boatman 2006”) at [17] Madgwick J considered, and I agree, that the judgement of the Court on the central issue involves three steps:
(a) a consideration of the meaning of “reasonable grounds to believe”;
(b) a consideration of the meaning of “serious and imminent risk to air safety”; and
(c) the application of these tests to the conduct of the respondent.
Reasonable grounds to believe
28 The requirement to establish reasonable grounds precludes the arbitrary exercise of many statutory powers. When a statute requires there must be “reasonable grounds” for belief it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person: George v Rockett (1990) 170 CLR 104 (“George v Rockett”) at 112. At 116 in that case the High Court explained:
The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture.
29 The Appeal Division of the Supreme Court of Victoria held in Loughnan v Magistrates Court of Victoria [1993] 1VR 685 (“Loughnan”) at 692, per Brooking, J.D. Phillips and Byrne JJ, that reasonable grounds to believe that a suspect had committed an offence meant that:
…the court is not required to be satisfied, even to some prima facie stage, that the suspect has committed the offence; the court need be satisfied only that there are reasonable grounds to believe that the suspect has committed the offence.
The Court also noted at 696:
That reasonable grounds exist for believing that the suspect has committed the offence is not necessarily inconsistent with the fact that other possibilities exist too, based upon further and different material.
30 It follows that it is possible for the Court to be satisfied that there are reasonable grounds to believe that there is a serious and imminent risk to air safety, without concluding that the risk is in fact present. As Madgwick J noted in Boatman 2006 at [25], in applying George v Rockett:
…the question is: regardless of whether or not there was in fact a serious and imminent risk to air safety, are reasonable grounds shown to the Court’s satisfaction to induce an actual belief that there was such a risk.
31 His Honour noted at [27], and I agree, that:
If the judge is moved by all the evidence to conclude that there was in fact such a risk, it will follow that there were reasonable grounds for that belief. If not, the judge must consider whether, nevertheless, there are, in the judge’s opinion, reasonable grounds for so believing.
32 This is consistent with the establishment of a regulatory regime that has a particular emphasis on preventing aviation accidents, which allows for the urgent prohibition of a civil aviation authorisation by the Court for only that period which is sufficient to allow CASA to complete an investigation into the circumstances that gave rise to its decision to suspend the authorisation.
33 It is for the Court to form its own view as to what are reasonable grounds for its belief: Boatman 2006 at [25].
The required standard of proof
34 In Boatman 2004 Sundberg J noted at [11], and I agree, that it is reasonable to describe the application as more akin to an application for an interlocutory injunction than to a full trial of the issues. His Honour said:
If there is to be any extension of the interim suspension, it can only be done by the Court. Any such extension is analogous to the grant of an interlocutory injunction prior to the expiration of an interim injunction.
35 That the application is for a prohibition order operating only until CASA has finalised its investigations, and is akin to the grant of an urgent interlocutory injunction, must be borne in mind by the Court in determining whether, on the evidence, there are reasonable grounds to believe that there is a serious and imminent risk to air safety. As Madgwick J explained Boatman 2006 at [24]:
…ordinarily the legislature’s evident contemplation was that the Court will have the task of forming its judgment on incomplete materials. Thus a reasonably sanguine view must be taken of the way in which reasonable people might differ in their approach to matters. So, even if the Court took the view that a serious and imminent risk to air safety were not affirmatively proven on the balance of probabilities, in my opinion the Court nevertheless should be cautious, if there be some evidence of relevant matters for concern, before concluding that there is no reasonable ground for belief.
36 Madgwick J correctly rejected the proposition that, given the seriousness of the consequences of any adverse findings on the reputation and livelihood of the pilots in that case, the evidentiary principles in Briginshaw v Briginshaw (1938) 60 CLR 336 (“Briginshaw”) at 361 to 363 were applicable. His Honour held at [62]:
The proceedings are primarily protective of the public, notwithstanding that fairness to impugned authorisation holders is an important part of the process. Further, any adverse finding that the Court might make is provisional only: it would merely assert that there are reasonable grounds for believing that some conduct had been in contravention of the statutory requirement. It would be inconsistent with the statutory commands to the Court to consider ‘reasonable grounds to believe’ and to give safety the primary emphasis to require that the Court only act on proofs which are not ‘inexact’, testimony which is not ‘indefinite’ and inferences which are not ‘indirect’ (see Briginshaw at 362).
37 Similarly, in Loughnan the Court noted at 692 that evidence which would not, generally speaking, be admissible at trial could be taken into account as “[t]he information is put forward, not as evidence of its own truth, but simply as information: as part of the material which it is said gives the police officer reasonable grounds for belief.” The Court considered that hearsay evidence might be acted upon by it in reaching the required state of satisfaction.
38 It follows that, while procedural fairness must be afforded, I may have regard to evidence that is inexact or indefinite in providing a foundation for the existence of ‘reasonable grounds to believe’ the factual matters upon which my satisfaction rests. It is unnecessary for me to resolve the conflicts in the evidence by preferring the evidence of some witnesses over others as if at final trial, or by making ultimate findings as to the credit of any witness.
39 The Court has had the benefit of detailed affidavit evidence from four senior CASA officers involved in the investigation of Alligator, supplemented by further evidence in chief from three of them who were subjected to cross-examination. The Court has also had the benefit of detailed affidavit evidence supplemented by further evidence in chief from Mr Kendrick and Alligator’s Chief Pilot, Mr Gerard Street, who were both subjected to cross-examination. CASA’s evidence as to the incidents themselves was largely hearsay being based on reports received before and during its investigation. The occurrence of the incidents was largely not controversial but the cause of the incidents was. CASA’s conclusions from its investigations were largely based on the reports it received. Alligator’s evidence as to the incidents was also often hearsay, as the pilots, former Chief Pilot, and former Chief Engineer involved in some of the incidents were not called. Alligator’s evidence as to the more recent incidents through its present Chief Engineer and Chief Pilot was largely first hand, although again the pilots were not called.
Serious and imminent risk
40 The expression “serious and imminent risk to air safety” is a composite phrase with four elements. While these elements cannot be separated and considered in isolation from each other, they are as follows:
(a) The element of “risk”: The Oxford Dictionary defines this to include exposure to danger and the possibility of loss, injury or other adverse circumstance. In context it means the possibility of the public, the passengers, the airline’s employees or aircraft, and other aircraft, suffering danger, harm or damage.
(b) The requirement that the risk be qualitatively “serious”: The Oxford Dictionary defines this to include important, grave, or having potentially important, especially undesired, consequences. In context it means that the risk must be serious in degree or amount, threatening danger, loss or damage with significant consequence, or giving cause for significant concern.
(c) The requirement that the risk be “imminent”: The Oxford Dictionary defines this to include in relation to danger or disaster, something which is impending, or soon to happen.
