Broadbent & Anor v Civil Aviation Safety Authority [1995] FCA 739

CATCHWORDS ADMINISTRATIVE LAW - Application for order of review - s 16 Administrative Decisions (Judicial Review) Act - whether an appropriate case for the Court to direct the Authority to determine a matter in a particular way CIVIL AVIATION ORDERS - Table A, clause 4.1 of Appendix 1 to section 82.0 - "Remarks" column of Table does not prescribe any minimum qualifications for approval by the Authority of a person appointed as chief pilot of an operator Administrative Decisions (Judicial Review) Act 1977 (Cth) - s 16 Civil Aviation Act 1988 (Cth) - s 27 Civil Aviation Orders Civil Aviation Regulations Federal Court Rules - O 29 r 2 Comptroller-General of Customs v ACI Pet Operations Pty. Ltd. (1994) 121 ALR 347 Followed Michael Russell Mark Broadbent & Montchel Pty Ltd v Civil Aviation Safety Authority QG 118 of 1991 Drummond J Melbourne (Heard in Brisbane) 15 September, 1995

IN THE FEDERAL COURT OF AUSTRALIA) No. QG 118 of 1991 QUEENSLAND DISTRICT REGISTRY ) GENERAL DIVISION ) BETWEEN: MICHAEL RUSSELL MARK BROADBENT First Applicant AND: MONTCHEL PTY. LTD. Second Applicant AND: CIVIL AVIATION SAFETY AUTHORITY Respondent MINUTES OF ORDERS JUDGE MAKING ORDER: Drummond J DATE OF ORDER: 15 September, 1995 WHERE MADE: Melbourne (Heard in Brisbane) THE COURT ORDERS THAT: 1. The parties shall have liberty to apply on seven days' notice to the other for directions for the further hearing of the application before Drummond J. 2. The costs of and incidental to the hearing of the separate issues shall be reserved. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA) No. QG 118 of 1991 QUEENSLAND DISTRICT REGISTRY ) GENERAL DIVISION ) BETWEEN: MICHAEL RUSSELL MARK BROADBENT First Applicant AND: MONTCHEL PTY. LTD. Second Applicant AND: CIVIL AVIATION SAFETY AUTHORITY Respondent Coram: Drummond J Date: 15 September, 1995 Place: Melbourne (Heard in Brisbane) REASONS FOR JUDGMENT The present hearing arose out of an application to review the decision made on 28 March, 1991 by Mr. Mogg, a delegate of the Civil Aviation Authority ("CAA"), to refuse the application dated 4 March, 1991 by the first applicant, Dr. Broadbent, to be appointed chief pilot of the second applicant, Montchel Pty. Ltd. ("Montchel"), and to review a second decision made on 15 May, 1992 by the CAA's delegate, Mr. Bryant, refusing a similar application dated 9 February, 1992 made by Dr. Broadbent. The Civil Aviation Safety Authority was substituted for the CAA by s. 11 the Civil Aviation Legislation Amendment Act 1995 (Cth). The applicants sought orders setting aside both decisions and orders directing the CAA to approve the appointment of Dr. Broadbent as chief pilot of Montchel. In the alternative, an order remitting the matter to the CAA for further consideration was sought. It was a condition of Montchel's Air Operator's Certificate, the authority under which it carried on its air charter business, that there should be at all times someone approved by the CAA as its chief pilot. Dr. Broadbent held that position in relation to Montchel from March 1990 until October 1990, when the CAA cancelled its earlier approval of him as chief pilot. In proceedings then commenced by the applicants to challenge that cancellation, the Administrative Appeals Tribunal ("the AAT") first stayed the cancellation decision and then, in February 1991, ruled that there was no statutory authority for the initial approval and thus of the later cancellation. See Surf Air v Civil Aviation Authority, a decision of O'Connor J as President of the AAT on 28 February, 1991. This statutory deficiency was made good by amendments to the Civil Aviation Act 1988 (Cth), to the Civil Aviation Regulations ("CAR") and to Civil Aviation Orders ("CAO"). Dr. Broadbent's applications for approval as chief pilot, the refusals of which have given rise to these proceedings, were made pursuant to the new statutory scheme. Compared with the previous year, Montchel's air charter business declined very substantially in the 1989/1990 year, a decline that continued thereafter. By July 1990, Dr. Broadbent was both Montchel's chief pilot and its only regular pilot. However, his application of 4 March, 1991 indicates clearly enough that, while it was intended that he would perform those roles, Montchel would employ casual pilots, if work was offered which Dr. Broadbent could not himself perform. The applicants contend that, for economic reasons, Montchel, a company controlled in effect by Dr. Broadbent, cannot employ any one other than Dr. Broadbent as its chief pilot. A company associated with Montchel, Gold Coast Aviation Centre Pty. Ltd. ("GCAC"), which is also controlled by Dr. Broadbent, has, however, continued to operate an air charter business with a person other than Dr. Broadbent employed as chief pilot. While GCAC's main business is running a flying school, it appears that all the limited air charter work available has been able to be performed by it. Dr. Broadbent ultimately acknowledged that the primary reason for challenging the two decisions was his concern at the impact they would have upon his personal reputation, which I take to include his reputation as a pilot. The applicants seek review of the first decision on the grounds that a breach of the rules of natural justice occurred in connection with the making of it, that it amounted to an improper exercise of the power conferred upon the CAA, that the decision involved an error of law, that there was no evidence to justify the making of the decision and, finally, that it was made in bad faith. The particulars of the breaches of natural justice that are alleged to have