Court transcript 21st September 2004

TRANSCRIPT OF PROCEEDINGS

FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

STONE J

No 1351 of 2004

RICHARD HAROLD SMITH

and

AIRSERVICES AUSTRALIA

SYDNEY

10.24 AM, TUESDAY, 21 SEPTEMBER 2004

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DR J. GRIFFITH SC: I appear with MS RICHARDSON for the applicant.

MR J. HALLEY: I appear for the respondent.

DR GRIFFITH: Your Honour, this is an application for expedition of a

judicial review action commenced recently by Mr Smith. I move on a

notice of motion dated - - -

HER HONOUR: Can I just stop you there Mr Griffith, there seems to be

a lot of people in the back who want to come in. The people at the back

can come in and stand on the side if they wish. No further than those

doors. All right, thank you, sorry to interrupt you.

DR GRIFFITH: I move on a notice of motion dated 16 September 2004.

Your Honour, I understand the matter was before your Honour on a short

service application last week, and your Honour may well have had an

opportunity to review the application for review - - -

HER HONOUR: And I've actually had an opportunity to mislay the notice

of motion.

DR GRIFFITH: I may have another copy. Perhaps I can hand a copy up

to your Honour.

HER HONOUR: That would be helpful, thank you. Yes, I have had a

quick read of the materials.

DR GRIFFITH: Yes, as your Honour will have gathered the proceeding

relates to a challenge to the validity of a decision taken by the board of the

respondent on 27 August of this year which decision will become effective

on 25 November this year and the decision in question is a decision which

could be accurately described as a decision to wind back reforms which the

government had accepted in principle to introduce a system of air space

classification in Australia based upon a United States model.

HER HONOUR: So the United States model was the reform that you are

referring to, the decision you object to is a decision not to proceed with that

or even to reverse it.

DR GRIFFITH: It's a decision to reverse or wind back one part of that

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reform. As your Honour might appreciate the subject mater of air space

classification is an extraordinarily complex one with important public

interest ramifications at least in so far as air safety is concerned and a

decision having been taken by the government back in 2002 to adopt the

American based system we have since that time been engaged in a staged

process of implementation of various parts moving towards full adoption of

the United States system.

The stage in which we are currently engaged is referred to as Stage 2B and

Stage 2B was implemented in November last year. So it has been in place,

your Honour, for almost twelve months and it is, if I could use the

language, the status quo at the moment is the implementation of Stage B.

HER HONOUR: That has been effected, has it

DR GRIFFITH: That is what will be effected if the decision is

implemented. The decision is to wind back or modify the implementation

of that particular stage and as your Honour might imagine, in an area like

this there is a lead time necessarily in implementing decisions or actions

relating to air safety and air space classification and having made the

decision on 27 August which is the subject of this challenge the respondent

is engaged in taking preliminary steps to ensure that the decision can then

be implemented on 25 November and those steps include matters such as

printing charts and also printing and distributing, training and educational

material and bulletins and circulars no doubt to the many people who would

be affected by this decision.

HER HONOUR: Are you able to explain to me the difference between the

position that would apply were this decision not to be implemented and the

decision that would apply on implementation of the decision?

DR GRIFFITH: If the decision were not to be implemented the status quo

would obtain.

HER HONOUR: So what would the difference be between the status quo

and what is proposed?

DR GRIFFITH: The status quo involves a wider distribution of what is

called class E air space. What is proposed under the decision is that class E

air space be reclassified as class C air space over what are class D air

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terminals and Mr Smith has a number of concerns about that wind back not

the least being the fact that there is not approach radar available in some

class D towers over which the class C air space will apply and, in particular

he has a concern in respect of airports such as Albury and Coffs Harbour

which fit into that category.

HER HONOUR: So there is a safety concern in relation to class C air

space above some airports where there isn't radar.