(d) The requirement that the risk be to “air safety”: Because all flying involves some risk “air safety” cannot be a reference to the inevitable risks commonly accepted by a competent pilot in Australia, flying an airworthy aircraft in Australian flying conditions. Madgwick J reached a similar view in Boatman 2006 at [54] when he noted that if this were so “much accepted light civil aviation might be required to cease.”
41 The seriousness of the risk is related both to the probability of the risk eventuating and also to the significance of the consequences of the risk if realised: Boatman 2006 at [45]. In my view s 30DB does not relate to risks which are quite probable but which would have trivial consequences if the risk eventuated.
42 I consider that conduct falling short of “best practice” and some elevation of the level of risk can exist without there being reasonable grounds to believe that there is a serious and imminent risk to air safety: see Boatman 2006 at [50].
43 Assistance as to whether a risk to air safety is “serious and imminent” can also be derived from the scheme of the Act. A panoply of powers are provided to CASA to regulate air safety, including by grounding aircraft for not being airworthy and by issuing show cause notices to rectify significant problems in relation to maintenance and pilot proficiency. Division 3A is aimed at conduct by an authorisation holder which constitutes such a risk to air safety that it warrants immediate, temporary withdrawal of the rights of that person. Such withdrawal may have very serious consequences on the livelihood of the authorisation holder. The test of “serious and imminent risk to air safety” should be seen in this context: Boatman 2006 at [47].
44 In Boatman 2006 at [55] Madgwick J put the test as to “serious and imminent risk” as follows:
So far as the present case goes, the test is, in my opinion, given appropriate meaning by asking: was there a really significant prospect that such risks of serious considerable harm as actually existed, in relation to the conduct complained of, would materialise?
I consider that it is sufficient if there is a significant, rather than a “really significant”, prospect that a risk of considerable harm or damage would actually materialise.
45 It may be that his Honour put the test in the way he did because the argument in that case centred on whether there was a real risk of serious harm at all. The case involved a very experienced commercial pilot taking off in a small aircraft from a public road - which had been closed for the purpose - in a small and isolated settlement in South Australia. The Court concluded that there was no serious and imminent risk as the experienced pilot had put thought into his assessment of the risks involved and how they might be managed, reaching the view that the take-off involved manageable risk given his capacities. The incidents relied on by CASA in this matter are completely different. The thrust of Alligator’s argument was not that there was no real risk of harm or damage in the key incidents, nor that the risks were manageable.
46 However, nothing turns on the slightly different test which I propose. My judgment would be the same if I used the test as proposed by Madgwick J.
CONSIDERATION
CASA’s evidence
47 Evidence in support of CASA’s application was given by officers with substantial relevant aviation experience as follows:
(a) Mr Robert Wight who is an experienced pilot with 12,400 hours of accumulated aeronautical experience gained from flying for more than 20 years in a wide variety of single and multi-engine aircraft types. On top of his experience with CASA as a Flying Operations and Airworthiness Inspector managing surveillance, regulatory service and safety system activities he has worked, amongst other positions, as a Flying Instructor, a Charter Pilot, an Airline Pilot and Airline Check and Training Captain, the General Manager (Operations) of Kendall Airlines; General Manager (Operations Regionals) of Ansett Australia, ISO Lead Auditor, Flight Operations Inspector and Flight Test Officer with the Pacific Aviation Safety Office, and as a Director of Aviation Operations Consultants Pty Ltd.
(b) Mr Gene Truan who is a LAME with approximately 40 years of experience performing maintenance on normally aspirated and turbocharged piston engines, including with Royal Brunei Airlines in Brunei, Garuda Airlines in Australia, Emirates Airlines in Dubai, and Air Nuigini in PNG, Australia Europe and Asia. He is also a licensed pilot with approximately 1000 hours as pilot in command time; and
(c) Mr Roger Weeks who is an experienced pilot with 7,600 hours of accumulated aeronautical experience including substantial experience as a Chief Pilot, Chief Flying Instructor and Flying Instructor. Mr Weeks holds a Masters degree in Aviation Management and a Diploma of Aviation Safety Regulation. He is presently the Manager of CASA’s Flying Standards Branch.
48 A short report by Mr Jonathan Carder, an independent LAME, headed “Investigation of Cause of Engine Failure of Cessna 207 VH-WOX, Theda Station 10/05/2012” was admitted into evidence. It recorded the results of an inspection of the engine of the single engine aircraft that had suffered a catastrophic failure on 14 April 2012 and included photographs of the oil filter which showed many metal fragments.
49 In relation to the low-flying incident on 20 April 2012, photographs of Alligator aircraft which showed the red tail on its aircraft were admitted into evidence without objection, as the complaint to CASA identified the aircraft involved as having Alligator markings. An affidavit by Mr Peter Nottle, the General manager of Slingair, another aviation company which operates from Kununurra Airport, was admitted into evidence without objection. Mr Nottle deposed that at the time of the low-flying incident Slingair had no aircraft with a red tail.
50 Video footage taken by Ms Sonia Furnell, a passenger in the GA8TC Airvan VH-WOV on 28 April 2012, was admitted into evidence. This video footage provided a passenger’s view from the aircraft which attempted take-off from Kununurra Airport with six fare paying passengers on board when the turbo-charger was not functioning.
Alligator’s evidence
51 Two senior employees of Alligator, each of who had significant aeronautical experience, gave evidence in opposition to the application”
(a) Mr Kendrick is a LAME with 35 years experience, and holds the position of Chief Engineer. I was not taken in any detail to his work history. However he rated his own expertise highly when asked to comment in that regard and he presented as a considered and experienced aircraft maintenance engineer.
(b) Mr Gerard Street, who is Alligator’s Chief Pilot (although under suspension) is an experienced pilot. He has over 26 years experience in general aviation including 8500 hours of flight time experience which includes 5000 hours in multi-engine aircraft and 750 hours of instrument flying. He holds a multi-engine command instrument rating and a grade one flight instructor rating endorsed for both single and multi-engine training and for the training of flight instructors including multi-engine flight instructors. He has held an Authorised Test Officer approval issued by CASA which authorised him to conduct flight tests for the issue of General Flight Progress Tests, Private Pilot Licences, Night Visual Flight Rules and Instrument Flight Ratings.
52 Two affidavits by Mr Barry Foster, a LAME and the owner of aviation company Dompter Pty Ltd were admitted into evidence without objection. The thrust of this evidence is that, under its COA and subject to CASA approval, Dompter is prepared to carry out all of Alligator’s future maintenance requirements independently of Alligator and Mr Kendrick.