occurred and of the bad faith allegedly infecting the decision include allegations of actual bias against Dr. Broadbent on the part of the CAA's delegate who made this decision; the particulars include allegations that the decision, in effect, reflected the malice and spite harboured by various officers of the CAA towards the applicants and a desire to deprive Montchel of its chief pilot and thereby to cause financial detriment to it. While the grounds upon which the second decision was sought to be reviewed include allegations of breach of the rules of natural justice, improper exercise of power, error of law and absence of evidence to justify that particular decision, no allegations of bias or bad faith are made by the applicants in their attack on this decision. However, it is clear that a number of the CAA's officers who have had contact with Dr. Broadbent now harbour a deep distrust of him. It is equally clear that that attitude is fully reciprocated by Dr. Broadbent. THE ISSUES FOR DETERMINATION The litigation has had a tortuous history, with numerous interlocutory applications. In the course of one interlocutory judgment, I ruled that, while the second decision displaced the first decision in a practical sense, the applicants were entitled to maintain their challenge to the first decision. It was in order to avoid a protracted hearing that the parties, at my suggestion, decided to seek a preliminary hearing on a limited number of issues. The applicants identified what they regarded as four key issues, viz., those raised in paragraphs 4B(a)(i) and 5(vi)(g) to (i) of the amended statement of claim, and on 11 May, 1993 they and the CAA agreed to them being determined as preliminary issues. This agreement thus put to one side the questions of bias and bad faith raised by the applicants in relation to the first decision and raised for determination, as preliminary issues, the other matters, some of which were relevant to both decisions to refuse approval of Dr. Broadbent as Montchel's chief pilot. The agreed preliminary issues are as follows: (a) whether the making of the first decision was an improper exercise of the power conferred upon the CAA because, in making the decision, the CAA took into account what are alleged to have been irrelevant considerations, viz., what was referred to as the "Great Keppel Island incident of 12 September, 1990", the "ramp check at Coolangatta Airport on 13 September, 1990" and the "Great Keppel Island incident of 15 October, 1990". (b) whether the second decision is reviewable on one or other of the grounds already referred to because the CAA's delegate, Mr. Bryant, determined, in the absence of evidence to support such a conclusion, that Dr. Broadbent's pursuit of his occupation as a specialist surgeon was incompatible with him holding an appointment as chief pilot of Montchel in view of CAO 82.0 Appendix 1 para. 4.1. (c) whether the second decision should be reviewed on one or other of these grounds because the CAA's delegate "[p]laced undue weight, in the absence of evidence either affirming or refuting such contention, upon the `Keppel Island incident'", i.e., the incident occurring on 12 September, 1990. (d) whether the second decision should be reviewed because the delegate "[p]laced undue weight upon the `Kooralbyn incident' without having the benefit of a proper explanation in relation thereto by [Dr. Broadbent]". This incident occurred on 23 November, 1991. At the outset of the hearing, each party handed to me a document headed "Statement of Issues: Trial of Separate Questions" setting out each party's view of what was to be determined at the hearing of the preliminary issues. Both documents focused on the use made by the decision maker of the fact that Dr. Broadbent was in practice as a specialist surgeon; on the Great Keppel Island incident of 12 September, 1990; on the ramp check at Coolangatta Airport on 13 September, 1990; on the Great Keppel Island incident on 15 October, 1990 and on the Kooralbyn incident on 23 November, 1991. The applicants' statement of issues, however, sought a determination in relation to both decisions whether any of the four operational incidents occurred; whether in respect of any of those incidents found to have occurred they were relevant for consideration by the CAA's decision makers; and whether, in respect of any of these incidents found to have occurred, undue weight was placed on them by the CAA's decision makers. The CAA, in accordance with the agreement of the parties on 11 May, 1993, based its statement of issues on the relevant paragraphs of the amended statement of claim. If there was any ground for thinking that what may have occurred on any of these four occasions touched upon Dr. Broadbent's fitness to be chief pilot of Montchel then, irrespective of the true factual position concerning each incident, it would obviously be relevant for the CAA's delegate to have regard to the matter and to form a view of just what had occurred and whether, given the view so formed, that showed possible unfitness on the part of Dr. Broadbent to be Montchel's chief pilot. But a central issue between the parties in relation to each of these four incidents was just what had in fact occurred. I ultimately decided that, in relation to the preliminary issues, I would determine, firstly, whether, by reference to the matters relied upon by the applicants, their claim to an entitlement to have the two decisions reviewed was established. I also decided, in view of the claim made by the applicants for an order by the Court under s. 16 the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") directing the CAA to approve Dr. Broadbent as