![Caper Pty Ltd T/A Direct Air Charter and Civil Aviation Safety Authority [2011] AATA 181 (21 March 2011)](http://data.docslib.org/img/c63901b62c165b196f97a32e3bbeb095-1.webp)
Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
[Home ] [ Databases ] [ WorldLII ] [ Search ] [ Feedback ] Administrative Appeals Tribunal of Australia
You are here: AustLII >> Databases >> Administrative Appeals Tribunal of Australia >> 2011 >> [2011] AATA 181
[Database Search ] [ Name Search ] [ Recent Decisions ] [ Noteup ] [ Download ] [ Context ] [ No Context ] [Help ]
Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authority [2011] AATA 181 (21 March 2011)
Last Updated: 22 March 2011
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/3851
GENERAL ADMINISTRATIVE DIVISION ) Re CAPER PTY LTD T/a DIRECT AIR CHARTER
Applicant
And CIVIL AVIATION SAFETY AUTHORITY
Respondent
CORRIGENDUM
Tribunal Mr Egon Fice, Senior Member
Date 22 March 2011
Place Melbourne
Senior Member Fice made a Decision under s 43 of the Administrative Appeals Tribunal Act 1975 (the Act) on 21 March 2011.
The Tribunal was advised on 22 March 2011 that there is an error in paragraph 12 of the reasons for decision.
In accordance with s 43AA(1) of the Act, the Tribunal directs that the text in the reasons for decision be altered in the following way:
1. deleting the following words in paragraph 12:
1 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
The Cessna 310 is a five seater single engine aircraft
and replacing them with
The Cessna 310 is a five seater twin engine aircraft
...... [sgd] Egon Fice...... Senior Member
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 181
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/3851
GENERAL ADMINISTRATIVE DIVISION ) Re CAPER PTY LTD T/a DIRECT AIR CHARTER
Applicant
And CIVIL AVIATION SAFETY AUTHORITY
Respondent
DECISION
Tribunal Mr Egon Fice, Senior Member
Date 21 March 2011
Place Melbourne
Decision The Tribunal sets aside the decision of the Civil Aviation Safety Authority dated 7 September 2010 and instead determines that the conditions on the Air Operators Certificate of Caper Pty Ltd trading as Direct Air Charter remain unaltered. Caper Pty Ltd trading as Direct Air Charter is permitted to continue with its charter operations between Darwin and Bathurst Island.
...... [sgd] Egon Fice...... Senior Member
CIVIL AVIATION – air operators certificate – charter operations – aerial work operations – show cause notice – regular public transport – stay – Darwin and Bathurst Island – tour – safety of air navigation – open charter – closed charter – fixed terminals – fixed schedules – accommodation
2 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
available for use by persons generally – private charters – regulatory policy – departmental policy – members of the public – general public – trade and commerce – airlines agreement
Commonwealth Constitution s 51
Administrative Appeals Tribunal Act 1975 ss 37 , 41 (2)
Airlines Equipment Act 1958
Air Navigation Act 1920 s 26
Australian National Airlines Act 1945
Civil Aviation Act 1988 ss 27 , 27 (9), 27A , 28 , 28BA (3), 28BB , 31A , 98
Civil Aviation Agreement Act 1952
Civil Aviation Agreement Act 1957
Air Navigation Regulations 1947 rr 191,191(c), 191(c)(i), 191(c)(ii) 199, 199(4)
Civil Aviation Regulations 1988 rr 206, 206(1)(b), 206(1)(b)(i), 206(1)(b)(ii), 206(1)(c)
Ansett Transport Industries Ltd v Morris and Another (1986) 18 FCR 527
Attorney-General (WA) v Australian National Airlines Commission [1976] HCA 66 ; (1976) 138 CLR 492
Australian National Airways Pty Ltd v Commonwealth (No 1) [1945] HCA 41 ; (1945) 71 CLR 29
Chegwidden v White (1985) 38 SASR 440 ; 50 ALR 548; 81 FLR 168
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179 ; (1979) 2 ALD 634
Re Coral Sea Airlines Pty Ltd and Civil Aviation Safety Authority [1999] AATA 329
Southern Cross Airlines P/L v McNamara (1989) 97 FLR 72
Civil Aviation Safety Authority , Regulatory Policy – CEO-PN007-2009: Classification and Regulation of ‘Closed-Charter’ Operations under CAR 206(1)(b)(ii), Issue 1, July 2009
Chambers 21st Century Dictionary
3 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
The Shorter Oxford English Dictionary
‘The World Book of Word Power’ (1991) Volume 1
Geoffrey K. Pullum ‘50 years of stupid grammar advice’ (17 April 2009) The Chronicle of Higher Education, The Chronicle Review
REASONS FOR DECISION
21 March 2011 Mr Egon Fice, Senior Member
1. Caper Pty Ltd trading as Direct Air Charter (Caper) is the holder of an Air Operators’ Certificate (AOC) which authorises it to conduct charter operations and aerial work operations. Included under its aerial work operations is the authority to conduct flying training. Caper trades under various names, including Dasar Coastwatch, Direct Air Charter and National Aerospace training. 2. On 12 May 2010 the Civil Aviation Safety Authority (CASA) served a Notice of Proposed Action (the show cause notice) indicating it intended to suspend or cancel Caper’s AOC. CASA issued the show cause notice because it had reason to believe that Caper was conducting regular public transport (RPT) operations between Darwin and Bathurst Island. Caper’s AOC did not authorise it to conduct RPT operations. 3. On 7 September 2010 CASA issued a notice to Caper indicating it had decided to cancel one of the authorisations contained in Caper’s AOC under s 28BA(3) of the Civil Aviation Act 1988 (the Act). The authorisation cancelled was that which permitted charter flights between Darwin and Bathurst Island. 4. Caper lodged an application seeking review of CASA’s decision on 7 September 2010. Having done so, the automatic stay provisions set out in s 31A of the Act applied. CASA’s decision was stayed for a period of 90 days or for such period of time as the Tribunal might order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (AAT Act) . 5. Caper lodged a stay application under s 41(2) of the AAT Act and on 11 October 2010, the Tribunal ordered that the decision made by CASA on 7 September 2010 be stayed until this application was heard or determined, or until further order of the Tribunal. As at the date of making this decision, there has been no further order made by the Tribunal. 6. The issues which I must determine are: (a) whether Caper conducted RPT operations between Darwin and Bathurst Island; and (b) if the answer to (a) is in the affirmative, whether the Civil Aviation Regulations 1988 (the CAR) dealing with charter operations are validly made under the Act.