DR GRIFFITH: That's correct, your Honour. That's Mr Smith's

concern. No doubt the respondent has been reviewing this matter for some

time arising from an incident that your Honour may even well be aware of

relating to an incident at Launceston airport some months ago. That is of

course part of the controversy in this case, there are differing views on what

is the optimal air safety answer to the problem. Mr Smith, as your Honour

will be aware of his affidavit has been heavily involved in the air space

reform system and is a very strong advocate of Australia moving to the US

model. Indeed, in may ways he is the architect of the current system which

has been implemented.

Your Honour will have gathered from the application for review that the

judicial review challenge is based on familiar grounds or heads of review, a

failure to give real and genuine consideration to relevant matters,

deficiencies in the consultation process and a Wednesbury unreasonableness

claim which was intended to be formulated very much with the Prasad type

case in mind and your Honour, perhaps I should formally read the affidavit

of Richard Harold Smith affirmed on 16 September 2004 in support of the

application for expedition.

HER HONOUR: Yes. I give you leave to read that affidavit.

DR GRIFFITHS: Thank you, your Honour. I can indicate that I have had

the opportunity to have a brief discussion with Mr Halley this morning and

subject to some matters that he wishes to raise I understand that there is no

opposition at least to the application for expedition. It is a case which on

its face would appear to cry out for priority in view of the public safety

issues that are raised. It is plainly a matter that's very much in the public

interest.

We consider that it is, subject of course to the court's convenience and on

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the assumption that the case would take no more than two days which is our

current assessment - I will come back and say something about that in half a

moment - we believe that with cooperation on both sides and subject to the

court's convenience it ought to be possible to have the matter ready for a

hearing by about, we would hope, the middle of November, bearing in

mind that the critical date is 25 November for the decision to be

implemented.

We have taken the liberty of preparing some draft short minutes of order

which I provided to Mr Halley this morning which I could perhaps hand to

your Honour. Your Honour sees that it deals with various steps

commencing with categories of discovery. Have I given your honour a

copy with the dates included?

HER HONOUR: No.

DR GRIFFITHS: I have one without dates in case we need to have any

modification and one with dates in it. I will give your Honour one with

dates in it. The first matter is providing categories of discovery. In fact we

provided those to the respondent this morning. Then there is provision for

the respondent to respond on discovery by 29 September. I can indicate to

your Honour that a request for statement of reasons under section 13 was

provided to the respondent on 1 September, so that's about three weeks ago.

We haven't yet had a formal reply although we understand that a statement

of reasons is forthcoming.

HER HONOUR: It was requested when?

DR GRIFFITHS: On 1 September. We would have liked, of course, to

have thought that on a matter of this importance that the respondent could

provide such a statement sooner rather than later, rather than using the full

28 days which is available as a maximum at least under section 13 of the

ADJR Act. Then we have provision for filing of evidence as your Honour

sees, leading to the matter coming back for further directions perhaps some

time in early November but if it were possible even at this stage, subject to

Mr Halley's comments to set aside some time for the matter to be heard in

mid November if necessary, according to the court's availability some

adjustment could then be made to this timetable.

There is one thing that I should mention and Mr Halley will no doubt

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develop it himself. I mentioned to your Honour that understandably there

are a number of important preliminary steps that have to be taken by the

respondent in the lead up to the implementation of the decision on 25

November and I understand from Mr Halley that a critical point in that

process will be the distribution of charts and there is a particular concern as

we understand it on the part of the respondent that we may reach a point of

no return in this matter.

In other words, if the charts are distributed and the matter is heard and Mr

Smith is successful then reversal of those earlier steps could themselves

create air safety issues.

HER HONOUR: Indeed, and when is that critical date?

DR GRIFFITHS: That critical date I understand is 10 October. Of

course, it would be open, it goes without saying, for the respondent to defer

the current timetable. After all, we have the status quo ironically, which is

the reversal of the normal situation.

