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National Airports Corporation Ltd v Oraka [2022] PGNC 560; N10074 (22 November 2022)

N10074

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CIA NO. 16 OF 2022 (IECMS)

BETWEEN:
NATIONAL AIRPORTS CORPORATION LIMITED
Appellant

AND:
BENEDICT IGO ORAKA
in his capacity as Director of the Civil Aviation Safety Authority of Papua New Guinea
First Respondent

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

Waigani: Tamade AJ
2022: 18^th & 22^nd November

CIVIL – appeal – decision of Civil Aviation Safety Authority – closure of Nadzab and Kiunga Airports – Civil Aviation Act – Section 310 – eligibility for Aerodrome Operating Certificate – requirements for Fit & Proper Person test not met by certain senior officers – Civil Aviation Rules – Part 139 – appellant has no standing to appeal – Civil Aviation Act – Sections 50, 51- appeal dismissed

Legislation:

Civil Aviation Act 2000 (Amended)

Counsel:

Mr Noel Larupa Ako, for the Appellant
Mr Robin Kembo’nga Kawat, for the Respondents

22^nd November, 2022

1. TAMADE AJ: This is an appeal pursuant to section 310 of the Civil Aviation Act 2000 (CAA) by the Appellant against the decision of the Director of the Civil Aviation Authority Mr Benedict Igo Oraka in refusing to renew or extend the Aerodrome Operating Certificate (ADOC) for both Nadzab and Kiunga Airports.

2. The Appellant NAC is the affected document holder^[1] for Nadzab and Kiunga aerodromes. The ADOC for both Nadzab and Kiunga aerodromes had expired on 31 July 2022 and on 1 July 2022, NAC prior to the expiration of the ADOC submitted applications to the First Respondent for renewal for both aerodromes.

3. On 19 August 2022, the First Respondent wrote to the NAC and informed it that it is not eligible for renewal of its’ ADOC for Nadzab and Kiunga aerodrome as the NAC did not comply with Part 139 of the Civil Aviation Rules. Also on 30 August 2022, the First Respondent wrote to the NAC and informed it that all operations into Nadzab and Kiunga aerodromes shall cease until such times the non-compliance as found by the Regulator is rectified and the ADOC’s can be renewed. These are the decisions the subject of this appeal in which the NAC states in its’ Notice of Appeal filed on 1 September 2022 that these decisions are “Adverse Decisions”.

4. The decision not to renew the ADOC’s for Nadzab and Kiunga airports were arrived at after the Respondents conducted surveillance and safety audits into the operations of Nadzab and Kiunga aerodromes.

5. The outcome of these investigations reveal that Nadzab Airport had a Total Risk Value of 12.12 which was translated to mean 0 months period with 21 non-compliances. Nadzab airport was therefore not eligible for a renewal as it had significantly failed its safety requirements and its’ failed rating meant it should shut down operations.

6. For the Kiunga Airport, after the surveillance and safety risk audits, Kiunga airport was found to have a Total Risk Value of 10.60 with 7 non-compliances. This meant that Kiunga airport was also not eligible for a renewal of its’ ADOC as it had also significantly failed its safety assessment according to the required standard in the aviation industry and also had to shut down operations.

7. Subsequent to the decision not to renew the ADOC’s for Nadzab and Kiunga airports, on 31 August 2022, Niusky Pacific Limited (NSPL) which function is to provide air traffic services, aeronautical navigation services, aeronautical surveillance services and aeronautical communication services to airlines and aircrafts operators using PNG’s airspace, issued a Notice to Airmen (NOTAM) on direction from CASA for Nadzab and Kiunga Airports. These NOTAMS were for the closure of Nadzab and Kiunga airports. On 2 September 2022, NSPL after receipt of the Court Orders of 1 September 2022 of this Court, issued a subsequent NOTAM cancelling the NOTAM of 31 August 2022.

