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Seddon v Oraka [2024] PGNC 316; N10973 (23 August 2024)

N10973

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CIA NO. 14 OF 2024 (IECMS)

BETWEEN:
GARY SEDDON as Acting Chief Executive Officer of Air Niugini
First Appellant

AND:
AIR NIUGINI LIMITED
Second Appellant

AND:
BENEDICT I. ORAKA, ML as the Director of Civil Aviation and Chief Executive Officer of Civil Aviation Safety Authority of Papua New Guinea
First Respondent

AND:
CIVIL AVIATION SAFETY AUTHORITY OF PAPUA NEW GUINEA
Second Respondent

Waigani: Purdon-Sully J
2024: 12th & 23rd August

APPEAL – CIVIL AVIATION – Appeal against a decision that the CEO of an airline did not meet the fit and proper person test under the Civil Aviation Act – Adverse finding arising out of an audit by the regulator – Appeal upheld - Regulator failed to meet the mandatory requirements under s 50(1) of the Civil Aviation Act in reaching its decision – term “fit and proper person” considered.

Cases Cited:

Papua New Guinean Cases
Toll v Kara [1990] N851
Brian Michael Costello v The Controller of Civil Aviation (No 2) [1977] PNGLR 476
Costello v Controller of Civil Aviation [1977] PNGLR 476

Overseas Cases
Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd [1976] HCA 62; (1976) 135 CLR 616
Hughes & Vale Pty Ltd v State of New South Wales (No 2) (1955) 93 CLR 127, [1955] HCA 28
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33
Su v Tax Agents’ Board of South Australia [1982] AATA 127

Legislation:
Civil Aviation Act 2000, ss 2, 45, 46, 47, 49, 50, 51, 52, 52A, 310, 311

Counsel
I Molloy and C Joseph, for the Plaintiffs
G Dusava, for the Defendants

DECISION

23rd August 2024

1. PURDON-SULLY J: By Notice filed on 9 April 2024 the appellants lodged an appeal pursuant to s 310 of the Civil Aviation Act 2000 (CAA) against an adverse decision of the first and/or second respondents (respondents) contained in a letter dated 31 March 2024 entitled “Subject: Civil Aviation Safety Authority of Papua New Guinea’s Adverse Decision, pursuant to section 51 of the Civil Aviation Act 2000” signed by first respondent as Director of Civil Aviation whereby the respondents purportedly exercised the powers under s 51(2) of the CAA to revoke the first appellant’s status as a fit and proper person to exercise the privileges of the CEO position under the Air Niugini Limited Air Operating Certificate (119/010) and the Aircraft Maintenance Organisation Certificate (145/010).
   
2. On 9 April 2024, in the absence of the respondents, this Court granted an interim stay pending an inter parties hearing of the Notice of Motion.
   
3. On 13 June 2024 following a contested hearing the interim stay was continued pending the determination of the expedited appeal.
   
4. The appellants seek that the appeal be upheld and the decision reversed with the respondents to pay costs of the appeal including any reserved costs.
   
5. The respondents seek that the appeal be dismissed.
   

MATERIAL CONSIDERED

6. The applicants rely upon the following material:
   
   1. Notice of Appeal filed on 9 April 2024;
   2. Affidavit of Gary Seddon, filed on 9 April 2024;
   100. Affidavit of Captain Granger Narara filed 24 April 2024;
   4. Affidavit of Karl Yalo filed 24 April 2024;
   5. Affidavit of Captain Samiu Taufa filed 7 August 2024;
   6. Written submissions filed 8 August 2024.
      
7. The respondents rely upon the following material:
   
   1. Affidavit of Benedict I Oraka filed on 16 April 2024;
   2. Affidavit of Captain Malakai Narara filed 16 July 2024;
   100. Affidavit of Benedict I Oraka filed 16 July 2024;
   4. Affidavit of Samson Yangom filed 16 July 2024;
   5. Written submissions filed 9 August 2024.
      

BACKGROUND FACTS

8. The second appellant (ANL) is the national airline of Papua New Guinea (PNG). The first appellant is its Director and CEO.
   
9. The second respondent is the Civil Aviation Safety Authority (CASA), a statutory body responsible for the promotion of aviation safety and security through safety regulation of the civil aviation industry in PNG. The first respondent is the Director of CASA.
   