CAPER’S OPERATIONS BETWEEN DARWIN AND BATHURST ISLAND
7. AAT Australian Adventure Tours Pty Ltd (Australian Adventure Tours) is a wholly owned subsidiary of AAT Kings Coach Company Pty Ltd. Although I did not have the company search of AAT Kings Coach Company Pty Ltd before me in evidence, there appeared to be no dispute that AAT Kings Coach Company Pty Ltd and AAT Kings Tours Pty Ltd are part of the AAT Kings group of companies, all of which appear to be subsidiaries of AAT Kings Tours International Limited. 8. Under an agreement made in 2003, Aussie Adventure Holidays Pty Ltd sold its business to Australian Adventure Tours, including the business of operating tours of the Tiwi Islands. Among the business names attached to the contract of sale, was the registered business name
4 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
Tiwi Tours . 9. Tiwi Tours advertises one day tours of Bathurst Island, which is immediately to the north of Darwin. The one day tour of Bathurst Island includes transport to and from the island by Caper, trading as Direct Air. The brochure advertising the Tiwi Tours states that flights operate between Darwin and Bathurst Island between Monday and Friday from the Direct Air terminal. Check in time is said to be 7.30am for an 8.00am departure and the return to Darwin airport is said to be at approximately 5.15pm. The costs of the tour are broken down into the land content and the return flight from Darwin. The tour, which includes the flight to and from Bathurst Island, involves a guided tour of the Aboriginal community of Nguiu including a museum and displays of traditional art. There are performances by local Aboriginals including a smoking ceremony. The tour also includes a drive through the Bathurst Island wilderness and lunch at a local waterhole, where tourists are able to swim. These tours on the island are conducted by mini-bus or four-wheel drive vehicle. 10. Mr Brett Binns is the sales manager in the Northern Territory for AAT Kings. He is based in Darwin. Mr Binns testified that AAT Kings conducts tours to various parts of Australia, including those advertised as Tiwi Tours from Darwin to Bathurst Island. He said that AAT Kings contracts with Caper, trading as Direct Air Charter, to provide charter flight services as and when required by AAT Kings to carry groups of people on tours to and from Darwin to destinations, including Bathurst Island. 11. In a statement made on 25 October 2010, Mr Binns said that AAT Kings had a written service contract rates agreement with Direct Air for charter flights to and from Bathurst Island for various types of aircraft. However, Mr Binns said in his evidence-in-chief that although there was a contractual arrangement with Direct Air, it was not an exclusive agreement. If Direct Air could not provide an aircraft, AAT Kings had the right to obtain the services of another charter operator. 12. I also had in evidence before me a price list prepared for the 2009 tourist season. There was an email from Mr Mark McLaughlin, who is the director of Caper, indicating charter charge out rates per aircraft for a Cessna 210, Cessna 310, Cessna 402 and Piper PA31 aircraft. The prices in that email are reflected in an AAT Kings document which was signed by Mr McLaughlin. In fact the different types of aircraft have different seating capacity and are either twin engine aircraft or single engine aircraft. The Cessna 210 is a five seater single engine aircraft and commands the lowest rate of $840. The Cessna 310 is a five seater single engine aircraft and is charged out at $1,310. The twin engine Cessna 402 and Piper PA31 aircraft have nine seat capacity and were charged out at $1,695 per return flight to Bathurst Island. A five per cent fuel charge was added to each of those rates. 13. Mr Ian Harvey of counsel, who appeared on behalf of CASA, sought an explanation from Mr Binns as to why the Tiwi advertising brochures recorded separately the land content of the tour and the flight to and from Bathurst Island. Mr Binns said that the commissions paid by AAT Kings to agents who procure passengers for those tours was based on only the price of the tour itself, and not the airfare. Hence the pricing structure set out in the brochures. 14. Mr McLaughlin provided a statement dated 5 October 2010 which was admitted into evidence. In that statement he said that the contract between Caper and AAT Kings required Caper to provide an aircraft and pilot to carry passengers belonging to a tour group organised and provided by AAT Kings to Bathurst Island and return as part of an art tour. Mr McLaughlin testified that AAT Kings notified Caper of the dates on which the flights were required and the number of passengers in each group. The size and type of aircraft provided by Caper is determined by the number of passengers. Mr McLaughlin testified that Caper charged AAT Kings for the entire aircraft, regardless of the passengers carried, in accordance with their current contracted rates per aircraft. Mr Binns confirmed the arrangement stating that requests for travel on the tour flights were made through AAT Kings and AAT Kings received payments directly from passengers. Passengers do not pay Caper nor can they travel on those flights other than as part of the tour group. 15. In cross-examination Mr McLaughlin was taken to an email request from Mr Binns about the fuel surcharge which Caper intended to apply to its price schedule in 2008. Mr Binns had
5 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
suggested that passengers pay the fuel surcharge directly to Caper upon checking in for the charter flight. In a return email, Mr McLaughlin rejected that suggestion and recommended that, if that charge was to be taken separately from the fee for the tour, it could be collected by a member of AAT Kings staff. Mr McLaughlin confirmed that the notion of Caper collecting the money for the fuel surcharge was rejected. Mr McLaughlin also explained how the arrangement between AAT Kings and Caper operated on a day-to-day basis. 16. He said that AAT Kings rings Caper at the end of the day immediately preceding departure of a flight for Bathurst Island, providing the passenger details. Caper then decides which aircraft to use on the following day, depending upon the number of passengers to be carried. The only information received by Caper is the details of the passengers and any luggage. Caper is not involved in any way in the tour once the passengers are on Bathurst Island. 17. Mr McLaughlin also testified that if a person rang Caper wanting to fly to Bathurst Island, they were told to contact AAT Kings in order to make a booking. Caper staff did not deal directly with those passengers. The evidence given by Mr McLaughlin and Mr Binns had in fact been tested by CASA utilising the services of one of its investigators who travelled to Darwin and made a booking for a Tiwi tour as if he were a tourist. This person was Mr Noel Saffery. He provided a written statement dated 17 December 2010 and he also gave oral evidence. There were also two reports prepared by Mr Saffery on 22 December 2009 and 26 March 2010 which were included in the s 37 documents. 18. On 18 March 2010 Mr Saffery booked a tour of the Tiwi Islands through the AAT Kings (Aussie Adventures) website. He indicated he wished to travel on 22 March 2010. On the following day, he received a confirmation of his booking by email for the tour on 22 March 2010. However, later on 19 March 2010, he received a telephone call from AAT Kings during which the representative of the tour operator told Mr Saffery that he was the only passenger booked on the tour on the day he had selected and that the tour would only go ahead if there were two or more persons wishing to take the tour. Mr Saffery was asked if he was prepared to go on the tour on the 25th of March 2010 and he said he was. Late on 19 March 2010 he received an email from AAT Kings confirming the flights for his tour on 25 March 2010. He was required to pay for the tour immediately and the total price for the tour inclusive of the airfare, $449, was paid to AAT Kings. 