Mr Halley no doubt is better informed than I on the mechanics involved in

such a process, but I am led to believe that there are certain, only under

international aviation regulations, there are only particular times in which

reforms of this nature can be introduced and that if November 25 is the

current scheduled key date, and I understand from Mr Halley that in fact if

that date is lost then the decision may not be capable of being implemented

until the middle of next year.

Anyway he will say no doubt more about that. But in our respectful

submission the case is one which plainly does cry out for expedition and we

are confident that with cooperation between the parties and subject of course

to the court's convenience that the matter could be certainly heard at least

by the middle of November. We understand that would put quite a bit of

pressure on the court in order to deliver a judgment if it were at all possible

prior to the date of 25 November.

Mr Halley has also raised with me, I can indicate your Honour, a concern

about the Wednesbury unreasonableness claim which is the third main

ground of challenge, and in particular he indicated that it could well add to

the likely number of hearing days if a fully fledged Wednesbury

unreasonableness claim is run. It was not our intention to run such a broad

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Wednesbury unreasonableness claim and I've indicated to Mr Halley that we

would be only too pleased to provide some further and better particulars, if

required, of the Wednesbury unreasonableness claim which may assuage

some of his concerns about the amount of hearing time. I understand he

has a particular concern that if a full blown unreasonableness case is run his

client would need to call expert evidence and the like. We fully appreciate

that that could well add to - - -

HER HONOUR: Well how would you propose to confine it then?

DR GRIFFITH: Well confine it by making it plain that it is directed

mainly to a pressard type complaint, a failure to make appropriate inquiries

in respect of material that was readily available, with particular reference

your Honour to the report from Professor O'Neil from the Australian

National University which report was provided to the respondent by CASA

the day before the decision was made and in that report, as your Honour

will have gathered, Professor O'Neil raises some concerns about

methodological and other issues with the Air Service assessment of the

decision and CASA encouraged the board to have an oral briefing from

Professor O'Neil in order to have the benefit of his views. As far as we are

aware that briefing didn't occur. So that would be material, in our

respectful submission, that was readily available but was not appropriately

pursued.

There's also of course the report from the US Air Traffic Control expert,

Geoff Griffith, who similarly raised concerns about some aspects of the

modelling and methodology that had been carried out by Air Services and

that report was provided to the Department of Transport the day before the

decision was made and in the circumstances we have concerns about

whether there was a sufficient opportunity for the respondent properly to

absorb and inquire into and consider those safety matters that were raised by

that particular American expert.

HER HONOUR: All right, thank you Dr Griffith. Mr Halley, is it your

client's position that in principle there's no objection to expedition? It

seems to me there's some very practical problems about when actually it

could be heard and what the critical dates are.

MR HALLEY: Yes, that is the position your Honour. Your Honour has

heard a lot about what I am going to say. Hopefully it might bear some

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relation to what Dr Griffith has indicated. Your Honour, our position as I

think forecast by Dr Griffith is simply this. We don't oppose expedition,

but we do have concerns at this stage about the proposed timetable.

Whether those concerns ultimately come to fruition or not is a matter we

hope to be able to address in the next two or three days.

The two issues that we are concerned about are first, as Dr Griffith, most

recently mentioned the issue of Wednesbury unreasonableness and the

impact that that is going to have on the preparation and the length of the

hearing. The second is a matter also to which Dr Griffith alluded, which is

the question of the potential roll back of the implementation which has

already commenced. The implementation timetable is under way. The

implementation takes effect from a particular designated hour on 25

November. Your Honour probably appreciates that Australian Air Services

is responsible for some 11 or 12 percent of the world's air space. It has

massive ramifications if you start to change that air space and the ICAO,

the International Civil Aviation Organisation and the Chicago Convention

dictate, together with the Air Services Act very strict procedures before one

starts to change air space.

Those procedures effectively require some 90 days from the time a decision

has been taken to implement a change on a set date. The set date being 25

November.