10. On 23 February 2023 the National Executive Council approved the appointment of the first appellant as the Acting CEO of ANL. Upon his appointment as the Acting CEO, the respondents conducted a fit and proper person test under s 49(1)(b)(ii) of the CAA.
    
11. By a letter dated 11 April 2023 from the Office of the first respondent, the first appellant was informed that pursuant to s 50 of the CAA he was a fit and proper person to hold the position of CEO of ANL.
12. Between 13 November and 24 November 2023, CASA conducted a safety and security inspection and review of the organisation of ANL pursuant to s 52 of CAA (audit).
    
13. On or about 7 February 2024, following the audit, the first respondent issued a Notice by letter dated 7 February 2024 (Notice). The Notice revealed eight (8) infringements. The Notice raised matters under five (5) headings described as Management Systems which for convenience can be summarised as follows:
    1. Outdated organisational structure;
    2. Senior persons appointed who had not been assessed as fit and proper persons by the Director;
    100. Delay associated with failure to revise operational manuals, Training Manuals and other related documentation to capture the configuration differences between P2-PXC and P2-PXA Air Niugini Boeing B737-800 aircraft;
    4. Outdated organisation charts at front of Air Niugini manuals;
    5. Air Niugini’s Training Manual did not appropriately describe differences between P2-PXC and P2-PXA Air Niugini Boeing B737-800 aircraft and training issues with relevant personnel.
14. The Notice inter alia stated:
    

While your Quality and Safety Manager may be directly responsible for the Quality and Safety Management of Air Niugini, you have overall control over the exercise of the privileges under the Air Operator Certificate

As the Chief Executive Officer (CEO), you are ultimately responsible for ensuring that the Air Niugini AOC organisation, the Air Niugini MOC organisation and the Air Niugini Training Organisation complies with the requirements of Part 119 and Part 45 (of the CAA).

15. The Notice was issued under s 51(2) of the CAA by which the first respondent gave notice of a proposed adverse decision to revoke the status of the first appellant as a fit and proper person under the CAA “by failing to ensure that Air Niugini’s Quality and Safety management system comply with the relevant prescribed safety standards attached to Air Niugini AOC number 119/010 and MOC Number 145/010”.
    
16. The first appellant objected to the proposal to make the adverse decision by way of a letter dated 7 March 2024. His reply, accompanied by substantial supporting documentation, was served on the Office of the first respondent on 8 March 2024. He asserted, in short, that ANL had taken immediate corrective and preventative action in relation to the findings of the audit, notified CASA of the steps taken and that ANL had in place a management system that ensured compliance with relevant safety standards and conditions of CASA.
    
17. In a letter dated 21 March 2024, the first respondent informed the first appellant of his decision to revoke his status as a fit and proper person (Decision).
    
18. Pursuant to s 49(3) of the CAA it is a condition of every current aviation document that the holder and any person who has or is likely to have control over the exercise of the privileges under the document continue to satisfy the fit and proper person test as specified.
    
19. The criteria for the fit and proper person test is set out in s 50 of the CAA.
    

GROUNDS OF APPEAL

20. The grounds of appeal are as follows:
    
    1. The first respondent (and/or the second respondent) erred in fact, law and/or mixed fact and law in so far as they found that the first respondent had not “properly addressed the safety concerns that requires your input as acting CEO” without specifically identifying which responses had not “properly addressed the safety concerns”, identifying the precise safety concerns, and stating how each response fell short of addressing such concerns.
       
    2. The first respondent (and/or the second respondent) erred in fact, law, and/or mixed fact and law in so far as they found, by reason of the matters referred to in ground (1), that the first appellant was not a fit and proper person, in that they failed to identify adequately or at all how such matters rendered the first appellant not “fit and proper” by reference to the criteria by which fitness and propriety to hold an office, position, licence, certificate, privilege or benefit are judged.
       
    100. The first respondent (and/or the second respondent) erred in fact, law, and/or in mixed fact and law in so far as they found that a “concern” that the first appellant’s response was identical to that of the GM Safey, Quality, Risk & Audit, somehow justified a conclusion that the Air Niugini Quality Management System and Safety Management System does not have the required independence from the office of the Acting CEO to manage changes in the Air Niugini organization, or to monitor and measure safety performance, or to implement an audit program in the best interests of aviation safety and security, when there was no or no sufficient evidence to draw any form of those conclusions, and no reason based on any of those conclusions to find the first appellant was not a “fit and proper” person.
         