19. On 25 March 2010 Mr Saffery attended the office of Caper and found himself on a tour of Bathurst Island with four other passengers. Their luggage was weighed and they were escorted to a Cessna 210 aircraft. Mr Saffery noted that visitors to the island are only permitted with the approval of the Northern Territory Land Council. Mr Saffery also observed another aircraft on Bathurst Island which, he said, was operated by Hardy Aviation. He said that company operated a RPT service which was used by workman from the mainland. Mr Saffery went on the tour as advertised. On completion, he was asked to complete a feedback form. One of the questions on that form was how the passengers rated the airline service. Mr Saffery also conferred with his fellow tourists and discovered that they had booked their tours by various means, but generally through travel agents. One of the tourists booked her trip locally in Darwin. However, none of the other tourists booked or purchased their tour through Caper. A bus was used to transport the tourists when on the island. 20. In his first report dated 22 December 2009, Mr Saffery said that he attended the offices of AAT Kings, trading as Aussie Adventures. Staff at that office confirmed that they provided day trips to the Tiwi Islands and they also told Mr Saffery that only members’ of the tour group were able to purchase seats on the flight to and from the island. 21. In cross-examination, Mr McLaughlin was referred to the terms and conditions issued by Caper to Mr Saffery following his booking of a tour of Bathurst Island. Mr McLaughlin said he did not recall ever seeing those terms and conditions previously and that he had not had discussions with representatives of Caper regarding those terms and conditions relating to the tour. His attention was nevertheless drawn to the terms 1-4 and 15(a). 22. Clause 15(a) defines the expression Company as Aussie Adventure Holidays Pty Ltd and/or the contracted air services supplier. Clauses 1-6 deal specifically with the air portion of the travel on tour as does clause 13. Of some significance is the fact that although Mr McLaughlin said his
6 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
company was not a party to reaching an agreement about the terms and conditions for the carriage of tourists on the Darwin to Bathurst Island tour, the times of departure and arrival of flights was said not to be guaranteed. The terms and conditions also provide that the company at its sole and absolute discretion may cancel, reschedule or delay any flight even if confirmation of booking has been given to a passenger. It is clear that the terms and conditions appear to have been adopted by AAT Kings from other operations as they refer to passengers being taken to the next practical port of call if a pilot is not able to land at a particular airport. While I have no doubt that clause could be adopted in the event that an aircraft is unable to land at Bathurst Island after departing Darwin, the most likely course that would be taken by such an aircraft would be to return to Darwin. 23. The evidence provided by Mr McLaughlin, Mr Binns and Mr Saffery appears to be consistent. It discloses that: (a) AAT Kings and Caper are not related entities having discrete directors and shareholders; (b) Caper provides aircraft for AAT Kings to enable it to carry tourists to and from Bathurst Island in the course of its organised tours of Aboriginal arts and other sites of interest; (c) although the costs of the tour are advertised indicating the tour and airfare components as discrete items, the combined price is paid by intending tourists to AAT Kings only; (d) although the travel brochures prepared by AAT Kings state that the flights depart Darwin between March and November, Monday to Friday at 8.00am, that does not mean that the flights will necessarily take place at that time on every day; (e) whether or not a flight is undertaken by Caper for AAT Kings depends on the number of tourists who have booked a flight on any particular day on which they wish to undertake the tour; (f) tours are generally booked through travel agents or through AAT Kings in Darwin direct, but Caper does not take any bookings or receive directly any money for the transport of passengers; (g) the persons to whom the tours are open are members of the public at large; (h) Caper has a contractual arrangement with AAT Kings, which is regularly reviewed, regarding the price which AAT Kings is to pay Caper for the hire of its aircraft on an aircraft by aircraft basis; (i) persons who are not booked on an AAT Kings’ tour are not permitted to travel on aircraft which have been booked by AAT Kings for their tours; (j) the size and type of aircraft provided by Caper is determined by the number of passengers on any particular day which is notified to Caper on the day prior to the flight; (k) if no tourists are booked on a particular day or if there are insufficient tourists booked for a particular day, the flights do not take place and in fact passengers, such as Mr Saffery, are offered an alternative day on which they can undertake the tour; and (l) the terms and conditions of carriage between AAT Kings and Caper, which are set out in AAT Kings information statement following the booking of a flight, have not been discussed with or agreed to by Caper.
THE CHARTER/RPT DISTINCTION
24. Section 27 of the Act provides that CASA may issue AOC’s for the purposes of its functions. In fact, except as authorised by an AOC or a permission under s 27A, an aircraft is not permitted to operate in Australian Territory if its operation is for prescribed purposes. Those purposes are prescribed in CAR 206. Section 98 of the Act provides that the Governor-General may make regulations, not inconsistent with the Act, regarding, amongst other things: (a) the carrying out and giving affect to the provisions of the Chicago Convention relating to safety; (b) the safety of air navigation within a Territory or to or from a Territory; (c) the safety of air navigation, being regulations with respect to trade and commerce with
7 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
other countries and among the States; and (d) the safety of air navigation, being regulations with respect to any other matter with respect to which the Parliament has power to make laws. 25. Insofar as it is relevant to Caper’s case, CAR 206 provides:
(1) For the purposes of subsection 27 (9) of the Act, the following commercial purposes are prescribed: (a) ... (b) charter purposes, being purposes of the following kinds: (i) the carriage of passengers or cargo for hire or reward to or from any place, other than carriage in accordance with fixed schedules to and from fixed terminals or carriage for an operation mentioned in subregulation 262AM (7) or under a permission to fly in force under subregulation 317 (1); (ii) the carriage, in accordance with fixed schedules to and from fixed terminals, of passengers or cargo or passengers and cargo in circumstances in which the accommodation in the aircraft is not available for use by persons generally; (c) the purpose of transporting persons generally, or transporting cargo for persons generally, for hire or reward in accordance with fixed schedules to and from fixed terminals over specific routes with or without intermediate stopping places between terminals.
26. The first matter which I need to address is the distinction between CAR 206 (b)(i) and (b)(ii). The two types charter referred to in those subsections are commonly described as open charter (b)(i), and closed charter (b)(ii). The distinction is that an open charter is one where passengers or cargo are carried where there are no fixed schedules or, in other words, on an on demand basis. The closed charter situation arises where the carriage of passengers or cargo occurs in accordance with fixed schedules and between fixed terminals . 27. The expression fixed schedules is not defined in the regulations and therefore it must be given its ordinary meaning taking into account the context in which the expression appears in the regulation. The adjective fixed means:
1. fastened; immoveable. 2. unvarying; unchanging; set or established □ fixed ideas. (Chambers 21st Century Dictionary)
The noun schedule is defined as:
1. a list of events or activities planned to take place at certain time. 2. the state of an event or activity occurring on time, according to plan □ we are well behind schedule. 3. any list or inventory. 4. a timetable or plan.
The first question then is whether the flights Caper conducts for AAT Kings can be said to be according to a fixed schedule.