HER HONOUR: So you need about 90 days before 25 November?

MR HALLEY: Precisely your Honour, so those steps have been under

way since 27 August. They include training and education. They include

production of charts. They include a lot of other work that is necessary to

be undertaken.

HER HONOUR: Are you saying that as a practical matter, the process is

now irreversible?

MR HALLEY: No, I'm not your Honour. What I am saying is that Air

Services has commenced and hopes to complete in the next two or three

days a safety analysis to determine what steps can be put in place to

mitigate any risk that might take place if a judgment cannot be given in this

matter until mid to late November. So that the extent of publicity, the

extent of steps to try to mitigate the risk have to be identified and then an

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assessment has to be taken whether the roll back at that stage is going to be

an even greater risk than keeping in place the status quo.

As your Honour will appreciate the decision to roll back, as my friend has

indicated, was based as a result of a lengthy safety assessment of a case that

Air Services undertook on aspects of the NAS2B implementation. For

reasons which are quite complex that issue was not on Air Services cases,

or the proposal was not subjected to that test before the implementation in

November last year. The fact that that implementation, in other words the

US model has not been subjected to that assessment in the context of

Australian air space as opposed to the US air space has led Air Services to

culminate in a decision made on 27 August that giving safety paramount

consideration Air Services is required to roll back one aspect of, and that is

the aspect to which my friend complains, one aspect of the NAS2B

implementation.

My friend was asked to identify the difference between class E and class C

air space. In a nutshell your Honour, in class C air space what are known

as IFR which are instrument flight rule pilots, so airlines dash eight and

above - - -

HER HONOUR: Class C?

MR HALLEY: Those airlines in class C air space are separated from all

other aircraft by air traffic control, irrespective of whether it is covered in

radar. Your Honour may appreciate that only effectively the east coast of

Australia is covered by extensive radar coverage. Much of the balance of

Australian, given the limited amount of traffic, has never been subject to

radar cover. So that the separation of air craft in class C air space without

radar is something which has occurred in Australia for many many years.

It is not controversial at least in the Australian environment.

In class E air space IFR, that Qantas, Air New Zealand and so forth, are

only separated by air traffic control from other IFR aircraft. They are not

separated from what are called VFR, or visual flight rules aircraft. So the

light Cessnas, the one engine planes, air traffic control don't know that they

are there and aren't in a position to separate IFR aircraft form VFR aircraft

if it is in class E air space. What is relied upon instead is what's called in

air traffic terminology, see and avoid. So one relies on the light aircraft

pilot noticing the IFR aircraft and getting out of the way.

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Now depending on the frequency of air traffic in particular areas, that does

or does not denote particular safety issues and of course we would be the

first to accept that the separation of all aircraft would involve additional

work on the part, at least in theory, of air traffic control and therefore one

has to look at the overall air space management. We appreciate that it is a

difficult issue. But effectively what we are doing - - -

HER HONOUR: In a sense, sorry to interrupt your Mr Halley, but this is

really getting into the merits which is not going to be an issue for this court.

So perhaps if we could just turn our minds to, it does seem to me from

everything I have heard that expedition is warranted. It really is a question

of working out a sensible timetable and hearing date and then seeing

whether there is a judge available to accommodate that. But from what I

have heard this morning it does strike me 15 November is really very late it

in the process; that an earlier hearing - and I can anticipate what the

arguments might be about the difficulties of getting ready for an earlier

hearing - but if an earlier hearing date could be given by the Court is there

any possibility that the parties could meet it?

MR HALLEY: Your Honour, we are faced with two conflicting issues

which concern us greatly. One is if there is to be an attempt to run any

Wednesbury unreasonableness case it potentially puts in issue the rationality

of the decision and requires, however much it might be limited, us to

deploy considerable and highly technical evidence to explain why we have

taken the steps we have taken and why it is not irrational for us to have

done so.