    4. The “concern” of the first respondent (and/or the second respondent) that the first appellant “may not fully comprehend the safety implications” of the decision to implement a new organization structure without prior notification to and approval from the Office of the Chief Executive Officer and Director of Civil Aviation, (a) was not justified on the facts, and, in any event, (b) a “concern” that a state of affairs “may” exist an insufficient basis to support a finding that the first appellant lacks fitness or propriety.
       
    5. The first respondent (and/or the second respondent) erred in that the first appellant’s response did not support either in fact or in mixed fact and law a finding that “the ANL Management Systems and senior persons” did not identify safety requirements as it should in a timely and proactive manner”, and in any case, such a finding does not justify or support a finding that the first appellant is not “fit and proper”.
       
    6. The “concern” of the first respondent (and/or the second respondent) with the first appellant’s comments regarding the reduced number of senior persons in the ANL organization with fit and proper standing, and the “reminder” to the first appellant that is “the responsibility of this Office, not yours” to ensure that all senior persons “are fit-and-proper persons”, are contradictory, irrelevant, unjustifiably defensive of the respondents’ Office, and incapable in fact, or law, or mixed fact and law, of supporting a finding that the first appellant lacks fitness or propriety.
       
    7. The first respondent (and/or the second respondent) erred in fact, law, and/or mixed fact and law in so far as they were “not satisfied” with the first appellant’s response, on page 5 of his Submission, when such response was rational, logical and understandable, so that the findings “that the ANL Management Systems and processes are not being effectively implanted” and the other adverse finding were not supported by the evidence. Further these matters, and the so-called “concern” with ANL’s capability to undertake projects such as the introduction of “first type” aircraft in the future, are not matters that logically and rationally go to or support a finding that the first appellant is not a fit and proper person.
       
    8. The “concern” of the first respondent (and/or the second respondent) with ANL’s capability to undertake projects such as plans to introduce “first of type” aircraft, and the claim not to be “satisfied” with the first appellant’s response “because it clearly indicates that the ANL Management Systems and processes are not being effectively implemented by ANL senior persons”, and the similar “findings’ which accompany these remarks, fall short in fact, in law, and/or mixed fact and law, of supporting a finding the first appellant lacks fitness and propriety.
       
    9. The first respondent (and/or the second respondent) erred in fact, law, and/or mixed fact and law in so far as they were “not satisfied” with the first appellant’s submission concerning Air Niugini’s Training Programme, or the training and assessment of airline personnel, and instead they erred in finding on the basis of not being “satisfied” that is did or could justify a finding that the first appellant was not a fit and proper person and again a “concern” with ANL’s capability to undertake a “first of type project” again is erroneously relied on, both in fact and law, to support a finding as to the first appellant’s fitness and propriety.
       
    10. The findings of the first respondent (and/or the second respondent) relied on to find that the first appellant was not a “fit and proper” person were erroneous in fact or mixed fact and law, and even if the various “concerns” etc were correct held (which is denied) are not singly or in any combination sufficient in fact or in law to support a finding that the first appellant lacks the requisite fitness or propriety.
        
    11. The first respondent (and/or the second respondent) erred in law or mixed fact and law by failing to consider (or decide) that some lesser or other sanction or administrative sanction was more appropriate in all the circumstances.
        
21. Notwithstanding a number of grounds of appeal, in my respectful view, the principal issue that requires consideration is whether the first respondent and/or second respondent addressed the relevant statutory criteria in s 50(1) of the CAA. If the criteria was not addressed in reaching the Decision, then the appeal should be upheld and the Decision reversed.
    
22. Before I turn to a consideration of that particular issue, I set out the relevant legislation as a framework for that discussion.
    

THE OBJECTS OF CAA

23. Section 2 of the CAA sets out the primary objects of the Act as follows:
    

PRIMARY OBJECTS OF ACT.

The primary objects of this Act include -

(a) enhancing safety, security, efficiency and service quality in the civil aviation system in a sustainable manner, facilitating access to the air transport network and contributing to the safe, smooth flow of passengers, aircraft and cargo within the civil aviation system so that it can contribute to the economic and social development of Papua New Guinea; and

(b) establishing rules of operation and divisions of responsibility within the Papua New Guinea civil aviation system in order to promote aviation safety and security at a reasonable cost; and

(c) ensuring that Papua New Guinea’s obligations under international aviation and meteorological agreements are implemented; and

(d) ensuring the provision of services and facilities for civil aviation and meteorology as efficiently and economically as practicable.