8. Having read the various affidavits of Mr Rex Kipongi, the Managing Director and CEO of NAC in relation to this matter and the Affidavit of Mr Benedict Igo Oraka as the Director of CASA in relation to this appeal, it is of importance to note that Mr Oraka states in his affidavit filed on 7 September 2022, that on 1 September 2022, the National Court issued an interim stay of the decisions of CASA the subject of this appeal and on the NOTAM issued by NSPL for the cessation of operations at Nadzab and Kiunga airports. Mr Oraka refers to section 312 of the CAA that the decision of the Minister, the Head of State or the Director of CASA under appeal shall continue in force pending determination however because of the Court Orders of 1 September 2022 which stayed the decision on appeal, Mr Oraka was forced and or was compelled to grant the renewal of the ADOC’s for Nadzab and Kiunga airports even though the blatant regulatory non-compliances and safety issues still existed without being rectified by NAC and Mr Oraka did so in fear of being in contempt of Court.

9. On 5 September 2022, the ADOC’s for Kiunga and Nadzab airports were granted as a consequence of the orders of the Court and came into operation until 28 February 2023. This allowed operations to continue for Nadzab and Kiunga aerodromes. I should remind myself that from the evidence of the parties, the safety issues and non-compliances found in the audit and safety reports still remained as stated by Mr Oraka of CASA, this is fundamental to the safe operations of Nadzab and Kiunga airports and this Court should thread carefully in assessing as a priority, the safety in the operations of Nadzab and Kiunga airports.

10. I have read the Affidavit of Mr John Kose Isu who is the Executive Manager Safety Assurance and Regulatory Compliance with NAC filed on 1 September 2022. What is of interest in Mr Kose’s Affidavit is that he states in paragraph 5 of his affidavit that essentially, the risks associated with the operations of Nadzab and Kiunga airports in no way relate to physical risks but relate to statutory requirements for the Fit and Proper Person Test which is a pre-qualification to any ADOC holder being in this case, the NAC. Having heard submissions by Mr Kawat of the Respondents, it is the Respondents position that because Mr Rex Kiponge who is the Managing Director and Chief Executive Officer of the NAC is one of the persons in the audit and safety report findings that did not meet the Fit and Proper Person Test, this was a reason amongst others for the refusal to renew the ADOC’s for both Nadzab and Kiunga airports and this was also the reason that the communication with NAC from CASA did not go to Mr Kiponge but to Mr Isu at NAC.

11. I am satisfied that this appeal is lodged within 28 days as per section 311 of the CAA.

12. It should be stated that Mr Ako of the Appellant has taken the Court at length through the procedure under the CAA for the Court to understand the aviation industry in so far as the decisions the subject of the Appeal entailed.

Whether the First Respondent complied with the mandatory provisions of section 51 (2) of the CAA when he made the Adverse Decisions dated 19 August 2022 and 30 August 2022?

13. This is the issue raised by the Appellant in this appeal. The NAC basically claims that CASA as the Regulator failed to comply with section 51(2) of the CAA. Section 51 of the CAA is in the following terms with the relevant sections underlined:

51. RIGHTS OF PERSONS AFFECTED BY PROPOSED ADVERSE DECISIONS.

(1) In this section, unless the context otherwise requires:

“adverse decision” means a decision of the Director to the effect that a person is not a fit and proper person for any purpose under this Act;
“affected document holder,” in relation to a person directly affected by an adverse decision, means the holder of or the applicant for the aviation document;
“person directly affected”, in relation to an adverse decision, means the person who would be entitled under Section 310 to appeal against that adverse decision;
“person on the basis of whose charter the adverse decision arises”, in relation to an adverse decision made or proposed to be made on the grounds referred to in Section 50, means the person whom the Director assesses as not being a fit and proper person.

(2) Where the Director proposes to make an adverse decision under this Act in respect of any person, the Director, by notice in writing, shall:

(a) notify the person directly affected by the proposed decision of the proposed decision; and

(b) subject to Subsection (4), inform that person of the grounds for the proposed decision; and

(c) specify a date by which submissions may be made to the Director in respect of the proposed decision, which date shall not be less than 21 days after the date on which the notice is given; and

(d) where appropriate, specify the date on which the proposed decision will, unless the Director otherwise determines, take effect, being a date not less than 28 days after the date on which the notice is given; and

(e) notify the person of the person’s right of appeal under Section 310, in the event of the Director proceeding with the proposed decision; and

(f) specify such other matters as in any particular case may be required by any provision of this or any other Act.
(3) Where the Director gives a notice under Subsection (2), the Director:

(a) shall also supply a copy of the notice to:

(i) any person on the basis of whose character the adverse decision arises, where that person is not the person directly affected by the proposed decision; and

(ii) any affected document holder, where the Director considers that the proposed decision is likely to have a significant impact on the operations of the document holder; and

(b) may supply a copy of the notice to any other affected holder.