If, as my friend indicates, the Wednesbury unreasonableness can be

confined, and my friend has offered to provide particulars and we can look

at those and form a more considered view when we see those. But at the

moment we are concerned that the Wednesbury unreasonableness case isn't

confined in that sense.

HER HONOUR: Well, Dr Griffith has said it can be confined so let us

assume, for the moment, that that isn't going to be a problem of the

dimensions to which you refer. Then the question is - Dr Griffith was

talking about the point at which the roll-back, the point-of-no-return - - -

MR HALLEY: No, no, I should address that directly. First of all while

the distribution of charts is an important date it is certainly not, and we

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don't suggest at the moment, that that is a point-of-no-return date. The

question always is, what steps have to be taken and will those steps be

sufficient to mitigate any risk that might otherwise arise if there is to be a

roll-back. That is the activity that is currently being undertaken by Air

Services. We expect to have that completed - - -

HER HONOUR: That is the risk of pilots and airlines being advised this

is to happen and then suddenly it not happening; isn't it?

MR HALLEY: Precisely, your Honour.

HER HONOUR: So that people are confused about what is going to

happen.

MR HALLEY: Precisely, because there are some 40,000 pilots that have

to be notified. Extensive training and education has to be undertaken and,

of course, Australia is not in a vacuum. We have lots of international

flights coming through this airspace as well and they have to be notified and

they have to put in place procedures to accommodate the change. So one is

talking about a very, very extensive exercise.

Now, to the extent that that can be mitigated, and appropriate mitigators can

be identified, then it may be possible in mid to late November to

accommodate that change; it may not be. What is currently being

undertaken by Air Services - as your Honour would appreciate - is a safety

analyses to determine, with precision, as much as possible within the

timeframe, what the real cut-off date on a practical level might be.

HER HONOUR: When is that expected?

MR HALLEY: We expect that to be completed by the end of this week.

So that if there was an issue or if we could be in a position to be far more -

and this would obviously be done on affidavit - a position to advise the

Court of what steps could be taken and the mitigation significance of those

stops and the Court would be far better informed, we submit, in terms of

setting a date. It may be, as a matter of logic, that perhaps mid-October

might be the earliest date. It may be that mid-November is something that

people could live with. But on any view we are talking about a very

significant activity; 40,000 pilots, 12 per cent of the world's airspace. It is

something which Air Services has done as a result of a safety case.

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Now, I appreciate Mr Smith wants to challenge some procedural aspects of

the manner in which that decision was taken. We are confident we can deal

with those procedural challenges quickly. What we can't deal with quickly

is if it is seriously suggested that there is a Wednesbury unreasonableness

case and that no reasonable regulator - armed with what we had - could

possibly have taken this decision.

Now that is something which would involve, on any view, a very close

analysis of the merits. It would involve extensive expert evidence and it is

effectively saying to Air Services you are irrational, you had no basis to do

this. And Air Services saying, safety, safety, safety but we have these

experts to say what we did was right.

My friend says, well we might be able to confine it to a couple of reports at

the end; the heel of the hunt so to speak; Professor O'Neil and Dr Griffith.

But in order to put those reports into context we have to be able to lead

evidence, potentially, of all the other material; all the other experts; all the

other assessment that was undertaken by Air Services to restrict Air

Services response to two reports delivered that might have been

commissioned by CASA in particular circumstances and say, because you

didn't take further action in relation to those reports you are acting

irrationally, the decision must be unsound, is we suspect something that is

perhaps not realistic.

HER HONOUR: Would itself be unsound, yes.

MR HALLEY: Exactly, your Honour, because you are only looking at a

fraction of what Air Services had regard to. If it is in terms of procedure

then that is something that can be dealt with in the traditional way to show,

what did you do with those reports? Did you consider them? Were they

circulated? That is something that could be dealt with, we suspect, readily

within the period. But if it is said further that not only should you have

considered them but in failing to in effect either implement or take further

action into those reports you have acted unreasonably and therefore your

decision is unsound, raises a much, much bigger issue.