STRUCTURE OF CAA WITH RESPECT TO THE FIT AND PROPER PERSON TEST

24. Part IV of the Act, particularly ss 45 to 57 deal with the requirements of the civil aviation system.
    
25. Section 45 of the Act sets out the general requirements for participants in the civil aviation system which includes the need for a participant to ensure he has the appropriate aviation documents and all necessary qualifications and other documents for the activity which he is carrying out.
    
26. Section 45(4) provides:
    

(4) A participant who holds an aviation document that authorises the provision of a service within the civil aviation system shall -

(a) where so required by rules made under this Act, establish and follow a management system that will ensure compliance with the relevant prescribed safety standards and the conditions attached to the documents; and

(b) provide training and supervision to all employees of the participant who are engaged in doing anything to which the document relates, so as to maintain compliance with the relevant prescribed safety standards and the conditions attached to the document and promote safety; and

(c) provide sufficient resources to ensure compliance with the relevant prescribed safety standards and the conditions attached to the document.

27. Section 47 details the specific requirements of an aviation document.
    
28. Section 49 addresses the grant or renewal of an aviation document as follows:

49. GRANT OR RENEWAL OF AVIATION DOCUMENT.

(1) After considering an application for the grant or renewal of an aviation document, the Director shall, as soon as is practicable, grant the application where he is satisfied that -

(a) all things in respect of which the document is sought meet the relevant prescribed requirements; and

(b) the applicant and any person who is to have or is likely to have control over the exercise of the privileges under the document -

(i) either holds the relevant prescribed qualifications and experience or holds such foreign qualifications as are acceptable to the Director under Subsection (2); and

(ii) is a fit and proper person to have such control or hold the document; and

(iii) meets all other relevant prescribed requirements; and

(c) it is not contrary to the interest of aviation safety for the document to be granted or renewed.

(2) For the purposes of granting or renewing an aviation document, the Director may, subject to any provisions in the regulations or rules, accept such foreign qualifications or recognise such foreign certifications as he considers appropriate in each case.

(3) It shall be a condition of every current aviation document that the holder and any person who has or is likely to have control over the exercise of the privileges under the document continue to satisfy the fit and proper person test specified in Subsection (1)(b)(ii).

(4) Where the Director decides that he is no longer satisfied that the holder is a fit and proper person to hold that document, and notifies the holder in writing accordingly, the holder is in breach of that condition.

(5) Where the Director declines to grant an application for the grant or renewal of an aviation document under this section, the applicant may appeal against that decision to the National Court under Section 310.

[Underlining added]

29. The criteria for the fit and proper person test is detailed in s 50 of the CAA as follows:

50. CRITERIA FOR FIT AND PROPER PERSON TEST.

(1) For the purpose of determining whether or not a person is a fit and proper person for any purpose under this Act, the Director shall, having regard to the degree and nature of the person’s proposed involvement in the Papua New Guinea civil aviation system, have regard to, and give such weight as the Director considers appropriate to, the following matters:

(a) the person’s compliance history with transport safety regulatory requirements; and

(b) the person’s related experience, if any, within the transport industry; and

(c) the person’s knowledge of the applicable civil aviation regulatory requirements; and

(d) any history of physical or mental health or serious behavioural problems; and

(e) any conviction for any transport safety offence, whether or not the conviction was in a Papua New Guinea Court; and

(f) any offence committed before the coming into operation of this Act; and

(g) any evidence that the person has committed a transport safety offence or has contravened or failed to comply with any regulation or rule made under this Act.

(2) The Director shall not be confined to consideration of the matters specified in Subsection (1) and may take into account other such matters and evidence as may be relevant.

(3) The Director may, for the purpose of determining whether or not a person is a fit and proper person for any purpose under this Act –

(a) seek and receive such information as the Director thinks fit; and

(b) consider information obtained from any source.

...