(4) No notice or copy of a notice given under this section shall include or be accompanied by any information referred to in Section 50(1), except to the extent that:

(a) the notice or copy is supplied to the person to whom the information relates; or

(b) that person consents to the supply of that information to any other person.

(5) Where a notice or a copy of a notice is given to a person under this section, the following provisions shall apply:–

(a) it shall be the responsibility of that person to ensure that all information that that person wishes to have considered by the Director in relation to the proposed decision is received by the Director within the period specified in the notice under Subsection (2)(c), or within such further period as the Director may allow;

(b) the Director may consider any information supplied by that person after the expiry of the period referred to in Paragraph (a), other than information requested by the Director and supplied by that person within such reasonable time as the Director may specify;

(c) the Director shall consider any submission made in accordance with Paragraph (a), other than information requested by the Director and supplied pursuant to a request referred to in Paragraph (b).
(6) After considering the matters referred to in Subsection (5), the Director shall:

(a) finally, determine whether or not to make the proposed adverse decision; and

(b) as soon as practicable thereafter, notify in writing the person directly affected, and any other person of a kind referred to in Subsection (3)(a) of:

(i) the Director’s decision and the grounds for the decision; and

(ii) the date on which the decision will take effect; and

(iii) in the case of an adverse decision, the consequences of that decision and any applicable right of appeal referred to in Section 49(5), 53(7) or 54(4).

14. In the Affidavit of Mr Kiponge filed on 7 September 2022, he states that the appropriate Fit and Proper Person (FPP) Fees for the named officers were paid however CASA delayed the process to conduct the FPP Test on the Senior Officers from 3 July 2020 until 30 August 2022 when the adverse decisions were made to cease operations on Nadzab and Kiunga airports. Mr Kiponge also states in his affidavit that in regard to the Non-Compliance findings of Nadzab Airport, one of the non-compliance findings was categorized as Level 0 which amounted to a disqualification using CASA’s Aerodrome Risk Profiling System (ARPS) with a risk value of 10 relates to the Fit and Proper Person requirement under Part 139.7 (2) of the Civil Aviation Rules. The total risk finding for Nadzab airport is 12.12. Mr Kiponge states in his Affidavit that if you take away one finding for the Fit and Proper Person test which carries a risk value of 10 points, the other remaining findings carry only a 2.12 Risk Value and therefore the Nadzab airport is qualified for 4 years of ADOC certification. I am of the view that Mr Kiponge’s view is misconceived. There still remains a high-risk value of 10 regarding the Fit and Proper Person test, which does not evaporate or diminish until it is rectified as imposed and directed by the Director of CASA as it is fundamental in my view to the safety operations of Nadzab and Kiunga Airports for that matter.

15. Mr Kiponge states the same in his evidence as to the state of Kiunga Airport. He states that Kiunga Aiport’s findings have a rating of 10.6. He states that if you take away one finding which is in regard to the Fit and Proper Person Test which carries a risk value of 10 points which is a very high risk meaning it should amount to a closure of the airport according to the ARPS, the 0.6 finding gives Kiunga airport, a qualification of 5 years. This is again misconceived and grossly negligent for a Managing Director and Chief Executive Officer of NAC to disregard, dismiss and cancel a high-risk factor of non-compliance with the Fit and Proper Person Test for those in senior and management roles in the operations of both Nadzab and Kiunga Airports.