The background incidents
53 In Show Cause Notices issued to Alligator between September 2011 and April 2012 CASA raised various matters that arose between 2009 and 2011. Some of the issues raised seem significant and systemic, others seem less significant or are isolated incidents. In summarising them it is difficult to avoid missing some of their finer details but, with that note of caution in mind, they include the following:
(a) Carrying out unauthorised modifications and repairs to aircraft;
(b) Flying aircraft beyond their required periodic maintenance checks;
(c) Manipulation, backdating and falsification of maintenance documentation and false maintenance certifications;
(d) Failures to perform required standard and specific maintenance work;
(e) Installation of unapproved stereo systems in aircraft;
(f) Component installation by unlicensed engineers;
(g) Operation of an aircraft with an unserviceable alternator;
(h) Operation of an aircraft with an unserviceable autopilot;
(i) Conduct of “overweight” flights;
(j) A delinquent safety culture that prioritises business interests over safety;
(k) Conduct of unauthorised flights after last light;
(l) Failures to report several immediately reportable air safety incidents, including an incident of an aircraft door opening mid-flight, and an incident of a pilot overshooting the runway on landing;
(m) Operation of the airline without a Chief Pilot for a period of 20 days; and
(n) Keeping inadequate training records.
54 Alligator has given various answers in its written responses to the Show Cause Notices. In some cases Alligator denied that CASA’s complaints have any substance, in other cases it admitted them. Sometimes Alligator admitted the complaints, but maintained that the incidences were isolated or “one-off”. Alligator also relied on the termination of the employment of the employees involved as an answer to CASA’s concerns. Alligator effectively admits some shortcomings in its maintenance and in its pilots’ competency but says that these problems were remedied by the dismissal of the former Chief Engineer and the former Chief Pilot. It denies CASA’s complaint that there is a delinquent safety culture at Alligator, or if such a culture is found to exist that it can be laid at the feet of either Mr Kendrick or Mr Street.
55 These background incidents were not heavily relied on by CASA in support of its application for a prohibition order under s 30DE. Although I have read and considered each of the Show Cause Notices together with Alligator’s response, I was not taken to these matters in further detail by the witnesses, or in submissions. Although the background incidents set the scene to some degree my judgment does not depend on these matters.
The key incidents
56 CASA relies on six key incidents which occurred between 2010 and 2012, and these require a more detailed consideration. These are as follows:
(a) 24 June 2010 – Engine failure of Gippsland Aeronautics GA8 VH-IOP;
(b) 17 May 2011– Engine failure of Piper PA-23-250 VH-BJN;
(c) 31 May 2011 - Electric trim control failure on Piper PA-23-250 VH-BJN;
(d) 14 April 2012 - Engine failure in Cessna 207 VH-WOX;
(e) 20 April 2012 - Low flying near Ord River; and
(f) 28 April 2012 – Turbo- charger failure of Gippsland Aeronautics GA8TC VH-WOV.
24 June 2010 – Engine failure of GA8 VH-IOP
57 On 24 June 2010 Alligator’s single engine Gippsland Aero GA8 aircraft VH-IOP had fare paying passengers on board on a scenic flight when it suffered an engine failure. The pilot reported that there was a loud bang with the propeller coming to a grinding halt and smoke then came out of the engine bay. The aircraft was forced to make an emergency landing at the Kununurra airstrip. That this concerning incident occurred is not disputed by Alligator.
58 CASA says that in June 2010 the then Chief Pilot received complaints from pilots that the aircraft was using large amounts of oil. It notes that the Chief Pilot says he raised these concerns with Mr Kendrick who reacted defensively. The Chief Pilot was sufficiently concerned to conduct a check flight of the aircraft. The pilot informed CASA that when he advised the Chief Engineer of the high oil consumption, he was told that the aircraft would receive a new engine in one to two weeks and that he should just “see it through”. The pilot says that he checked the oil at the commencement of flying on 24 June 2010 and measured it at 9.5 quarts.
59 CASA says that the engine was consuming excessive oil and that its failure was due to a lack of oil. It says that its review of the Safety Deficiency Report in respect of this incident and the maintenance release records for the aircraft show that the pilots and the Chief Engineer were or should have been aware that the aircraft’s oil consumption was substantial, and increasing so as to shortly approach and exceed the usage limit. CASA says that no adequate maintenance was performed to determine the cause of the excess oil consumption. It says that even following this incident there is no indication that Alligator reviewed its practices relating to the monitoring, recording and uplifting of oil of its aircraft or any additional training to its pilots in that regard.
60 CASA says that Alligator’s pilots and Chief Engineer were not accurately monitoring and recording the oil consumed by or uplifted into the aircraft, and whether due to poor training and a lax safety culture or otherwise, they had no idea of the damage that was occurring to this engine because of inadequate oil.
61 Alligator says in response that:
(a) the risk that a pilot may forget to top-up oil is an every day risk;
(b) the pilot’s failure in this case was not expected or condoned by Alligator;
(c) while “end-of-life” engines consume oil, they can still be operated if this is within limits;
(d) the incident occurred almost two years ago;
(e) the pilot and Chief Pilot involved are no longer employed by Alligator; and
(f) there is no evidence of systemic problems within Alligator that contributed to the incident.
62 It is unnecessary to reach a conclusion as to whether, considered alone, this incident gives reasonable grounds to believe that Alligator has engaged in, is engaging in, or is likely to engage in, conduct that constitutes, contributes to or results in a serious and imminent risk to air safety. In reaching my judgment I have considered this incident in the context of the other incidents so as to obtain an overall view of Alligator’s conduct.
63 CASA says, and I accept, that the incident represented a substantial risk to the safety of the passengers and therefore a serious risk to air safety. The failure of the engine in this single engine aircraft could easily have led to disaster. Alligator did not seek to argue otherwise but instead largely focussed on a denial that its conduct constituted, contributed to or resulted in this risk.
64 In my view there are reasonable grounds to believe that the aircraft was consuming excessive oil because:
(a) it consumed about 9.5 quarts on the day in question; and
(b) CASA says that the aircraft’s maintenance releases for the three 50 hour periods of operation prior to the incident show a developing problem with oil consumption.
There are also reasonable grounds to believe that the developing problem with oil consumption should have been apparent to Alligator’s pilots, Chief Pilot and Chief Engineer from the oil consumption and from the maintenance releases. Based on the reported conversation between the pilot and the Chief Engineer there are reasonable grounds to believe that the oil consumption was given insufficient attention by the Chief Engineer. Given that this developing airworthiness problem was or should have been apparent, Alligator’s operation of this unairworthy aircraft is a serious failure.
65 Based on CASA’s complaint, I also have reasonable grounds to believe that following this incident there was no review or improvement by Mr Kendrick or Alligator of Alligator’s practices regarding the monitoring, recording and uplifting of oil and the training of its pilots or maintenance staff in that regard. Mr Kendrick did not dispute this complaint by CASA.