[Underlining added]

30. Section 51 provides for the rights of persons affected by an adverse decision including the right of appeal,
    
31. Sections 52 and 52A deal with the powers of the Director in relation to conducting surveillance and sanctions.
    
32. Part XVII of the CAA is titled RIGHTS OF APPEAL and invests the National Court with jurisdiction to hear an appeal from the Decision.
    
33. Sections 310 to 312 of Part XVII provide as follows:
    

310. APPEAL TO NATIONAL COURT.

(1) Where any other section provides that a person has a right of appeal under this section against a decision, that person may appeal to the National Court against that decision in respect of that person, in accordance with the provisions of this part.

(2) It is hereby declared that in the exercise of any power conferred on the Director by any section that confers a right of appeal of the kind referred to in Subsection (1) is, except when the section specifies that the right of appeal applies to a particular decision or directions, a decision in respect of a person within the meaning of Subsection (1) may be appealed against under this section.

(3) The right of appeal against any such decisions may be exercised by -

(a) the holder of the aviation document; or

(b) the owner or the person for the time being in charge of the aircraft or aeronautical product; or

(c) the owner or the person for the time being in charge of any aircraft or aeronautical product of any class, as the case may be, in respect of whom the decision was made; or

(d) an affected document holder pursuant to Section 51(1).

[Underlining added]

311. PROCEDURE.

(1) An appeal under Section 310 shall be brought, by application, not more than 28 days after the date on which the appellant is notified of the decision appealed against, or within such further period as the National Court may allow.

(2) In determining an appeal under Section 310 the National Court may -

(a) hear all evidence tendered and representations made by or on behalf of any party to the appeal, whether or not that evidence would be otherwise admissible in that Court; and

(b) either -

(i) confirm, reverse, or modify the decision appealed against, and make such orders and give such directions to the Minister, the Departmental Head or the Director, as the case may require, as may be necessary to give effect to the decision of the Court; or

(ii) refer the matter back to the Minister, the Departmental Head or the Director, as the case may require, with directions to reconsider the whole or any specified part of the matter.

(3) An appeal under this section shall be by way of rehearing.

(4) Subject to this section, an appeal shall be made and determined in accordance with the rules of the National Court or as determined by the Judge.

(5) Subject to Section 313, the decision of the National Court shall be final.

[Underlining added]

ARGUMENTS

34. There is no dispute that the appeal is properly brought under s 310 of the CAA.
    
35. On appeal the parties are not confined to the evidence that was before the first and/or second respondent when the decision was made (Toll v Kara [1990] N851 citing Mason J (as he then was in Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd [1976] HCA 62; (1976) 135 CLR 616 at 621).
    
36. It is the appellant’s case, in short, that the Decision cannot be sustained because the first respondent failed to address the statutory criteria, took into account and relied upon irrelevant facts and circumstances while ignoring relevant facts and circumstances in finding that the first appellant has ceased to be a fit and proper person. It is further submitted that the Decision was disproportionate, unduly harsh, being punitive in nature rather than protective and, as such, contrary to the statutory scheme.
    
37. It is submitted on behalf of the respondents inter alia that the first respondent did not err in law when he made the Decision, aviation safety being the paramount consideration. It is submitted that the fit and proper person process provided for by the CAA is a process to determine the compliance knowledge and history of the persons undergoing the test concerning safety and not to determine the commercial knowledge or work history and or experience of a person in the aviation industry. It is submitted that the first respondent is not limited to s 50(1) of the Act given the provisions of ss 50(2) and (3), the decision to revoke the first appellant’s status as a fit and proper person thus made in accordance with the CAA the respondents having taken into account all relevant matters and circumstances.
    

CONSIDERATION

38. The principal difficulty for the respondents is that the evidence does not permit a finding that the first respondent met his statutory obligation under s 50(1) of the CAA in making the Decision. It is a flaw, fatal to the respondents’ case.
    
39. It is not one that can be answered by reference to the provisions of s 45(4)(a) or what the first respondent can do under ss 50(2) and (3) of the Act or the paramountcy of aviation safety and purported breaches of international obligations.
    
40. The paramountcy of aviation security and safety is in issue. It is a given. Nor is the mandate that lies with the respondents to promote aviation safety and security in accordance with their responsibilities under the CAA and international conventions. What is in issue is their compliance with the provisions of s 50(1) of the Act.
    