28. The brochures advertising Tiwi Tours clearly state that between March and November, flights depart from Darwin for Bathurst Island at 8.00am on Monday to Friday. However, as the evidence of Mr Saffery clearly disclosed, where there are insufficient persons booked for a tour on a particular day, the intending passenger is asked to fly on another day. The evidence of Mr McLaughlin and Mr Binns was that flights only take place where two or more passengers on any particular day wish to avail themselves of the Bathurst Island tour. Therefore, while the advertising brochures clearly suggest unchanging or established activities taking place at certain times, in practice, something quite different occurs. 29. Nevertheless, the expression fixed schedules is a reference to an unvarying or unchanging timetable or plan. It is not a reference to what in fact occurs on any particular day. AAT Kings
8 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
plans to fly everyday between Monday and Friday between the months of March and November, departing at 8.00am for Bathurst Island. In my opinion, that satisfies the expression fixed schedules . The fact that flights take place only when sufficient passengers are available does not alter my opinion. CAR 206(1)(b) is concerned only with the plan or timetable when it refers to fixed schedules rather than what in fact occurs on any particular day. Therefore, I find that Caper’s operations when conducting flights for AAT Kings to Bathurst Island are in accordance with fixed schedules. Those operations are either closed charters or RPT. 30. The next expression in CAR 206 which needs to be understood is fixed terminals. Again, this expression is not defined in the CARs. I confess to having difficulty in understanding this expression and its purpose in the context of CAR 206. That may be because the word terminal is commonly used in the aviation industry to describe a building or structure at an airfield. However, I do not believe that is the intended meaning as the expression is used in the CAR. It is more likely to be a reference to a boundary or terminus. In other words, it is the end of a route, not merely an intermediate stopping place. My researches indicate that the expression can be traced back to the Air Navigation Regulations 1947 , following the introduction of air service licences for those persons carrying passengers or cargo for hire or reward. Those regulations were made under the Air Navigation Act 1920 (the Air Navigation Act ). 31. The High Court was called upon on a number of occasions to deal with the constitutional validity of a number of Acts following the establishment of Australian National Airways Pty Ltd, a Commonwealth owned entity which operated the airline referred to as TAA; later becoming Australian Airlines. Under the Australian National Airlines Act 1945 (the ANA Act), TAA was authorised to provide airline services between any place in a State and any place in another State; between any place and any Territory of the Commonwealth and any place in Australia outside that Territory; and between any place in any Territory of the Commonwealth and any other place in that Territory. The Commonwealth relied on s 51 of the Commonwealth Constitution (the Constitution) to legislate in respect of air travel among the States. Section 51 of the Constitution empowers the Commonwealth to make laws with respect to trade and commerce among the States and with foreign countries, although it contains no reference to the Territories. Furthermore, on the establishment of TAA, the Commonwealth sought to ensure that the airline was able to provide proper service on the routes on which it was authorised to fly, and that it was able to do so profitably. It was, effectively, granted a monopoly over particular routes. 32. The Air Navigation Regulations were amended to give effect to that monopoly. In fact, r 191(c) in the 1947 Air Navigation Regulations provided:
(c) Charter operations, being all air service operations in which aircraft are used for the carriage of passengers or cargo for hire or reward, on demand, to or from any place, but which are not conducted to fixed schedules to and from fixed terminals, or on two or more occasions within any period of four weeks over a route, or section of a route, on which a regular public transport service is operating; ...
33. The reference in r 191(c) to fixed schedules and fixed terminals appears to be a response to the prohibition, although not absolute, of charter operations being conducted along routes or sections of routes where TAA operated. This was explained by Dixon J in Australian National Airways Pty Ltd v Commonwealth (No 1) [1945] HCA 41 ; (1945) 71 CLR 29 where his Honour said, at 87:
The short effect of these provisions when read together appears to me to be, so far as material, to require the Commission, on obtaining a licence, to supply an adequate service for the route licensed, and then, when and so long as that is done, to exclude any other interstate air carrier from the same stopping places by preventing his holding a licence effective for any of them. The principle upon which they proceed evidently is that facilities for the carriage by air for reward of persons and things should be assured,
9 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
so far as may be, but that, so long as that is done, they should be an exclusively governmental function.
34. An example of the operation of the regulations dealing with air service operations can be found in Attorney-General (WA) v Australian National Airlines Commission [1976] HCA 66 ; (1976) 138 CLR 492. That case involved Ansett Transport Industries (Operations) Pty Ltd seeking declarations about the invalidity of a certain section of the ANA Act. TAA proposed to commence a regular airline service between Perth and Darwin, with an intermediate stop at Port Hedland. Prior to Ansett’s rise and interest in the route between Perth and Darwin, TAA had not conducted a regular airline service between Perth and Darwin. It proposed to commence that service stopping at Port Hedland for economic reasons, because it seemed that the direct service between Perth and Darwin would be uneconomical. On the other hand, Ansett was then operating a regular airline service between Perth and Darwin with intermediate stopping places in the northern regions of Western Australia, and in particular at Port Hedland. The Director- General issued a licence to TAA which authorised it to conduct RPT operations between the fixed terminals of Darwin and Perth. It also provided for intermediate stopping places between those terminals which were, from time to time, approved by the Director-General. From this information, I have gleaned that the expression fixed schedules to and from fixed terminals, the expression used in the Air Navigation Regulations , was related to the advertised operations by an airline indicating the departure point and ultimate destination. Any intermediate landing places are not fixed terminals in that sense. I suspect that the planned operations by TAA between Darwin and Perth were stated to be flights from Darwin to Perth via Port Hedland. 35. Quite plainly there are no proposed or even possible intermediate stopping places between Darwin and Bathurst Island. It follows that the expression fixed terminals is a reference to those two terminals. Therefore, I find that Caper conducted operations involving the carriage of passengers or cargo for hire or reward in accordance with fixed schedules to and from fixed terminals. 36. The only remaining issue with CAR 206(1)(b) is whether the circumstances in which Caper carries passengers and or cargo to Bathurst Island fall within the description: in which accommodation in the aircraft is not available for use by persons generally. This expression is to be distinguished from that used in CAR 206(1)(c) which is: the purpose of transporting persons generally, or transporting cargo for persons generally. These two adverbial clauses have been the cause of numerous disputes regarding the distinction which should be drawn between RPT and charter operations. Both clauses are governed by the word generally, an adverb. The word generally is defined as:
1. usually. 2. without considering details; broadly. 3. as a whole; collectively. (Chambers 21st Century Dictionary) 3. In a general sense or way; as opp. to specially. ( The Shorter Oxford English Dictionary)
An adverb is a word which describes or adds to the meaning of a verb, adjective or another adverb. It does not qualify or add meaning to a noun, such as the word person or persons . As the authors of the text The World Book of Word Power (1991) Volume 1 state:
Adverbs usually answer the question How? When? Where? or To what extent?
The adverb in this case, generally, answers the question to what extent? Commonly, the adverb is placed immediately before the verb or adjective in a sentence or clause. However this is not necessarily the way sentences are always constructed. As Geoffrey K. Pullum has written in The Chronicle of Higher Education, The Chronicle Review 17 April 2009, placing the adverb before the verb actually de-emphasises the adverb. He cites the example:
The Dean’s statements tend to completely polarize the faculty.
10 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
This places the stress on polarising the faculty (the word completely of course is the adverb). He explains that the way to stress the completeness of the polarisation would be to write:
The Dean’s statements tend to polarize the faculty completely.
In fact, that is the way in which the two clauses I have referred to above are constructed. The adverb generally , in the first clause, emphasises the availability for use by persons of accommodation in the aircraft while in the second clause, it emphasises the transport of persons or cargo. The word transporting is of course, strictly speaking, a gerund as it describes the action. However, nothing turns on that. In my opinion, it follows that the two clauses when read according to their grammatical construction, refer to general availability for use by persons and the general transport of persons or cargo. In the context in which it appears in the two clauses, the word generally means broadly or in a general sense or way, as opposed to specially. It says nothing about the persons.