66 Ultimately, these matters are Alligator’s responsibility, and particularly the responsibility of Mr Kendrick as its sole owner and CEO. Alligator’s response that the Chief Pilot and the particular pilot are no longer employed by it is inadequate. Alligator is responsible for the performance of its own employees, and accountable for their failures or omissions. Section 97A(2) of the Act provides that any failure by one of its employees is conduct by Alligator unless it can establish that it took reasonable precautions and exercised due diligence to avoid the failure. In my view there are reasonable grounds to believe that reasonable precautions were not taken and no due diligence was exercised so as to avoid the failure.
67 I accept that, if this incident is considered alone, the fact that the pilot, Chief Pilot and Chief Engineer involved are no longer employed by Alligator is relevant to the imminence of any risk. However, when considered against the general backdrop of the background incidents and in the context of the other key incidents, such relevance is greatly reduced.
68 Viewed in context with the other incidents, there are reasonable grounds to believe that the problems with the maintenance and airworthiness of the aircraft, and the competencies of pilots in relation to monitoring and uplifting oil, are not just related to these three former employees. In the context of the other incidents, the failures of these employees is indicative of a failure by Alligator to properly train, check and supervise its pilots and maintenance employees, and to ensure that its aircraft are properly maintained and airworthy. Following the incident the failure to improve the training of pilots and maintenance staff with regard to the monitoring, recording and uplifting of oil is indicative of a lax approach to aircraft safety by Mr Kendrick and Alligator.
69 This incident, when viewed in the context of the other key incidents, supports my view that there are reasonable grounds to believe that Alligator has engaged in, is engaging in, or is likely to engage in, conduct that constitutes, contributes to or results in a serious and imminent risk to air safety.
17 May 2011– Engine failure of Piper PA 23-250 VH-BJN
70 On 17 May 2011 the right engine of a Piper PA 23 aircraft registered VH-BJN failed during a flight and was forced to make an emergency landing at Kununurra with fare paying passengers on board. During the descent the pilot did not complete the engine failure drills or “feather” the failed engine, as required by the Operations Manual and the Pilot Operating Handbook. CASA said that during a subsequent interview with the pilot on 21 June 2011, she displayed a poor standard of knowledge of how to respond to a failed engine in a multi-engine aircraft. The incident was not immediately reported by Alligator as required.
71 It was not controversial that not feathering a failed engine in a multi-engine aircraft - that is getting the propeller blades into the feathered position which brings them to a stop and reduces the significant drag that occurs with a windmilling propeller - represents a serious threat to the safety of the aircraft to continue to perform.
72 CASA again says, and I accept, that the failure of the pilot to properly respond to the situation that arose when the engine failed posed a serious and imminent risk to air safety. Alligator did not dispute the occurrence of the incident, and apparently accepted that the failure to feather the engine was a serious error by the pilot. The thrust of Alligator’s argument was that its conduct did not constitute, contribute to or result in what was plainly a serious risk to air safety because:
(a) the pilot had been licensed and checked by CASA before the incident which was indicative to Alligator that she was competent;
(b) the incident illustrated the pilot’s inadequate skills despite her being licensed and checked by CASA and checks performed by Alligator;
(c) the Chief Pilot cannot be said to have contributed to the incident because the pilot had been checked by a CASA;
(d) the likelihood of a pilot displaying poor standards is an everyday risk;
(e) neither the pilot or the Chief Pilot are any longer employed by Alligator which means that any risk cannot be imminent;
(f) there is no evidence of systemic problems within Alligator that contributed to the incident.
73 It is clear that this incident, viewed in its context, provides reasonable grounds to believe that that this serious risk to air safety was contributed to or resulted from Alligator’s conduct, primarily because Alligator is responsible for ensuring the proficiency of its pilots. Section 97A(2) provides that a pilot’s failures are sheeted home to Alligator unless it can establish that it took reasonable precautions or exercised due diligence in that regard. There was no evidence that it did so.
74 While accepting that its pilot made a serious error, Alligator argues against a prohibition order on the basis that this pilot was licensed, and checked in an audit, by CASA. This argument, which seems based in the remarkable proposition that it is CASA rather than Alligator which is responsible for the performance of Alligator’s employees, is utterly without merit. I accept CASA’s submission that once a pilot graduates from a flying school, and commences work with an AOC holder, the Chief Pilot has the obligation to conduct such induction, ongoing training, checking, and monitoring of pilot proficiency and standards as are required to assure the authorisation holder of the competency of the pilot.
75 All pilots are licensed by CASA and subject to checking by it. Apart from anything else, Division 3A would have no operation to protect the public from risks to air safety arising from pilot failures if an application for a prohibition order could be defeated on the simple basis that the pilot was licensed by CASA.
76 I do not accept Alligator’s contention that the risk that a pilot will be unable to properly manage an engine failure in a multi-engine aircraft is an everyday risk of aviation. Each pilot is trained as to the appropriate response to that eventuality, and should not be licensed until proficient. Following the obtaining of a licence it is the responsibility of the authorisation holder to check, supervise and provide ongoing training to its pilots so that they are proficient in the aircraft that they are flying. The risk of such a serious pilot error is not an inevitable risk of aviation in the sense referred to by Madgwick J in Boatman 2006 at [54]. In my view Alligator’s contention that the likelihood of a pilot displaying such poor standards is an everyday risk is itself indicative of an insufficiently rigorous approach to air safety.
77 I also do not accept that there is no evidence of any systemic problem within Alligator that contributed to the incident. Considered in the context of the other key incidents of serious pilot error (another one of which involved this pilot), this incident supports my view that there are reasonable grounds to believe that there are systemic problems within Alligator that contributed to this incident. It is relevant that this incident was not reported to CASA by Alligator until 23 May 2011 and there is no evidence that Alligator grounded or retested the pilot. It allowed the pilot to continue to fly for it and on 31 May 2011 she was involved in another serious incident involving a risk to air safety. There are reasonable grounds to believe that the failure of Alligator and Mr Kendrick to take any steps to ground or retest the pilot after the first incident is indicative of a lax approach to pilot proficiency and safety.
78 In relation to this and several other of the key incidents Alligator and Mr Kendrick seek to avoid accountability for the obvious risk to air safety by pointing at the immediate cause of the incident, for example, pilot error. I accept CASA’s contention that, particularly where an organisation suffers repeat incidents or near misses, that it is important to consider causes beyond the immediate one. In such circumstances there is rarely a single contributing factor and the approach taken by the organisation to safety considerations is often very important. Although it is likely to be impossible to remove human error from the safety equation, there can be little doubt that, amongst other things, the control exercised by an organisation in relation to safety, the steps taken to check safety proficiency, and provide ongoing training with regard to safety and compliance with safety systems is an important part of reducing risk. In my view there are reasonable grounds to believe that Alligator and Mr Kendrick do not take a sufficiently rigorous approach in this regard.