As a practical matter, your Honour, we are in the Court's hands. One

approach might be to allow the safety analysis to be completed. Allow Dr

Griffith to formulate the cut-down particulars, or specific particulars of

Wednesbury unreasonableness and then for us to address your Honour very

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early next week. I appreciate Dr Griffith is in Canberra on Monday and

Tuesday. It may be if the Court was otherwise able to link with it by

video-link on Monday afternoon.

HER HONOUR: Before we get to that - thank you, Mr Halley.

Dr Griffith, bearing in mind everything Mr Halley said, it does seem to me

that irrespective of how that matter is resolved is a matter that ought to be

heard earlier than 15 November. Is that impossible?

DR GRIFFITH: Not from our viewpoint, your Honour. Naturally much

will depend upon co-operation between the parties. We would have thought

that there was sufficient potential within the timetable that I have handed to

your Honour to bring it back a week or two. Naturally, time will be

required to adduce our evidence and also, of course, time necessarily will

be taken up in inspecting the material to be produced on discovery by the

respondent.

Really, if you look at the timetable, your Honour sees that apart from filing

the evidence and providing the particulars that I have agreed to provide,

which we will do by the end of this week, the ball really is in my learned

friend's court. Three weeks - - -

HER HONOUR: You are referring to the particulars in relation to the

Wednesbury unreasonableness, are you?

DR GRIFFITH: We can provide the particulars on Wednesbury

unreasonableness within 48 hours. The matters that are likely to complicate

a hearing date are really matters, if I may say so, are more likely to be

determined by the respondent rather than by the applicant. We are still

waiting on the statement of reasons. There will no doubt be time required

to produce documents for inspection and naturally, of course, the

respondent will need time to put on its evidence.

Being realistic we can't see any reason why in principal the case, from our

viewpoint, couldn't be ready at the beginning of November. I think it may

well be being a little optimistic to suggest that it could be got together much

before that. But certainly that first week in November would be achievable

in our camp.

HER HONOUR: Mr Halley, what is your view on that? Just putting aside

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the Wednesbury unreasonableness point and assuming that that can be sorted

out.

MR HALLEY: Assuming that could be sorted out, I think in principal the

respondent would do everything possible to comply with that timetable. It

certainly would prefer a hearing, all things otherwise being equal, in the

first week in November rather than the third week in November.

HER HONOUR: I think the sensible thing to do is to set it down for

hearing in the first week in November - working backwards then changing

these dates - on the assumption that the Wednesbury unreasonableness

problem could be sorted out.

Dr Griffith I do see a lot of the comments that Mr Halley made in relation

to the difficulties of confining that seem to me to be persuasive. You may

well have a way round that but that seems to be a sticking point. On the

other hand I don't see how - I see major problems in leaving this as late as

the middle of November. It is so close to the date. So if it was set down

for hearing in the first week of November, if you can't sort that out that

date might have to be revised before the difficulties that that would entail.

DR GRIFFITH: Yes. As I say, your Honour, it isn't our intention to run

a full-blown Wednesbury unreasonableness. It is very much directed at the

Prasad principle.

HER HONOUR: It may not be your intention to run full-blown

Wednesbury unreasonableness but it may be entirely appropriate that the

respondents feel they have to respond in a full-blown way.

DR GRIFFITH: Obviously that would be a matter for them. It is a matter

that perhaps we can't be definitive about now until we have had the

opportunity to provide the promised further and better particulars. If Mr

Halley has still got serious concerns then no doubt he will raise them with

me. Mr Smith, I can assure, your Honour, is anxious to co-operate as

much as possible to ensure that this matter is properly prepared but also, of

course, that it is heard, and hopefully determined within a practicable

timetable.

HER HONOUR: What I think the sensible thing to do then is to set it