37. Having explained some elementary rules of grammatical construction, it should be apparent that the first clause (CAR 206(1)(b)(ii)) means that a closed charter is one in which accommodation on the aircraft must not be available to those people who are only using the aircraft to travel from destination A to destination B. Such persons do not have a common purpose for travel to destination B. Their reasons for using the aircraft are simply to arrive at a common destination and then to undertake any variety of individual activities depending upon what each passenger had in mind was the purpose of his or her travel. 38. To fall within the closed charter provision under CAR 206(1)(b)(ii), those persons who travel to a destination terminal must all have the same special purpose for travelling to that destination. In my opinion, that is what distinguishes a closed charter from RPT. For example, mining companies and off-shore oil companies in the north west of Western Australia operate charter flights to and from Perth for their employees on a regular basis. All of the persons on board those charter aircraft are being transported to their destination terminal so that they can conduct their work for the company which has chartered the aircraft or an associated entity. Their purpose is common even though their occupations may vary. The company may also allow non-employees to utilise the transport, so long as the use bears some relationship to the work being undertaken by the company. Other than the common purpose for undertaking a flight, those persons who travel by closed charter may have no other relationship with their fellow travellers. 39. Unfortunately, I have not come across any material which would indicate that the two clauses I have referred to above in CAR 206 have undergone any proper analysis having regard to their grammatical construction. It therefore comes as no surprise to me that the interpretation of those clauses by CASA, and by Tribunals and Courts, may not be in accordance with the opinions I have expressed above. It seems to me that this has led to distinctions being drawn between certain operations which, not only make no sense, but also have nothing whatsoever to do with aviation safety. 40. CASA has published what is described as Regulatory Policy regarding the classification and regulation of closed charter operations under CAR 206(1)(b)(ii). That policy document is signed by Mr John F McCormick, who is the Director of Aviation Safety. It was issued in July 2009 and reviewed in July 2010. It is properly described as Departmental Policy as distinct from Ministerial Policy. In its reasons for making the policy, CASA has indicated that the current distinction between charter and RPT will soon disappear and be replaced by one category, Passenger Transport. However, this has not yet occurred. The policy document purports to provide clear guidance on the classification of operations as closed charter or RPT and the limitations and condition which may necessarily be imposed on certain kinds of closed charter operations. 41. Quite correctly, CASA has identified that of all the elements which are required to support closed charter operation, the adverbial clause which I have analysed above has proven to be most problematic. CASA has also identified the problem of what it describes as the interposed entity. CASA describes the interposed entity as an entity placed between a charter operator and the passengers who travel on the aircraft. The interposed entity is said to sell individual
11 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
portions of its accommodation on the aircraft to passengers. The policy document explains that the interposed entity may be unconnected with a charter operator and therefore the individual passengers who travel on such charters only have a contractual arrangement with the interposed entity, and not the charter operator. The policy document then states:
On this basis, it may also be said that the operator has not made accommodation on the aircraft available to persons generally, since it has made accommodation available only to the entity.
The problem with this statement should be immediately apparent. It is a paraphrasing of the adverbial clause although the word use is omitted. The clause in fact deals with the general availability for use of the aircraft by persons, and not making accommodation available to persons generally. With respect to the drafter of the policy document, it is this type of interpretation, ie. reading the adverb generally as qualifying the noun persons, which has caused difficulty in understanding the closed charter provision . It has led CASA to conclude:
In such cases, especially where the entity is a travel or booking agency that advertises and sells seats on the aircraft it has chartered to anyone who is prepared to pay the cost for a seat, it is CASA’s view that the operator and interposed entity are part of a single enterprise, effectively offering accommodation on the aircraft for use by persons generally.
42. The policy document provides an example of charters which may genuinely be classified as charters, that is, although the passengers who fly are not necessarily the persons who have chartered the aircraft, the passengers will normally have a prior relationship involving elements other than the air travel. CASA cites the example of a church which organises regular trips for its congregants to a particular location for the purpose of attending religious retreats, where the attendance at the retreats is limited to church members exclusively. CASA considers those types of charters to fall with CAR 206(1)(b)(ii). CASA then expresses its concern about interposed entities in the following way:
Indeed, it is not unusual to find purportedly ‘closed’ groups that have been created solely for the purpose of providing a conduit through which members of the public (i.e., persons generally) might be funnelled onto an aircraft.
This statement clearly highlights the fact that CASA has mistakenly understood the adverb generally to qualify the noun persons. With the greatest respect, it cannot and it does not do that. It is simply a grammatical error to read the adverbial clause in that way. It is not surprising therefore that this has led to some remarkable contortions in reasoning when attempting to distinguish a genuine charter from RPT. CASA’s policy document provides the following example:
Even in otherwise straight-forward situations, problematic questions relating to the characterisation of the passenger group can arise. It is conceivable that a legitimately ‘closed’ group may consist of a large number of members. Conversely, a very small passenger group may well have a general and unrestricted membership. Demonstrably discrete, special and enduring characteristics shared by members of a group (e.g. hair colour) may have no real bearing on the propriety of characterising such a group as ‘closed’ for the purposes of classifying an aerial service operation. Characterisations based on arguably legitimate, social or economic purposes – for example, ensuring that members of remote communities are able to obtain the services of tradesmen on a regular and predictable basis; or facilitating visits of family and friends to miners located at a great distance from their homes for extended periods of time –
12 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
may involve conflicting values. For example, while it surely a “good thing” to facilitate air travel to and from remote Aboriginal communities, it may not be such a good thing to allow what amounts to RPT services for members of those communities to be conducted at a reduced level of safety
43. What appears from CASA’s analysis of CAR 206(1)(b)(ii) is that unless the persons purportedly chartering an aircraft have some identifiable and close relationship, although that relationship may or may not be relevant for the purposes of characterising the charter, if the flight is conducted in accordance with fixed schedules and between fixed terminals , it is an RPT operation. That, in an unexplained way, is said to reduce the level of safety. Quite plainly, this makes no sense. Whether the passengers who fly on these aircraft have some pre-existing relationship makes no difference to the safety of that operation. If CASA’s concern is with the numbers of passengers carried or the frequency of flights, it can impose conditions on an AOC under s 28BB of the Act. 44. Attached to CASA’s policy statement are references to a number of cases which are said to have dealt with the distinction. The first of these is a Tribunal decision in Re Coral Sea Airlines Pty Ltd and Civil Aviation Safety Authority [1999] AATA 329. In that case, Deputy President Dr Gerber simply recited the provision in CAR 206(1)(b)(ii). He then found the evidence disclosed that persons who were carried as passengers by Coral Sea Air were persons who simply wanted to travel from destination A to destination B. They had no common purpose for undertaking the flight. That case does not assist in understanding the provisions in that regulation. 45. CASA also referred to the case Southern Cross Airlines P/L v McNamara (1989) 97 FLR 72 , which was a decision of the Supreme Court of South Australia (Bollen J) on appeal from a Magistrate who convicted the appellants of breaches under the Air Navigation Regulations . CASA’s policy document states that Justice Bollen observed that in an appeal from a Magistrate in Chegwidden v White (1985) 38 SASR 440 (59 ALR 548 and 81 FLR 168) , the Magistrate had stated that a flight not available to members of the public did not allow the use of aircraft by persons outside the immediate contracting parties. 46. In my respectful opinion, that states the regulation far too narrowly. Furthermore, there are a number of problems with CASA’s reference to the Southern Cross Airlines case. 47. The first is that Chegwidden’s case, which went on appeal and was heard by Cox J in the Supreme Court of South Australia, was not a case which attempted to analyse the distinction between charter and RPT. Chegwidden was prosecuted for conducting what was said to be a charter operation while he held an unrestricted private pilot (aeroplane) licence. At that time, the Air Navigation Regulations required a person who wished to conduct charter operations to hold a commercial, senior commercial or airline transport pilot licence. It was claimed Mr Chegwidden breached that regulation. The regulation which is referred to in Chegwidden’s case was r 191(c). At that time, r 191(c) provided:
Charter operations, being all air service operations in which aircraft are used –
(i) for the carriage of passengers or cargo for hire or reward to or from any place, but which are not conducted in accordance with fixed schedules to and from fixed terminals; or (ii) for the carriage, in accordance with fixed schedules to and from fixed terminals, of passengers or cargo passengers and cargo in circumstances in which the accommodation in aircraft is not available for use by members of the public.