79 Alligator also argues that any risk to air safety arising from this incident cannot now be imminent because the pilot and Chief Pilot concerned are no longer employed by it and have not been for some time. If the incident is viewed alone that may be so. However, when viewed in the context of the other incidents referred to, this incident supports my view that there are reasonable grounds to believe that there are systemic problems within Alligator with regard to pilot proficiency. In its context the incident illustrates that there are reasonable grounds to believe that Alligator has engaged in, is engaging in, or is likely to engage in conduct that constitutes, contributes to all results in a serious and imminent risk to air safety.
31 May 2011 - Electric trim control failure on Piper PA 23-250 VH-BJN
80 On 31 May 2011 aircraft Piper PA 23-250 registered VH-BJN was ascending after takeoff from Kalumburu when it suffered a runaway electric elevator trim control. The elevator trim control is automatically activated and is designed to relieve control pressure by the pilot by operating to control the nose of the aircraft pitching up or down. The runaway trim control caused the nose to pitch up significantly and dramatically and keep going up despite the effort of the pilot to keep it at the appropriate angle.
81 CASA’s evidence was that the correct remedial action by a pilot in this situation is to disable the trim control. If the aircraft has a separate electric trim switch the pilot should simply switch that off, and if not, the pilot should pull the circuit breaker associated with the electric trim. That disables the electric trim control and the trim of the aircraft can then be managed manually by the pilot.
82 There were fare-paying passengers on board the aircraft and one of them informed CASA that several minutes into the ascent the aircraft failed to level out and continued pitching upwards until the angle of the aircraft approached 50°, and was still increasing. According to the passenger the pilot was struggling with the flight stick and was pinned back in her seat with the flight stick at her chest, as the aircraft continued upwards at full throttle. He said that the pilot then appeared panicked, and called on a passenger to help by pushing down on the secondary flight stick. The passenger did so and the aircraft then levelled out, but the pilot lost control for a period and the aircraft began banking left and right.
83 The passenger also reported that on the descent to Kununurra the pilot’s handling of the controls was confused, as she cut the engine almost entirely and the aircraft lost speed at a dramatic pace, entering a series of mid-air bunny hops. The passenger observed that the pilot gave the appearance that she did not have the knowledge, strength or experience to fly the aircraft.
84 That this concerning incident occurred is not disputed by Alligator. The thrust of Alligator’s argument was not that the incident did not constitute a serious risk to air safety but rather that its conduct did not constitute, contribute to or result in this risk.
85 Alligator said that:
(a) It is not clear whether the runaway trim control was due to pilot error or a mechanical problem.
(b) In the event it was an engineering problem, the incident occurred during the term of the previous Chief Engineer;
(c) Both the pilot and the Chief Engineer are no longer employed by Alligator;
(d) The incident occurred almost a year ago; and
(e) There is no evidence of systemic problems or a malaise within Alligator that contributed to the incident.
86 Mr Kendrick’s evidence was that it is not clear whether the problem with the electric trim control on the aircraft was a mechanical failure or whether the pilot had inadvertently selected a “nose up” attitude on the trim control. He said that this error may have arisen because the pilot was somewhat unsettled by an earlier incident that day.
87 This may be so, but if this is the case, the responsibility for the pilot being unsettled also rests at Alligator’s feet. Earlier that day whilst transporting medical staff the door of the aircraft flew open in mid-flight and passenger articles including a surgeon’s laptop went out the door. Alligator conceded that the push down lock on the door was not working properly and a passenger was therefore able to inadvertently nudge it open. One can certainly understand why this incident would be unsettling.
88 Whatever the cause of the trim control problem, it is not disputed that the pilot failed to take appropriate steps to deal with the situation by disengaging the electric trim control.
89 I have reasonable grounds to believe that a serious risk to air safety was only averted because a passenger was able to assist the pilot, and that the pilot was not competent to properly manage the situation. I also have reasonable grounds to believe that the pilot was then so shaken by the incident that her conduct of the flight thereafter was erratic, which gave rise to a further serious risk to air safety.
90 There are reasonable grounds to believe that this risk was contributed to by or resulted from Alligator’s conduct, primarily because Alligator is responsible for the checking, ongoing training and supervision of its pilots so as to ensure their competence. I reiterate my earlier remarks about the operation of s 97A(2) of the Act.
91 Again, Alligator argues that the risk to air safety is not imminent because the pilot involved is no longer employed by it. Whilst relevant, this is not a complete answer. As I have previously indicated, the incident should be viewed in the context of the other incidents which show a lack of pilot proficiency. There are reasonable grounds to believe that the incidence of serious errors by Alligator’s pilots are indicative of a failure by Alligator to properly check, provide ongoing training and supervise them. The risk created by this failure on Alligator’s part therefore remains current.
14 April 2012 - Engine failure in Cessna 207 VH-WOX
92 The first of the more recent events upon which CASA relies occurred on 14 April 2012 when a single engine Cessna 207 registered VH-WOX suffered a catastrophic engine failure and was forced to make an emergency landing by gliding into Theda cattle station. The aircraft was carrying Mr Kendrick and the pilot.
93 Mr Truan, Mr Wight and Mr Weeks all gave evidence that it should have become apparent to Alligator that there was a defect with the aircraft’s oil pressure on 31 March 2012 when the trend monitoring sheets for the aircraft showed a sudden and dramatic drop in oil pressure. They said that this drop in oil pressure was a major defect and that the aircraft should not have been flown again until adequate maintenance had been performed to diagnose and rectify the defect. The CASA witnesses also stated that the trend monitoring sheets over the period between 31 March and 13 April 2012 showed oil pressure at the bottom of or just outside the acceptable range, which therefore required attention. However, Alligator continued to operate the aircraft on 8 occasions in this period.
94 It was not until 13 April 2012 that the defect was endorsed on the aircraft’s maintenance release by a pilot. Mr Truan gave evidence that Mr Kendrick failed to perform adequate maintenance to rectify the defect once this defect was so endorsed, and did not perform the troubleshooting steps in the Cessna 207 Service Manual. Mr Truan said that if Mr Kendrick had followed the troubleshooting steps he would have removed and inspected the engine oil filter which was an easy task. Mr Kendrick accepted that he did not perform the specified trouble shooting steps but maintained that his approach was reasonable.
95 The maintenance performed by Mr Kendrick on 13 April 2012 was the removal of the oil pressure relief valve, the removal of some minor debris, and the refitting of the relief valve. He performed the same steps on 14 April 2012 when he was forced to fly to Theda cattle station to again address the oil pressure defect. The pilot of VH-WOX had landed at the station because of his concern about the low oil pressure.
96 Mr Truan described both of Mr Kendrick’s attempts at fixing the defect as grossly inadequate to diagnose and rectify the cause of the problem.