Montchel's chief pilot, that, if the applicants satisfied me of their entitlement, within the scope of the issues raised for determination as preliminary issues, to have the CAA's decisions reviewed, then I would decide whether I should go on and make findings on the factual disputes thrown up by the preliminary questions with a view to making an order under s. 16 the ADJR Act directing the CAA to grant the applicants' application or whether I should instead remit the matter to the CAA for reconsideration. This approach had the agreement of counsel for both parties. Voluminous affidavit evidence had previously been filed by both sides and extensive oral evidence was given, without objection. Moreover, both parties' final submissions were, in large part, directed to persuading me to come to factual conclusions as to exactly what had occurred on each of these four occasions. The applicants, in their statement of issues, identified the matter in issue with respect to Dr. Broadbent's medical practice as whether, in relation to the two decisions in question, Dr. Broadbent's pursuit of his medical practice was relevant for consideration by the CAA's decision makers and whether it prevented him from fulfilling the responsibilities of chief pilot of Montchel. The CAA identified this matter as relating only to the second decision and as involving the determination, as a separate question, whether the CAA had concluded, in the absence of evidence to support such a contention, that Dr. Broadbent's pursuit of his medical practice was incompatible with the requirements of Appendix 1 to CAO 82.0. Although the applicants did not in their statement of claim challenge the reliance on this consideration by the CAA's delegate who made the first decision, it is I think appropriate to amend the pleading to the extent necessary to raise this as an issue for separate determination in respect of the first decision also. Although I directed on 11 May, 1993 that the four issues I have referred to were to be determined as separate issues in reliance on O. 29, r. 2 the Federal Court Rules, the applicants contended in their closing submissions that I should not make any formal orders. They acknowledged that I should make findings of fact in relation to the various issues; but they submitted that it would be inappropriate for me to go on and make formal orders at this stage of the litigation, although they expressed the hope that my factual findings might enable the parties to resolve the entire litigation. The CAA's position was that if I made findings of fact on what had taken place on the four occasions in question that were adverse to the applicants, then I should dispose of the entire proceeding: in such a situation it would serve no purpose, so the CAA submitted, to investigate in another phase of the litigation whether the CAA's decision making processes were flawed, since I would necessarily have concluded that Dr. Broadbent was not fit to be Montchel's chief pilot. The CAA's decisions of 28 March, 1991 and 15 May, 1992 On 4 March, 1991 Dr. Broadbent applied to be approved as chief pilot of Montchel, which traded as "Surf Air". The CAA's delegate, Mr. Mogg, made the following decision: "Your application is rejected on the grounds that you fail to satisfy a requirement of Civil Aviation Orders Section 82.0, Sub Section 5, Sub Paragraph 5.1(a) in that you have not maintained a satisfactory record in the conduct or management of flying operations. ... Reports of incidents which occurred when you were ostensibly Chief Pilot of Surf Air and available to me are: I. VH-JCI at Great Keppel Island on 12 September 1990. Your Pilot, Mr L McNiell (sic), took off overloaded from Coolangatta, showing that either he was not properly trained, or he did not know of the alternatives available to him. The aircraft took off from Coolangatta in an overloaded situation, by approximately 120 kg, in contravention of Civil Aviation Regulation 233(1) and your Company Operations Manual, Section A3, Subsection 3.8. II. VH-ARJ at Coolangatta on 13 September 1990. Your pilot, Mr P W McGrew, was loading the aircraft in preparation for take off. It was subjected to a ramp check and, by the pilot's own calculation was approximately 320 kg overweight, in contravention of Civil Aviation Regulation 233(1) and your Company Operations Manual, Section A3, Subsection 3.8. III.VH-LAF at Great Keppel Island on 15 October 1990. Your pilot, Mr Aubort, admitted to refuelling from a drum without carrying out the necessary fuel contamination checks in accordance with Civil Aviation Order Section 20.9 Paragraph 3.3. Apart from the above, I am not convinced that you would be able to devote your attention full time to the duties of Chief Pilot. I have considered the submissions you made on this point in your letter of 12 March 1991. However, you have a full time medical practice and active interests in two other aviation companies, gold (sic) Coast Aviation Centre and Aircraft Engineers Associates. Your submissions were insufficient to convince me that you could reconcile these other interests with the responsibilities of Chief Pilot of Surf Air. From this documentary evidence now available to me and these reports of incidents, I have concluded that you are not capable of: 1. Controlling all flight crew training and operational matters affecting the safety of the flying operations of Surf Air. 2. Ensuring that Surf Air's air operations were being conducted in compliance with the Regulations and Civil Aviation Orders. 3. Ensuring compliance with the loading procedures specified for the aircraft. It is on these grounds that, with regret, I cannot approve your application."