48. The only issue before the Court was whether Mr Chegwidden carried passengers for hire or reward. Also, as the flight in question was not conducted in accordance with fixed schedules, being a fight provided on demand, the Court was only concerned with r 191(c)(i). Cox J said, at 170:
13 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
It is enough, therefore, to concentrate on the expression “for hire or reward” in para (c)(i) of reg 191. This is the point of dispute between the parties, so far as the law is concerned, in the case of both counts.
49. It should be apparent that any comments made by the Magistrate at first instance regarding r 191(c)(ii) were obiter . His comments about the construction of r 191(c)(ii), and in particular his statement that the closed charter did not allow for use of the aircraft by persons outside the immediate contracting parties, are simply his opinions. Like Bollen J in the Southern Cross Airlines case, I am not bound by those comments. 50. Nevertheless, it is of some interest that the Magistrate said, when referring to the closed charter: The aircraft is simply not available to members of the public at large . In other words, the aircraft was available for use by a particular segment of the public but not to members of the public . The word public is defined as: 1 relating to or concerning all the people of a country or community (Chambers 21st Century Dictionary). The Magistrate gave examples of the types of arrangements he had in mind, including the transportation of workmen to an off-shore drilling platform. Obviously, in this example, the contracting parties would have been the company conducting the off-shore drilling and the aircraft operator. The company of course is at liberty to decide who will fly on the charter on any given flight. While its employees are properly described as members of the public, their use of the aircraft is for a specific purpose, and not for general transportation as would be the case in RPT flights. 51. In the Southern Cross Airlines case, Bollen J was hearing an appeal from a Magistrate who had convicted the company and its chief pilot for breaches of the Air Navigation Regulations . His Honour agreed with the conclusions and reasons of the Magistrate and in particular the following, which is recorded at 81:
However, the evidence does at least establish the aircraft was available for passenger transportation on those flights. In my view, it is irrelevant whether a passenger was carried on the full leg of the flight or even whether the passenger was actually carried. If the aircraft on that flight was ‘available’ for the transportations [sic] of members of the public it falls within the definition.
52. In my opinion, the analysis of the Magistrate in the Southern Cross Airlines case regarding availability for use as transport by members of the public is correct. The RPT/charter distinction under r 191(c)(ii) was made by examining the use for which the aircraft was available. It was not made by determining whether the persons carried were members of the public although the reference to members of the public was likely intended to emphasise the general nature of that use. 53. Regulation 191 did not include the word generally nor did it refer to the word person or persons . This regulation was amended when the CARs replaced the Air Navigation Regulations in 1988 although, despite extensive research, I have not been able to ascertain the reason for that amendment. CASA does not so much as even acknowledge the change in its policy document. 54. It appears to me that the expression members of the public became so fixed in the minds of the regulators that when the expression was changed to not available for use by persons generally, it was thought the expression members of the public was synonymous with persons generally . Quite plainly, it is not. The inclusion of the adverb generally was intended to direct the reader’s attention to the availability for use, which the earlier expression also did, but not so clearly. While both expressions convey the same meaning, the amendment emphasises the fact that the distinction between charter and RPT operations is based on the use or purpose of the flight, and not the characterisation of the persons undertaking it. There is good logic for doing so. Every natural person who charters an aircraft can be described as a member of the public. Without qualifying the purpose or use for which the aircraft is available, it would be impossible to
14 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
distinguish those persons who are undertaking a charter flight from those who are travelling on RPT. For example, the parish priest who charters an aircraft for groups of parishioners is a member of the public as are the parishioners. The parishioners may also reimburse the priest the cost of the charter just as members of the public pay the travel agent for a tour which includes an airfare. 55. In its policy statement CASA also referred to the Commission of Enquiry into the Relations between the CAA and Seaview Air (the Seaview Report). CASA acknowledged the interpretive difficulties posed by CAR 206(1)(b)(ii) and quoted from the Seaview Report as follows:
One can readily understand that confusion may arise where regularity has been introduced into the area of charter. ... The Civil Aviation Regulations are concerned with air safety. Certain operations are classified as Regular Public Transport; others as charter. Once classified as Regular Public Transport, the operator is obliged to follow a more rigorous safety regime. In Chegwidden v White, Cox J said this ... If there is any ambiguity about it, the court should bear in mind that the evident purpose of the regulations in this respect is to promote safety – higher qualifications are needed [in that case] for a commercial pilot licence – and should give the regulations a liberal and remedial construction [citations omitted]
56. The problem with the quote said to be taken from Chegwidden’s case is that Cox J made that statement in an entirely different context. As I have said, he was concerned with the words hire or reward in r 191 and he explained that it distinguished a pilot who genuinely carries passengers for nothing from the pilot who directly or indirectly makes the flight and return for some payment or other recompense. That is what the reference to ambiguity is about. It has nothing to do with the words used CAR 206(1)(b)(ii) and is in fact a reference solely to r 191(c)(i). That regulation contains no reference at all to members of the public or persons generally. 57. I am mindful of what the Full Court of the Federal Court said in Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 regarding the application of policy. While the Court in that case was dealing with Ministerial policy as opposed to Departmental policy, for the purposes of this case, the distinction is not relevant. Bowen CJ and Deane J in their joint reasons for decisions said, at 69-70:
In a matter such as the present where it was permissible for the decision-maker to take relevant government policy into account in making his decision, but where the Tribunal is not under a statutory duty to regard itself as being bound by that policy, the Tribunal is entitled to treat such government policy as a relevant factor in the determination of an application for review of that decision. It would be contrary to common sense to preclude the Tribunal, in its review of a decision, from paying any regard to what was a relevant and proper factor in the making of the decision itself. If the original decision-maker has properly paid regard to some general government policy in reaching his decision, the existence of that policy will plainly be a relevant factor for the Tribunal to take into account in reviewing the decision. On the other hand, the Tribunal is not, in the absence of specific statutory provision, entitled to abdicate its function of determining whether the decision made was, on the material before the Tribunal, the correct or preferable one in favour of a function of merely determining whether the decision made conformed with whatever the relevant general government policy might be.
58. Following the Full Court decision in Drake , the matter was remitted to the Tribunal where it was
15 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
heard by Brennan J, who was then the President of the Tribunal. The decision of Brennan J in Re Drake and Minister for Immigration and Ethnic Affairs (No 2) is to be found at [1979] AATA 179 ; (1979) 2 ALD 634. His Honour said, at 640:
There are powerful considerations in favour of a Minister adopting a guiding policy. It can serve to focus attention on the purpose which the exercise of the discretion is calculated to achieve, and thereby to assist the Minister and others to see more clearly, in each case, the desirability of exercising the power in one way or another. Decision-making is facilitated by the guidance given by an adopted policy, and the integrity of decision- making in particular cases is the better assured if decisions can be tested against such a policy. By diminishing the importance of individual predilection, an adopted policy can diminish the inconsistencies which might otherwise appear in a series of decisions, and enhance the sense of satisfaction with fairness and continuity of the administrative process.