97 The report by the independent engineer Mr Carder showed that the low oil pressure was caused by the shifting of a main crankshaft bearing which had allowed oil to escape. The report also revealed an oil filter full of metal fragments. Mr Truan’s evidence was that Mr Kendrick should have inspected the oil filter as part of his diagnosis of the cause of the oil pressure defect. If he had done so Mr Truan says he would most likely have detected the presence of metal in the filter. The aircraft would then have been grounded until further exploratory maintenance was performed. Mr Kendrick gave evidence that there were no metal fragments in the oil when he performed his maintenance, and there was therefore no need to look at the oil filter. Although there was no record of this before the Court, he contended that he had inspected the oil filter 10 flight hours earlier as part of routine maintenance.
98 Again, Alligator does not deny that this concerning incident occurred. Again, the thrust of its argument was not that there was no serious risk to air safety but rather that this risk was not contributed to or resultant from its conduct. It did not argue that any risk was not imminent.
99 Alligator argued that:
(a) The incident must be viewed in the context of the fact that Alligator flies 7,000 hours in the six month high season;
(b) The trend monitoring sheets indicate the oil pressure needle was in the green arc save for one instance, and back in the green arc on 4 April 2012. It noted that the trend sheets did not show high oil pressure as they would be expected to show if the oil filter was blocked by metal fragments;
(c) Mr Kendrick carried out a periodic inspection of the aircraft 10 flight hours prior to the incident, at which time the oil filters were changed and he saw no metal in the oil filter at that time;
(d) Dropping oil pressure commonly indicates that the oil pressure release valve is being held open, thereby reducing oil pressure;
(e) Although Mr Kendrick did not refer to the aircraft handbook, the steps he took were consistent with the steps contained in the handbook for low oil pressure. His practice was to go through a mental check list, which involved going through the common causes, one of which was the oil pressure release valve. He cleaned the valve after which the oil pressure returned to normal;
(f) At Theda cattle station he inspected the oil pressure release valve and found no metal particles in the oil;
(g) Mr Kendrick behaved prudently by suggesting that when the aircraft took off from Theda it fly to 7,000 feet around the airstrip. Because of this decision he was able to make a safe unpowered return to Theda when the engine failed;
(h) The report of Mr Carder states there was a catastrophic engine failure, caused by the migration of a bearing rather than by low oil pressure. The incident would have occurred even had the earlier issues with oil pressure not occurred;
(i) Mr Carder’s report shows the cause of the failure could not be foreseen because it was a shift in bearings which caused the crank shaft to break and failure of the engine;
(j) The incident was unforeseen and a “one-off”.
100 Alligator’s contention that this incident must be viewed in the context of 7000 hours of flight time during the high season is weak. First, this incident occurred at the start of the high season when it might be expected that the aircraft would be in near perfect condition in readiness for the season. Second, the maintenance of its aircraft must be performed so that the aircraft can safely meet the mechanical demands created by the volume of flights.
101 Based on the evidence of Mr Truan, and of Mr Kendrick and Mr Street as to the way in which trend monitoring sheets were reviewed within Alligator, there are reasonable grounds to believe that Alligator’s employees failed to properly review the trend monitoring sheets to assist in diagnosing defects.
102 It appears to be correct, as Alligator contends, that the engine failure was not due to low oil pressure. However, this somewhat misses the point. That there are a number of possible causes of low oil pressure is clear from the service manual. Based on the evidence of Mr Truan and the service manual there are reasonable grounds to believe that Mr Kendrick failed to properly investigate the oil pressure defect, and if he had done so the problem would have been found. There can be little doubt that if metal fragments had been found in the oil filter the aircraft would have been grounded until the cause was located. Mr Kendrick thereby missed the opportunity to avoid a dangerous in-flight failure.
103 While Mr Kendrick’s decision to have the aircraft flown to 7000 feet above Theda station before attempting the flight back to Kununurra displayed some prudence, it would have been more prudent to properly address the oil pressure defect in the first place. This would have removed the serious risk occasioned by the failure of the engine.
104 As Alligator’s LAME, Mr Kendrick is responsible for maintenance under its COA. There are reasonable grounds to believe that he did not perform adequate maintenance on this occasion. He twice had the opportunity to rectify an oil pressure defect but at no point discovered the true cause of the problem. Disaster was only avoided because the pilot had the skill, and the weather permitted, the aircraft to glide in. When considered in the context of the other incidents of inadequate maintenance, this incident supports my view that there are reasonable grounds to believe that Alligator’s conduct constituted or contributed to a serious and imminent risk to air safety.
20 April 2012 - Low flying near Ord River
105 The second of the recent events upon which CASA relies is an incident on 20 April 2012 when it alleges that an unidentified Alligator Airvan flew at about 200 feet near the Ord River in close proximity to helicopters conducting aerial cattle mustering. If the helicopter pilots had not taken evasive action there could have been a mid-air collision.
106 It is common ground between the parties that such low-flying is unauthorised. Alligator did not seek to defend this conduct and Mr Kendrick said that he would immediately dismiss a pilot who flew in this way. However he denied that any Alligator aircraft was involved in this incident and says that the flight plans of its aircraft show that there was no Airvan near the Ord River on that day.
107 CASA relied on a complaint made by the helicopter pilots employed by Lone Eagle cattle station to their manager or employer. The manager, Mr Conley, in turn complained to Mr Truan. In doing so he stated that this was not the first time that an Alligator aircraft had flown low near to helicopters performing cattle mustering. Mr Conley said that although the helicopter pilots did not obtain the registration number of the aircraft they had reported that it was an Airvan with Alligator markings on its tail. Alligator aircraft have a distinctive red tail. CASA argued that these local helicopter pilots could be expected to recognise an Alligator aircraft.
108 There are only two aviation companies in the area that fly Airvans, the other being Slingair which is also based in Kununurra. Initially Alligator argued that the aircraft may have been operated by Slingair, as it too has an Airvan with a red tail. However, Mr Nottle of Slingair deposed that the only aircraft it has with a red tail was acquired after this incident.
109 It is unarguable that flying an aircraft at this low height, in close proximity to helicopters that were not expecting other aircraft to be in the vicinity, causes a risk of midair collision and constitutes a serious and imminent risk to air safety. Alligator did not dispute this grave risk. The question is whether Alligator was involved in such an incident.
110 The only evidence before me that the aircraft in question is operated by Alligator is hearsay twice removed. Alligator’s flight plans indicate that no aircraft was in the vicinity. Mr Kendrick and Mr Street were both firm in their denial that Alligator was involved in any such incident, and both were also firm in their statements that they would dismiss any pilot who flew in this way. However, despite this apparently strong stance Mr Kendrick also gave evidence that he had not yet questioned the pilots who flew the two Airvan flights that day to see whether they had diverted from their flight plans. His failure to make this necessary enquiry is of concern.
111 Despite my concern about Mr Kendrick’s failure to make necessary enquiries, and while I may have regard to evidence that is inexact or indefinite, on balance I am not satisfied that there are reasonable grounds to believe that Alligator engaged in this conduct. I note that CASA’s investigations are continuing and that it proposes to interview the passengers on the two relevant flights.