41. In that regard, the first respondent had a statutory responsibility, couched in clear and mandatory terms, that when for the purpose of determining whether or not a person is a fit and proper person for any purpose under the CAA, having regard to the degree and nature of the person’s proposed involvement in the PNG civil aviation system, to have regard to, and give such weight as the first respondent considers appropriate to the matters listed in s 50(1).
    
42. Section 50(2) and (3) do no more than enable the first respondent to consider such additional matters, that may not be provided for in s 50(1) and seek and/or consider information from any source, that he may determine to be relevant in performing his statutory task. Those sub-sections do not, however, excuse the first respondent from the mandatory requirement that falls upon him under s 50(1) which is to consider each of the matters listed in s 50(1), determine what weight, if any, he may place on each in striking a balance in reaching a decision on whether a person is a fit and proper person under the Act and in the performance of that exercise and in reaching a decision to that end take into account such other matters as he views as relevant.
    
43. There is no persuasive evidence that the first respondent met his statutory obligation in that regard and thus the requirements of the Act.
    
44. This is notwithstanding the respondents having been put on notice by the appellants with respect to that critical issue at the interlocutory hearing, and thus, having been afforded the opportunity to place further evidence before the Court to address the matter. Their failure to do so entitles the Court to conclude that the evidence does not exist.
    
45. With knowledge of the case against him, in his supplementary affidavit filed on 9 July 2024 the first respondent does not lead evidence that he considered the relevant criteria in s 50(1) of the CAA. That affidavit contains:
    1. six (6) paragraphs of evidence about the first respondent’s credentials and employment history,
    2. nine (9) paragraphs of evidence about inter alia, the civil aviation system in PNG and its compliance with international standards,
    100. eight (8) paragraphs about the life cycle of various aircraft, the leasing of aircraft with commentary on the financial position of ANL by reference inter alia to Net Reference Value (NPV) and Internal Rate of Return (IRR) as a determinant of viable investment,
    4. ten (10) paragraphs of evidence about three (3) different types of aircraft and leasing arrangements, and
    5. five (5) paragraphs of evidence about managing the risks of organisation accidents by reference to the James Reason principles in managing risk.
46. That evidence may be relevant to those with an interest in aviation including the views of the first respondent with respect to government decision-making as it relates to the national carrier however it is difficult to see how it is evidence relevant to the “fit and proper” person test as it relates to the first appellant as required by the CAA or his position as Acting CEO of ANL. There is an absence of evidence with respect to the first respondent having considered each of the matters in s 50(1) with which he must deal, even if that evidence was to depose to having given particular matters no weight or concluding a particular matter was irrelevant or that he had balanced particular matters against other things and in the end had come to an adverse decision.
    
47. Nor did the first respondent make reference to the relevant statutory criteria he was considering when he first gave notice on 7 February 2024 of his intention to make an adverse decision (see Annexure ‘A’ to affidavit of the first respondent filed 16 April 2024). Nor in his Decision did he make reference to having taken into account the statutory criteria in coming to the Decision.
    
48. With respect to the specific submissions made on behalf of learned Counsel for the respondents, that s 50(1)(f) and (g) of the CAA were considered, those submissions, respectfully, take the matter no further. Firstly, considering only two factors in a list of seven factors would not meet the requirements of the Act. Secondly, even if the Court was satisfied that the evidence contended did in fact address ss 50(1)(f) and (g) of the Act, s 50(f), which requires the consideration of any offence committed by the first appellant before the coming into operation of the Act has no relevance to the facts of the matter, and with respect to s 50(1)(g), there is no persuasive evidence that the first appellant had committed a transport safety offence or had contravened or failed to comply with any regulation or rule made under the CAA.
    
49. The failure of the first respondent to meet the requirements of the Act is sufficient to uphold the appeal.
    
50. The Court proposes however to also address some particular matters that arise on the appeal and the submissions by way of response.
    
51. The expression “fit and proper person” has been the subject of judicial consideration and construction as evidenced by the cases cited by Mr Molloy, Counsel for the appellants.
    
52. In Hughes & Vale Pty Ltd v State of New South Wales (No 2) (1955) 93 CLR 127, [1955] HCA 28, cited with approval by Frost CJ (Williams J agreeing) in Costello v Controller of Civil Aviation [1977] PNGLR 476, Dixon CJ said at page 156:

....The expression “fit and proper person” is of course familiar enough as traditional words when used with reference to offices and perhaps vocations. But the very purpose is to give the widest possible scope for judgment and indeed for rejection. “Fit” (or idoneus”) with respect to an office is said to involve three things, honesty, knowledge and ability: “honesty to execute it truly, without malice affection or partiality; knowledge to know what he ought duly to do; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty to neglect it Coke”.

53. The High Court of Australia again considered the matter in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33. The matter concerned an appeal from the Full Court of the Federal Court of Australia exercising original jurisdiction under the Administrative Decisions (Judicial Review) Act 1977 Cth. The Full Court had before it applications for orders of review by Alan Bond and others in respect of an inquiry conducted by the Australian Broadcasting Tribunal. Mr Bond, (the first respondent), by virtue of his shareholding in Dallhold Investments Pty. Ltd., was able to determine the composition of the Boards of Directors of Bond Media Ltd. and the sixth to ninth respondents. The Tribunal held an inquiry as to the renewal of the commercial television licence of the sixth respondent. One of the issues at that inquiry was whether, by reason of the settlement of a defamation action between the sixth respondent and Sir Joh Bjelke-Petersen, the then Premier of Queensland, it was no longer a fit and proper person to hold its commercial television licence. The Tribunal expressed the view that Mr. Bond "would not be found to be a fit and proper person to hold a broadcasting licence" and held that, by reason of his control over the sixth to ninth respondents, those respondents were "no longer fit and proper persons within the terms of s. 88(2)(b)(i) of the Broadcasting Act ". That issue was determined in favour of the sixth respondent.
    
54. On appeal, Toohey and Gaudron JJ said:
    

The expression "fit and proper person", standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.

.......

When the question is whether, having regard to its character or reputation, a company is fit and proper, the answer may be given by reference to the conduct, character or reputation of the persons by and through whom it acts or who are otherwise relevantly associated with it. The identity of the persons relevant to the character and reputation of a company will necessarily vary according to the circumstances of the company under consideration. At one extreme, if a person regularly exercises control in all important matters affecting the company's activities, then, ordinarily, the question will be sufficiently answered by reference to that person. At the other extreme, if no person is in a position of control or if one person, although in a position to exercise control, regularly delegates that control to others, then it will ordinarily be necessary to have regard to the persons who manage the company's affairs and activities. The question whether it is sufficient to have regard to one person or necessary to have regard to others when determining whether a company is fit and proper is one that depends on the circumstances of the company and not on any legal requirement imported by the expression "fit and proper". It follows that, in appropriate circumstances, the question of the fitness and propriety of a company to hold a commercial licence under the Broadcasting Act may be determined by reference to the conduct, character or reputation of a single person associated with it.

55. In Su v Tax Agents’ Board of South Australia [1982] AATA, Davies J said:
    

....If a lawyer is convicted of fraud, his name may be struck from the roll of practitioners, for fraud is inconsistent with the practice of law. If a doctor is convicted of a serious offence relating to illegal drugs, his name may be struck from the register because the offence is inconsistent with the task which medial practitioners perform. If a tax agent is convicted of an offence of tax evasion, his name may be taken from the register for tax evasion is inconsistent with the role which tax agents are called upon to perform.

56. In Su, the Court found that the failure of a tax agent to comply with their own taxation obligations was relevant to fitness and propriety as it may result in adverse treatment of the clients of that agent and the Commissioner of Taxation having a reduced confidence in the competence with which those returns were prepared.
    
57. Having regard to the authoritative pronouncements as outlined, the Court accepts the submission on behalf of the appellants that the notion of ‘fit and proper’ when properly considered must relate to the particular person and office or position they hold.
    
58. The Court further accepts that over and above his failure to address the relevant statutory requirements the first respondent considered matters that do not directly relate to the first appellant and a fitness and propriety assessment of his position as Acting CEO of ANL. The most recent allegations made against ANL, its Board and the National Executive Council, as contained in the affidavit of the first respondent filed 9 August 2024 concern matters outside the jurisdiction of the respondents. The respondents are regulators, responsible for overseeing aviation safety and rules across the sector. Decisions with respect to the strategic direction of the national airline fall within the remit of the Board or are taken where appropriate, by the Executive branch of government.
    
59. The Court accepts the submissions on behalf of the appellants that in reaching the Decision the first respondent did not give sufficient recognition to the detailed response to the first respondent’s stated concerns or the timetable in which the events unfolded. It may be unsurprising, for example, that the first appellant and the General Manager, Ms Waringe, were as one in their response to the audit. It would not, in and of itself, suggest a lack of independence. Further, little recognition was accorded to the first appellant’s appointment having been made on 23 February 2023, the requirement that he thereafter sit for a “fit and proper” person test (that finding made in April 2023), the restructure in the operational departments of ANL and his explanation that a decision had been made in the circumstances to capture those changes into the Corporate Policy and Procedures Manual during the Annual Manual Review so they could be submitted as one explanation. The annual manual took place on 30 November 2023. The audit was conducted from the 12 to 24 November 2023. The complaint of the first respondent, then appeared to be not with the structure of the organisation but that the first respondent had failed to give prior notification to it and seek the second respondent’s approval.
    
60. Nor does the evidence, on fair consideration, permit a conclusion that the safety concerns of the respondents had not been addressed in a fulsome or timely manner by the first appellant. The first respondent’s recent issuance of a Maintenance Organisation Certificate (MOC) and ANL’s Air Operator’s Certificate (AOC) supports such a conclusion. It is evidence at odds with the respondents’ assertion of continuous unaddressed serious safety issues by ANL and imminent risk (see respondents’ written submissions at [51]). The fact that the renewal is for a period of six months only, as opposed to the usual two years, as submitted on behalf of the respondents, is, respectfully, not to the point. It would be a potential dereliction of duty for an aviation regulator to issue an AOC and MOC if it held to a view of continuous unaddressed serious safety issues by an airline and imminent risk. Given the second respondent’s charter, and in light of the first respondent’s safety concerns, the issuing of the relevant certificates by the second respondent is evidence to which the Court is entitled to accord significant weight in the circumstances.
    
61. The evidence of Captain Damiu Taufa, General Manager for ANL’s Flight Operations does not identify any imminent safety risks. He was not required for cross-examination. His evidence at [22], [23] and [25] of his affidavit filed 7 August 2024 is:
    
    22. On the morning of Friday 26 July 2024, Marco McConnell – ML, Acting General Manager Quality Safety, Risk and Audit of ANL met with CASA who accepted ANL’s responses to the findings or safety issues raised in the audit.
    23. Following on from the meeting of 26 July 2024, the Director, the First Respondent, approved the Applications and renewed ANL’s MOC and AOC which were provided to ANL on the afternoon of Friday 26 July 2024.

....

25. The grant of the Applications demonstrated that it is not contrary to the interest of aviation safety that ANL continue to operate......
62. The MOC is current from 26 July 2024 to end of 31 January 2025, a renewal application not required before 2 December 2024. Signed by the first respondent and issued pursuant to s 47(3) of the CAA and CAR Part 145, it authorises ANL to perform maintenance activities.
    
63. The application for renewal and approval of the AOC, in evidence, runs to six (6) pages. The Certificate for renewal is not attached however it is not in contest that it was renewed.
    
64. Given the chronology from appointment to audit, against a background of ongoing restructure and the implementation of important strategic decisions, and given the evidence that enables a conclusion that the concern notices were responded to, the Court accepts the submission on behalf of the appellants that the Decision presented aa a disproportionate response to the respondent’s concerns, one that was punitive as opposed to protective in line with the structure of the Act and its objects in s 2.
    

CONCLUSION AND ORDERS

65. In conclusion the Decision that the first appellant ceased to be a fit and proper person to hold the position of Acting CEO of ANL cannot be sustained.
    
66. This is because the first and or second respondent failed to address the issue of fitness and propriety as it related to the first appellant as required by s 50(1) of the CAA. For this reason alone, the Decision should be reversed.
    
67. The Court makes the following orders:
    
    1. The appeal be allowed.
       
    2. The adverse decision of the first respondent and/or the second respondent contained in the letter dated 21 March 2024 addressed to the first appellant (as Acting Chief Executive Officer – Air Niugini Limited) be quashed.
       
    3. The respondents pay the appellants’ costs of and incidental to the appeal to be agreed or taxed.
       
    4. The time for entry of these orders be abridged to the time of settlement by the Registrar, which shall take place forthwith.
       

Ashurst PNG: Lawyers for the Plaintiffs
Acting Solicitor General, Department of Justice and Attorney General: Lawyers for the Defendants