59. However, his Honour cautioned that the policy must be consistent with statute. He said, at 640;
His discretion cannot be so truncated by a policy as to preclude consideration of the merits of specified classes of cases. A fetter of that kind would be objectionable, even though it were adopted by the Minister on his own initiative.
60. As to the Tribunal’s duty, Brennan J said, at 642-643:
The Tribunal’s duty is to make the correct or preferable decision in each case on the material before it, and the Tribunal is at liberty to adopt whatever policy it chooses, or no policy at all, in fulfilling its statutory function. In fulfilling its function, the Tribunal, being independent of the Minister, is free to adopt reasoning entirely different from the reasoning which lead to the making of the decision under review. But it is not bound to do so. Of course, the Tribunal would be in error to apply an unlawful ministerial policy to cases it decides, for an application of unlawful policy vitiates the consequential decision.
61. In my respectful opinion, CASA’s Regulatory Policy dealing with the classification and regulation of closed charter operations under CAR 206(1)(b)(ii) issued in July 2009 is simply incorrect and, accordingly, unlawful. It has relied on the wording used in Air Navigation Regulation 191(c) which uses words not found in CAR 206(1)(b)(ii). No reference is made in that policy document to the change in the wording or the reasons for that change. In fact, in support of the policy, CASA has quoted from cases that have dealt with Air Navigation Regulation 191. I decline to follow it. 62. In my opinion, Caper’s operations between Darwin and Bathurst Island fall within the definition of a closed charter set out in CAR 206(1)(b)(ii). When the regulation is read so as to give effect to its grammatical construction, it is clear that it is not concerned with whether aircraft are made available for use by persons who are travelling as members of the public as opposed to a private group which, while nevertheless comprising members of the public, also has some other distinguishing feature. It is concerned with the purpose for which those persons have acquired accommodation in the aircraft. 63. The evidence clearly indicates that the Caper aircraft, which are the subject of this matter, are only made available for use by persons attending the Tiwi island tour. That is a specific purpose as opposed to the general purpose of transportation between Darwin and Bathurst Island. If the transport were to take place for general purposes, that is simply for transport to the island, then it would clearly be RPT providing of course that it satisfied the other requirements in CAR 206(1)(c). The evidence also discloses that AAT Kings does not sell tickets or accommodation
16 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
on Caper’s aircraft to persons other than those undertaking their tours. AAT Kings charters the entire aircraft even if there are spare seats on that aircraft and those spare seats are not made available to persons who wish to use the aircraft for general transportation. In my opinion, Caper’s tour operation between Darwin and Bathurst Island is a charter operation. It satisfies the definition in CAR 206(1)(b)(ii). 64. While my findings regarding Caper’s operation and the application of CAR 206(1)(b)(ii) disposes of this matter, in the course of the hearing I raised a question about whether CAR 206(1)(b)(ii), and possibly (i), fall within the power of the Governor-General to make regulations under s 98 of the Act. While not necessary for the disposition of this matter, given the additional submissions provided by both parties dealing with this issue, I have decided to offer my opinion on it.
THE VALIDITY OF REGULATIONS DEALING WITH CHARTER OPERATIONS
65. In the course of hearing this matter I raised some questions about the validity of the regulations which distinguished charter operations from RPT. In particular, I was concerned whether CAR 206(b) was a regulation which could validly be made under s 98 of the Act. I raised this question because it appeared to me that CAR 206(b)(ii) was in almost the same form that existed prior to the Act coming into effect in 1988. The Act of course superseded the Air Navigation Act 1920 . Section 26(1) of the Air Navigation Act provided five grounds on which the Governor-General could make regulations, not inconsistent with that Act. The relevant grounds, as at 1986, for the purposes of the licensing of air service operations were:
(b) for the purpose of carrying out and giving effect to the Chicago Convention...[the Convention on International Civil Aviation concluded at Chicago on 7 December 1944]; [and] (d) in relation to air navigation, being regulations with respect to trade and commerce with other countries and among the States.
66. By way of contrast, s 98 of the Act, as at 1988, provides that the Governor-General may make regulations, not inconsistent with the Act, in the following relevant circumstances:
(c) for the purpose of carrying out and giving effect to the provisions of the Chicago Convention relating to safety; and (e) in relation to the safety of air navigation, being regulations with respect to trade and commerce with other countries and among the States.
67. The difference between the sections in the two Acts empowering the Governor-General to make regulations is reasonably clear. Under the Air Navigation Act , the emphasis under the regulation making power appears to be for the purposes of trade or commerce and regularising air navigation. By way of distinction, s 98 of the Act focuses on the safety of air navigation. 68. The reasons for the distinction in the powers of the Governor-General to make regulations are found in the historical development of aviation in Australia. An excellent outline of that history was provided by Lockhart J in Ansett Transport Industries Ltd v Morris and Another (1986) 18 FCR 527. In that case, there were six proceedings which were heard together by consent. The dispute involved Australian National Airlines Commission (TAA), Ansett Transport Industries Ltd (Ansett), East-West Airlines (Operations) Ltd (East-West) and the Federal and Queensland Governments. It centred on the two airlines policy which existed at that time; the importation by East-West of three Boeing 737-300 aircraft; and their plans to use those aircraft on routes which linked trunk route centres. It involved consideration of the two airlines agreement, the Airlines Equipment Act 1958 and the interaction between those Acts and Air Navigation Regulations 1947 . At that time, the licensing of air service operations was contained in Division 1 of Part XIII of the Air Navigation Regulations . Regulation 191(c), as it was in 1947, defined charter operations in the following way:
191(c) Charter operations, being all air service operations in which
17 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
aircraft are used for the carriage of passengers or cargo for hire or reward, on demand, to or from any place, but which are not conducted to fixed schedules to and from fixed terminals, or on two or more occasions within any period of four weeks over a route, or section of a route, on which regular public transport services operate in; . . .
69. By way of distinction, RPT operations were defined in the following way:
191(d) Regular public transport operations, being all air service operations in which aircraft are used for the carriage of passengers or cargo for hire or reward to fixed schedules to and from fixed terminals over specific routes with or without intermediate stopping places between terminals.