28 April 2012 - Emergency landing aircraft VH-WOV
112 The last of the recent incidents relied on by CASA occurred on 28 April 2012 when the single engine Gippsland Aeronautics GA8TC Airvan registered VH-WOV carrying six fare paying passengers suffered a failure of its turbo charger. The failure was noticed by the pilot prior to take-off from Kununurra Airport but he still attempted takeoff. While the aircraft was able to become airborne it could not climb above 30 feet, and then suffered a further loss of power so that its height was about 5 to 10 feet. The pilot attempted to slowly return to the airport rather than landing in adjacent paddocks. It was difficult to do so because the aircraft could not easily be banked without risking a wing touching the ground. The pilot was eventually able to land the aircraft on the rough ground beside one of the taxi-ways at the airport.
113 Video footage of the flight taken by a passenger was admitted into evidence. It provided a chilling insight into the unfolding of this incident. The video showed that when finally about to land one wing of the aircraft came within about 2 feet of striking the ground.
114 Again, Alligator did not deny this concerning event. It did not attempt to argue that taking off in this aircraft was not a serious risk to air safety. Mr Street’s evidence was also that the pilot’s decision to attempt to return to the airfield rather than attempting an emergency landing straight ahead in the adjacent paddocks, involved an incredible risk.
115 CASA said that it was informed by the pilot that his decision to continue with take-off notwithstanding the non-functioning turbo-charger was based on two considerations:
(a) he had a conversation with Mr Kendrick a few days earlier in which Mr Kendrick had advised him that if the turbocharger was inoperative the engine works just like a normally aspirated engine and can still be used for flight; and
(b) he felt under pressure to conduct the takeoff because the flight was running very late as the aircraft that he had been assigned to fly had a defect, which forced him to change to VH-WOV. He also felt pressured to take off because he had failed to take off on time on two previous occasions, and Mr Kendrick and Mr Street had addressed a recent pilots meeting about the importance of taking off on time.
116 Mr Kendrick said that he had performed some maintenance work on the waste-gate pins of the turbo-charger in the period shortly before the incident. Because of this he advised pilots at a routine pilot meeting to beware of the turbo-charger “over-boosting”. He said that at the conclusion of that meeting he had a conversation with the pilot involved in this incident about the effect in general terms of a turbo-charger failure. Both he and Mr Street gave evidence that the failure of a turbo-charger results in the engine generating the power of a normally aspirated engine, and that the aircraft would still fly. Mr Kendrick did not deny saying that an aircraft with a non-functioning turbocharger would still fly. There are reasonable grounds for concluding that this is what he did say.
117 It was common ground that the failure of the turbo-charger meant that the aircraft could not climb. An inability to climb is not only relevant to take-off. There are many other occasions in-flight where an aircraft’s capacity to climb is necessary for safe flight. For example, should the aircraft be attempting to land and find the airstrip temporarily obstructed for any reason it is essential that the aircraft be able to climb so as to repeat its attempt later. Climbing may be necessary in other circumstances such as to avoid another aircraft, or to avoid adverse weather conditions.
118 It is impossible to know exactly what Mr Kendrick said to the pilot, and it is possible that he was misunderstood because English is not the pilot’s first language. However, his statement that the aircraft would still fly if the turbo-charger was not functioning was misleading and dangerous. Mr Kendrick needed to take particular care that he was not misunderstood when having this conversation as it was capable of down-playing the danger occasioned by a failed turbo-charger. On the best view for Mr Kendrick, there are reasonable grounds to believe that he did not take sufficient care in this conversation.
119 Alligator again argued that the pilot had been licensed and checked by CASA, which Alligator was entitled to rely on. I reiterate that the responsibility for the proficiency of Alligator’s pilots rests with it. It is required to check, and provide ongoing training and supervision to its pilots so that they are competent to fly the aircraft which they are assigned by Alligator.
120 Alligator also said that it did all it could to ensure the pilot’s proficiency. Mr Street gave evidence that he had had flight checked the pilot on at least three occasions and also tested him on emergency procedures and appropriate engine settings. A written test undertaken by the pilot was in evidence. Mr Street did not find the pilot’s skill or proficiency deficient, and he noted that when challenged, the pilot could not explain why he had taken off when he did.
121 Alligator denied that the pilot was under time pressure as it said that the earlier aircraft to which he had been assigned was ready at the same time as he ultimately took out aircraft VH-WOV. This submission has no merit because by the time VH-WOV was fuelled and ready the flight was already over an hour behind schedule.
122 Alligator contended that the pilot’s failure was gross and so unusual that it was not something that Alligator could have predicted. It describes the incident as a “one-off” incident and said that there was no conduct on its part which contributed to the pilot’s decision to fly the aircraft even though the turbo-charger was not functioning. However, Alligator is responsible for the proficiency of its pilots both as a matter of common sense and pursuant to s 97A(2) of the Act. Any failure by the pilot is a failure by Alligator.
123 In the context of the other incidents which there are reasonable grounds to believe involved inadequate maintenance and lack of pilot proficiency, this incident supports my decision that there are reasonable grounds to believe that Alligator has engaged in, is engaging in, or is likely to engage in, conduct that constitutes, contributes to or results in a serious and imminent risk to air safety. Taking-off in this unairworthy aircraft involved a serious risk to the six passengers, the pilot and the aircraft. There was also a risk to a nearby farm worker who reported to CASA that he had to run sideways to avoid being struck by the undercarriage of the low flying aircraft.
124 In relation to this incident there are reasonable grounds to believe that;
(a) Mr Kendrick understood that there were ongoing difficulties with the turbo-charger despite his maintenance of it. While I do not find that Mr Kendrick knew the turbo-charger was not functioning, he had sufficient remaining concerns about its operation to so advise the pilots.
(b) Mr Kendrick contributed to a situation in which the pilot took a great risk. While I do not find that Mr Kendrick sought to persuade or require the pilot to use the aircraft with a non-functioning turbo-charger, in his conversation with the pilot he understated the risk arising in the event that it did not function.
125 Alligator again argued that there is no imminent risk arising from this incident as the pilot has been “grounded”. I do not accept this. Alligator’s past conduct is a good indicator of its likely future conduct, except in so far as it can show that it has changed its ways. There have been a number of serious incidents, which have involved many different employees, and the risk does not relate to just this particular pilot. I reiterate my view that there are reasonable grounds to believe that Alligator’s organisational issues have played a part in the incidents and Alligator must look beyond their immediate cause.