16. The Fit and Proper Person test may not be physical as Mr Isu seems to state in his affidavit as to the operations of the airports, but it is still pertinent pursuant to the CAA as it is connected to the competency of those who manage and run the Nadzab and Kiunga aerodromes and it is fundamental to safety. I would think that is why it is captured in the CAA and Regulations surrounding the safety of the civil aviation industry, humans, persons operate these airports, they have to be competent enough pursuant to the requirements of the law to operate these airports. Mr Isu and Mr Kiponge seem to trivialise the requirement for a Fit and Proper Person Test, and this should be alarming to the stakeholders of the industry, to the lives of the employees and the travelling public who depend on this industry and to the world of business, commerce, governance and to national security to state the obvious.

17. Mr Kiponge strongly asserts in his evidence that he has met the Fit and Proper Person test under section 50 of the CAA as per a letter dated 6 May 2022 from CASA. I find that the letter Mr Kiponge refers to is in regard to the ADOC for Port Moresby International Airport- ADOC No.139/22 and it is misleading to this Court of Mr Kiponge to attempt to pull a wool over the Court’s eyes so to speak to say that it refers to the Nadzab and Kiunga ADOC’s, I find that it does not.

18. Given that Mr Kiponge is a person found by CASA as well as others who are yet to be certified as passing the Fit and Proper Test of Rule 139.51(a(1) of the Civil Aviation Rules, if he is aggrieved by these decisions by CASA as to the ADOC for Nadzab and Kiunga airports specifically in regard to the Fit and Proper Person Test, I am of the view that he is a person under section 51(1) of the CAA. Section 51 (1) of the CAA defines a “person on the basis of whose charter the adverse decision arises” or “a person directly affected” by the decision of the Director as not being fit and proper within the meaning of the Act. Mr Kiponge and others who hold the positions of Executive Manager SARC, General Manager Regional Airports, Airport Operations Manager, Senior Airport Safety Officer, Airport Fire Chief and AvSec Team Leader as identified by CASA as not meeting the FPP test are all persons directly affected by the decision of the First Respondent and therefore they should have all individually appealed the decision of the First Respondent if they are aggrieved by it as I am of the view the decisions as to their capacity as qualified in the Fit and Proper Person test goes to their individual and personal competencies and credibility.

19. I am of the view that NAC being the affected document holder of the respective ADOCs under section 51(1) of the CAA does not have the standing to lodge an appeal on the adverse decision of the First Respondent. An adverse decision therefore under section 51(1) of the CAA refers to the decision of the Director in regard to a person not being a fit and proper person within the meaning of the Act. NAC can not be a “person” for the purpose of the Fit and Proper Person test, NAC is the affected document holder.

20. Mr Kawat of the Respondents argues that the decision the Appellants are challenging is the decision not to renew the ADOC’s for Nadzab and Kiunga airports, however, they really should be challenging the decision of the Fit and Proper Person Test as that is an adverse decision within the meaning of section 51(1) of the CAA. Under section 51(1) of the CAA, an adverse decision is:

“adverse decision” means a decision of the Director to the effect that a person is not a fit and proper person for any purpose under this Act

21. Section 50 of the CAA sets out the criteria for a Fit and Proper Person test as:
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;

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

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

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

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

(f) any offence committed before the coming into operation of this Act, any evidence that the person has committed a transport safety offence or has contravened or failed to comply with any 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.

(4) Subsection (1) applies to a body corporate with the following modifications:–

(a) Paragraphs (a), (b), (c), (e) and (f) of that subsection shall be read as if they refer to the body corporate and its officers; and

(b) Paragraph (d) of that subsection shall be read as if it refers only to the officers of the body corporate.

(5) Subject to Subsection (6), where the Director proposes to take into account any information that is or may be prejudicial to a person, the Director shall, as soon as is practicable, disclose that information to that person and give that person a reasonable opportunity to refute or comment on it.

(6) Nothing in Subsection (5) shall require the Director to disclose any information the disclosure of which would be likely to endanger the safety of any person.

22. Mr Ako’s submissions that NAC falls into the category of a person affected by an adverse decision of the Director of CASA is misconceived. The Appellant, therefore, does not have standing pursuant to section 51 of the CAA to lodge an appeal as far as the decision the subject of the appeal is an “adverse decision” within the meaning of the CAA as it does not concern NAC who is the affected document holder. The decision the subject of the appeal is of the non-renewal of the ADOC over Nadzab and Kiunga aerodromes. The adverse decisions concern the Fit and Proper Person test as one of the non-compliance findings as per the decision not to renew the ADOCs for Nadzab and Kiunga Airports.

23. Mr Ako’s submissions that the Director of CASA failed to comply with section 54(3) of the CAA to give notice to the NAC in regard to revoking an Aviation Document or imposing conditions is also misconceived in my view as in this particular case, the Director refused to renew the ADOC as opposed to revoking an existing ADOC. The ADOCS for Nadzab and Kiunga aerodromes expired on 31 July 2022.

24. I am of the view that the premise of this appeal pursuant to section 51(2) of the CAA is misconceived and misleading by the Appellant. The decisions of the Director of CASA as referred to in the letters of 19 August 2022 and 31 August 2022 are not adverse decisions within the meaning of the CAA.

25. The NAC does not have standing to lodge an appeal on an “adverse decision” within the meaning of the CAA as it is the affected document holder and not the person affected or a person who would have standing as a person who does not meet a Fit and Proper Person test within the criteria set by section 50 of the Act.

26. The conduct of the Appellant in this case on a misconceived and misleading foundation has resulted in interim Court Orders compelling the Respondents to renew the ADOCs for Nadzab and Kiunga aerodromes at the backdrop of vital and serious safety issues that remain unrectified at the time the ADOCs were issued on 5 September 2022, and which will operate until 28 February 2023.

27. Mr Kiponge as the Managing Director of NAC should in my view as a person affected by the adverse decision of the Director of CASA in relation to the Fit and Proper Person test, as one of the Officers affected, effectively, he should have stepped down from his role as the Managing Director when he became aware of the decision of the Director of CASA. The decision not to renew the ADOC’s for Nadzab and Kiunga based on the Fit and Proper Person Test effectively suspends his duties as Managing Director of NAC in my respectful view. If he was aggrieved by the adverse decision as he clearly is, he was within his right to lodge an appeal under his own name as the decision goes to his personal competency and credibility and or he should remain out of office until he passes the Fit and Proper Person Test and gets the clearance from the Director of CASA.

28. The evidence by Mr Kiponge concerning the dispute, correspondence and media publications with the Director of CASA and CASA on the ADOCS on Nadzab and Kiunga Airports are personal to Mr Kiponge on his competency and credibility and bring into disrepute with respect the management and operation of NAC. The process of the renewal of the ADOCS for Nadzab and Kiunga aerodromes should be given the integrity and credibility of the due process by Mr Kiponge stepping aside however this is tainted with the personal biases of Mr Kiponge as the Managing Director of the NAC. Not to mention the safety in the civil aviation industry is wanting because it appears that key people in the senior management of NAC do not prioritise safety, they do not regard the competency of senior personal in the industry as a fundamental safety issue set by law. This should worry the industry, the Regulators and the country.

29. The duties of CASA should not be held at ransom or at whim by the conduct of busy bodies. CASA is mandated to regulate the aviation safety in PNG and that duty comes with a high level of ensuring compliance and safety standards in the industry. Be that the ADOCS for Nadzab and Kiunga aerodromes have been renewed to February next year, NAC should work to meet the standards imposed by CASA to ensure due and utmost compliance of the laws and regulations around the operations of Nadzab and Kiunga aerodromes.

30. Any interim orders granted in these proceedings therefore shall be dismissed including this appeal as being without any merit and is misconceived and misleading.

31. The Court, therefore, makes the following orders:

1. This appeal is dismissed as being without any merit and is misconceived and misleading.
1. The Appellants shall meet the Respondents costs on a solicitor-client basis as punitive for lodging a misconceived and misleading appeal.
   

Orders accordingly.
________________________________________________________________
Warnershand Lawyers: Lawyers for the Appellants
Kawat Lawyers: Lawyers for the Respondents

^[1] Section 3 of the Civil Aviation Act 2000, “aviation document” means a licence, permit, certificate, or other document issued under this Act to or in respect of any person, aircraft, aerodrome, aeronautical procedure, aeronautical product or aviation related service”.