70. In those regulations, the interaction between the regulations and the preservation of the economic viability of the Commonwealth Government established airline, TAA, are plain. In fact, prior to the High Court's decision in the Australian National Airways Pty Ltd case, TAA maintained a monopoly over RPT operations. The High Court held that the creation of a government monopoly was inconsistent with the freedom of interstate trade and commerce although it upheld the right of the Commonwealth to participate in interstate trade and commerce. 71. After that High Court decision, competition was opened up between several RPT operators, including Australian National Airways Pty Ltd (ANA) and Ansett Airways. Subsequently, the Commonwealth Government decided that there should be two airlines in competition providing airline services to the Australian public. This resulted in passing of the Civil Aviation Agreement Act 1952 . However, in 1957, ANA was suffering financial difficulty when Ansett purchased all of its issued shares. The combined operation, Ansett – ANA, became an operating division of Ansett. This resulted in the Civil Aviation Agreement Act 1957 , the purpose of which was to secure and maintain the position where there were two, and not more than two, operators of trunk route airline services. There were a number of subsequent agreements embodied in the Airlines Agreement Acts. In essence, these agreements precluded the Commonwealth, the Minister or the Director-General from permitting the holder of an airline or charter licence to develop: (a) air services on routes described as trunk routes; or (b) specialist freight and passenger services (including low-cost inclusive tours) unless, in the opinion of the Minister, those services were not adequately provided for either by the Commission or by the operating company. 72. The preamble to the 1981 Airlines Agreement spelled out its purpose as ensuring: (a) the efficient and economic operation of air passenger services within Australia; and (b) the continued existence in competition with each other of only two operators of the air passenger services over the entire trunk route network within Australia . . . 73. In 1981, r 199 of the Air Navigation Regulations dealt with conditions for the issue of licenses. Regulation 191, which was the forerunner of CAR 206, dealt with the classification of operations. In effect, r 191 simply defined the various categories of air transport. Under the regulations as they existed in 1947, there was only one category described as a charter operation. I have referred to that above at paragraph 32. At that time, the definition incorporated the notion of fixed schedules and fixed terminals which reflected the Commonwealth's desire for a monopoly by the then Commonwealth owned airline and also the limitation regarding operations over particular routes or a section of the route on which a regular public transport service was operating. However, by 1949 when the regulations were amended, r 191 reflected the fact that charter operations were distinguished from RPT simply by reason of the fact that charter operations were limited to those operations which people utilised on demand. It did not include operations conducted in accordance with fixed schedules and to and from fixed terminals. 74. In 1955, r 191 of the Air Navigation Regulations was again amended and this is the first occasion on which charter operations were divided into two components, now commonly
18 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
referred to as open charter and closed charter. The open charter was characterised by the notion that such operations were not conducted in accordance with fixed schedules from fixed terminals. In other words, they were services provided on demand. The second category, closed charter, appeared to reflect the fact that aircraft could operate as a charter, even though they operated in accordance with fixed schedules to and from fixed terminals. However, in such operations, the accommodation in the aircraft could not be made available for use by members of the public. At the same time, the definition of RPT operations was amended to reflect the fact that those operations were available for the transport of members of the public or for use by members of the public for the transport of cargo. As for the conditions of issue of licences found in r 199, the Secretary was required to have regard to matters concerned with the safety, regularity and efficiency of air navigation and no other matters (r 199(4)). As Lockhart J said in the Ansett Transport Industries case at 560:
The ambit of "matters concerned with the safety, regularity and efficiency of air navigation" is much wider than safety or operational considerations and includes economic considerations bearing upon the safety, regularity and efficiency of air navigation including the stability of the air transport industry.
75. Lockhart J also explained that the expression safety, regularity and efficiency of air navigation , had its genesis in the Chicago Convention. His Honour explained that the expression was inserted into the Air Navigation Regulations in 1964. He said that the language of the regulations, in particular r 199, reflected the constitutional limitations upon the power of the Commonwealth Parliament to legislate in this field. The Constitution included no reference to aviation and therefore the Commonwealth's powers in relation to that field were derived from its powers to make laws with respect to other matters, including the trade and commerce power. 76. The regimé of course changed in 1988 with the introduction of the Act and the CARs. CAR 206 retained the charter purposes definition in accordance with the open charter and closed charter concepts. As I have explained above, the words in the closed charter definition altered such that reference to not available for use by members of the public was changed to not available for use by persons generally . The RPT definition was also altered to delete reference to members of the public and instead it referred to the purpose of transporting persons generally. I have already explained what I believe should be understood by the expression as it now stands. Regardless, the regulations now dealing with air service operations no longer contain the restrictions set out in the Air Navigation Regulations dealing with the economic viability of operations. All that remains of those regulations are the definitions of the various types of air service operations conducted for commercial purposes. AOCs have replaced the previous licensing system. The issue of AOCs is now dealt with under the Act, specifically ss 27 and 28. AOCs issued under s 27 of the Act apply only to the flying operations of an aircraft for the purposes prescribed in CAR 206. The Act also provides that CASA may impose conditions on an AOC. 77. The question which I raised was whether the provisions under CAR 206(b)(ii) are regulations made in relation to the safety of air navigation or for the purpose of carrying out and giving effect to the provisions of the Chicago Convention relating to safety. In my opinion, CAR 206(b)(ii) is within the power to make regulations set out in s 98 of the Act. Despite using terminology which was originally used to distinguish permissible routes on which charter aircraft could operate, that is no longer the case. That is because those restrictions no longer apply. In fact, CAR 206 can properly be described as a section dealing with definitions. It neither empowers nor restricts any particular operations but rather defines them for the purposes of s 27(9) of the Act. Any restrictions or conditions may then be applied to an AOC by reason of s 28 of the Act.
CONCLUSION
78. CASA contended that Caper, contrary to its AOC, was conducting RPT operations between
19 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
Darwin and Bathurst Island. CASA claimed that Caper's operation did not fall within the description of charter operations in either CAR 206(1)(b)(i) or (ii). That was because those operations were in accordance with fixed schedules, to and from fixed terminals, for the purpose of transporting persons or cargo generally. 79. Although I have found that Caper operated between Darwin and Bathurst Island in accordance with fixed schedules, to and from fixed terminals, that operation does not fall under the definition of RPT. That is because the accommodation on Caper's aircraft in that operation is not available for use by persons generally. In my opinion, reading the adverbial clause in CAR 206(1)(b)(ii) in accordance with its grammatical construction makes it clear that the word generally qualifies the adjective available and not the noun persons . In other words, an operation is a charter operation where accommodation in the aircraft is not generally available for use by persons. The adverb, generally , cannot qualify or modify the noun persons . Unfortunately, it appears that this is the way in which the expression has been understood by CASA. It has resulted in attempts to distinguish charter from RPT on a basis which makes no sense and is not related to the safety of air navigation. In my opinion, the correct way in which CAR 206 should be understood will alleviate those problems. 80. I have also briefly examined the validity of CAR 206(1)(b) in general. I have found that because that regulation is merely concerned with definitions, it has been lawfully made under s 98 of the Act. Unlike the earlier Air Navigation Regulations dealing with the licensing of air operations, following the commencement of the 1988 Act, s 28 is where CASA derives its power to control the commercial operations of AOC holders. Those matters are no longer dealt with under the regulations. 81. I find that the decision made by CASA on 7 September 2010 to cancel one of the authorisations contained in Caper's AOC in respect of its operations between Darwin and Bathurst Island for the purpose of conducting the Tiwi Islands tours was incorrect. I set aside that decision and instead determine that the conditions on Caper's AOC should remain unaltered. Caper should be permitted to continue with its charter operations between Darwin and Bathurst Island. 82. I make no order regarding the Stay granted under s 41(2) of the AAT Act.
I certify that the eighty-two [82] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr Egon Fice, Senior Member
Signed: ...... [sgd]......
Elise Montalto, Associate
Dates of Hearing 20 & 21 December 2010
Date of Decision 21 March 2011
Counsel for the Applicant Mr J. Ribbands
Solicitor for the Applicant John Maitland Lawyers
Counsel for the Respondent Mr I. Harvey
Solicitor for the Respondent Civil Aviation Safety Authority
20 of 21 27/06/2014 6:10 PM Caper Pty Ltd T/a Direct Air Charter and Civil Aviation Safety Authorit... http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2011/181...
AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/AATA/2011/181.html
21 of 21 27/06/2014 6:10 PM