Systemic problems at Alligator
126 Alligator argued that CASA had not established that there are systemic problems within Alligator with regard to, amongst other things, the adequacy of maintenance and pilot proficiency. It said that CASA had failed to support its claim that Alligator, Mr Kendrick or Mr Street caused or contributed to the key incidents. I do not agree. While I accept that Alligator’s pilot checking and training were significantly improved following the appointment of Mr Street, there are reasonable grounds to believe that they are still not at the standard that they need to be. This is based on matters including the number of incidents that have occurred and the period over which they happened, and the fact that in April there were two (and possibly three) further incidents. I note also that Alligator’s response to the incidents in the Show Cause Notices and in this hearing has to a material degree, although not entirely, been one of denial and blame-shifting. This too is indicative of an organisational or systemic problem. Too often it appears that Alligator has sought to push the blame onto one of its employees, and has not apparently grappled with or attempted to sufficiently improve the overall approach to safety.
127 I accept though that there was an improvement in pilot standards under Mr Street, but I have reasonable grounds to believe that these improvements were “too little too late”. He did not arrive at Alligator until July 2011 and the required reforms were necessarily difficult and time consuming.
128 There are reasonable grounds to believe that Alligator, Mr Kendrick, and Alligator’s employees:
(a) have on a number of occasions and over a significant period failed to perform adequate maintenance, and as a result Alligator’s aircraft have suffered serious mechanical failures which carried a serious risk of an air crash; and
(b) have on a number of occasions and over a significant period failed to ensure that its pilots were competent and proficient to fly its aircraft, or to respond to emergency situations that developed, which again carried a serious risk of an air crash.
This gives me reasonable grounds to believe that there are systemic problems within Alligator with regard to the adequacy of its maintenance (and as a result the airworthiness of its aircraft), and with regard to the checking, on-going training and supervision of its pilots (and as a result their proficiency). These systemic problems constitute, contribute to or result in a serious and imminent risk to air safety.
OTHER MATTERS
The investigation process
129 As the period of any prohibition order must be such period that the Court considers reasonable to allow CASA to complete its investigation, CASA’s evidence was taken as to the proposed investigative process and its progress. Alligator complained that CASA was not conducting the investigations expeditiously, and had been aggressive and nitpicking in finding fault in Alligator’s operations.
130 Alligator referred to some incidents which it said illustrated CASA’s approach. In July 2011 Mr Street underwent an interview and assessment by CASA for appointment as Chief Pilot of Alligator. He gave evidence that on 15 July 2011 CASA Team Leader Mr Len Veger told him that CASA held an unfavourable view of Alligator’s operations and were considering taking administrative action against it. He stated that Mr Veger said that by being appointed as Chief Pilot he was possibly being handed a “poisoned chalice”. Mr Street also complained about the approach and attitude of CASA Flight Operations Instructor Greg Imlay who he says was unhelpful and aggressive. Alligator requested CASA to replace Mr Imlay and assign another officer to its case.
131 Mr Street also gave evidence that the conditions imposed upon his approval as Chief Pilot were draconian. However, in cross examination he was taken to his own emails in which he expressed no concern about these conditions, and said that he felt that “we are developing a conciliatory and productive relationship with CASA under my chief pilot-ship.”
132 Mr Veger and Mr Imlay were not called to refute Mr Street’s evidence but in a proceeding such as this it is not appropriate that any inference be drawn from their absence. Although I found Mr Street a credible witness, it is unnecessary for me to make any finding as to whether Mr Veger made the remarks attributed to him or Mr Imlay behaved as Mr Street asserted. Whatever view I take as to the evidence of Mr Street in this regard, it is clear enough from the correspondence between the parties that is attached to the affidavits, and the behaviour of the parties that I have observed, that there is no love lost between them. This antipathy is understandable as the parties have been in conflict about Alligator’s operations for a number of years.
133 However, I am not persuaded that any antipathy that exists has meant that CASA has not conducted the investigations expeditiously. In its final submissions CASA set out the investigations still to be completed as at 18 May 2012 and it accepted that 10 business days was a reasonable period within which to complete its investigations. The investigation relates to six key incidents, considered against a backdrop of Alligator’s arguably insufficient compliance over several years with various CASA requests and Show Cause Notices. It is reasonable that the investigation take the one month period that the prohibition order allows for.
Alligator’s financial position
134 Alligator has loans with Westpac bank for its business, including for the aircraft, totalling some $6 million. Mr Kendrick is liable as a guarantor for Alligator’s loans. Mr Kendrick’s evidence was that Alligator had financial difficulties even before the issue of the suspension notice. He agreed that Alligator had at times been unable to pay its overheads because of these difficulties, although he denied that it had been unable to pay its employees’ wages at times.
135 Mr Kendrick also gave evidence that since the suspension notice there had been a significant deterioration in Alligator’s financial position as it had been inundated with telephone calls from clients cancelling flights, and creditors demanding immediate payment. He stated that Alligator had defaulted on some of its loan repayments to Westpac, and failed to pay some trade creditors. As at 9 May 2012 he estimated that Alligator was losing $12,000 per day, and had lost up to $150,000 by that point. I note that the suspension was only five days old at that point. He also stated that the uncertainty created by the suspension had caused pilots and administrative staff to threaten to resign. If these staff did resign he stated that it would be difficult to obtain and retrain adequate replacement staff.
136 The fact that the suspension notice and any prohibition order was likely to significantly damage Mr Kendrick and Alligator’s financial position was of great concern to me. This concern required the urgent hearing schedule and questioning of CASA officers as to whether its investigations were being completed as expeditiously as possible.
137 However, the focus of Division 3A of the Act is protection of the public. In deciding whether to make a prohibition order I am required by s 30DE(3) to have regard to the fact that the main object of the Act is maintaining, enhancing and promoting the safety of civil aviation, with particular emphasis on preventing aviation accidents and incidents. It must have regard to the safety of air navigation as the most important consideration. I have taken this approach.
138 Following delivery of my decision on 18 May 2012, and my handing down further decisions as to legal costs and amendment on 1 June 2012, the Court was informed by a Notice of Change of Lawyer dated 6 June 2012 that administrators have been appointed to Alligator.
Proposals by Alligator regarding the investigation
139 In an effort to address CASA’s concerns regarding pilot proficiency Alligator proposes to employ a new Chief Pilot, Mr Berry. There was an issue in the hearing as to whether CASA was delaying this application on a spurious basis. CASA is required to give speedy consideration to the application to appoint a new Chief Pilot.
140 Similarly, to deal with CASA’s concerns regarding inadequacy of maintenance Alligator has entered into a verbal agreement with Dompter for that company to perform all maintenance work. Mr Kendrick gave evidence that he would have no further involvement in the maintenance to be carried out. Any agreement by Alligator to “outsource” the maintenance is required to be reduced to writing and to be put in detail to CASA in order to obtain its response. Both issues are relevant to the question that was before the Court, but ultimately the evidence was incomplete and I could draw no firm conclusions.
I certify that the preceding one hundred and forty (140) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Murphy. |
Associate:
