Opinion Number. 1795

Subject

AVIATION CHARGESPROPOSED CHARGES FOR USE OF COMMONWEALTH AIRPORTS AND AVIATION FACILITIES: WHETHER PROPOSED CHARGES CONSTITUTE FEES FOR SERVICES: PROPOSED ANNUAL FEES FOR AIRCRAFT OPERATED OTHER THAN ON SCHEDULED SERVICES: PROPOSED CHARGES PAYABLE BY OPERATORS OF SCHEDULED AIRLINE SERVICES: MEANING OF ‘ROUTE CHARGES’: MEANING OF ‘LANDING CHARGES’: WHETHER PROPOSED CHARGES WOULD CONSTITUTE BREACH OF CONTRACTS BETWEEN COMMONWEALTH AND CERTAIN AIRLINE OPERATORS: WHETHER PROPOSED CHARGES WOULD CONSTITUTE BREACH OF TERMS OF AIRPORT LEASES: AUSTRALIAN NATIONAL AIRWAYS: AIRPORT REVENUE

Key Legislation

AIR NAVIGATION REGULATIONS reg 110A, Pt IX

Date
Client
The Attorney

(1)  Cabinet has approved in principle a proposal by the Minister for Civil Aviation to impose a scheme of charges on users of aerodromes and airways facilities provided by the Commonwealth.

(2)  The Attorney-General has been asked to advise on the legal position, in view of the existence of clauses in certain long-term contracts and leases which provide for the free use of landing grounds, and also to advise, if necessary, as to any alternative proposals for charge to airline operators and others which might be less likely to involve successful challenge through the Courts.

(3)  For the purpose of the scheme it is proposed that aircraft shall be divided into four classes—

Class (1)—Aircraft used for personal purposes of the owner.

Class (2)—Aircraft used by owners for their own business purposes, and not for remuneration.

Class (3)—Aircraft operated for remuneration, other than on scheduled airline services.

Class (4)—Aircraft operated on regular scheduled airline services.

The contracts and leases concerned apply only to the operators of aircraft in Class (4).

(4)  With regard to the first three classes, what is proposed is an annual registration fee or tax related to the size and type of the aircraft but not to the use of particular route. No question arises here in relation to the contracts and leases. Such charges, moreover, should not in my opinion be regarded as a tax but merely as a charge for the use of facilities to which the user would otherwise have no legal right. The charge could therefore be imposed under the Regulations without any amendment of the Act.

(5)  With regard to class 4, it is proposed that in the case of non-subsidised airlines a ‘route charge’ should be made. The amount of this charge would be related both to the type and size of aircraft and to the mileage of the route on which the aircraft is operated.

(6)  I understand that the proposed ‘route charges’ are analogous to what are known as ‘landing charges’ in other countries, and are designed to cover part of the cost of the provision and maintenance of airways facilities including aerodromes, taking-off and landing facilities.

(7)  A number of air service contracts have been entered into between the Commonwealth and airline operators which contain the following conditions in similar terms:

The Contractor shall conduct, in accordance with all the provisions of the contracts, aeroplane flights on trips from one terminal of the Service to the other terminal of the Service and vice versa …

The Contractor, at all times, shall have the right for purposes of the contract, to use, free of all Commonwealth charges (but without being relieved of any liability responsibility or charges to or by any other person or authority) any Commonwealth owned and controlled landing ground along the route of the Service, but shall be liable to the Commonwealth for any damage to Commonwealth property, and for any loss sustained or injury suffered by the Commonwealth, in respect of or arising out of such use.

(8)  In addition, these airline operators have entered into leases of areas at airports on which their offices, hangars and other buildings have been erected. Leases of ground for these purposes contain the following clauses:

It is mutually covenanted and agreed as follows:

That during the continuance of these presents the lessee may in common with others enter upon and use free of charge for the purposes of landing and departure of aircraft owned by or on hire to the lessee or flown by the lessee for test purposes after overhaul by the lessee or that portion of the … Aerodrome for the time being set apart for those purposes, but the privilege hereby conferred shall be personal to the lessee only, and shall not without the express consent in writing of the Director-General extend to or be exercisable by any person or company whose aircraft (whether owned by that person or company or not) the lessee may permit to be housed in the buildings erected or to be erected on the said land.

(9)  The principal contractor for the scheduled airline services is Australian National Airways. Their contracts are now almost to the point of expiry. It seems to me therefore that the proposed scheme of charges may be considered without any special regard to the terms of the contracts with the operators. The position is otherwise, however, with the leases of ground at airports. In the case of Australian National Airways, I am informed, the main leases are not due to expire until 1951.

(10)  In my opinion the proposed scheme of ‘route charges’ if applied to a lessee covered by the clause quoted above would be inconsistent with the Commonwealth’s covenant to permit the use free of charge, for the purposes of the landing and departure of aircraft, of the aerodromes to which the lease relates. In substance the charge proposed would be a charge for the use of the landing grounds and their facilities. The fact that they are called not ‘landing charges’ but ‘route charges’, and that the mileage travelled is a factor in fixing their amount, would not alter their substantial character. Operators who did not pay the charges, would as I understand the position, be prevented from using Commonwealth aerodromes for the purpose of conducting airline services. This would, I think, be an infringement of the lessees’ rights.

(11)  I have not considered in detail what remedy the lessees would have against the Commonwealth if their rights were overridden by Regulation or by Act. I assume that—as in Magrath v. Commonwealth (1944) 69 C.L.R. 156—the Commonwealth would fulfil its contractual obligations.

(12)  The right to use, free from Commonwealth charges, any Commonwealth owned and controlled landing ground includes, in my opinion, the right to such aids to the landing and departure of the aircraft as may properly be regarded as component parts of the aerodrome. I refer, for example, to such facilities as landing lights, boundary marks, beacons, and other signals.

(13)  In addition to facilities of this kind as adjuncts to landing grounds, the Commonwealth provides services which are necessary for safe air navigation and control. I refer here to such facilities as—

(a)  a radio communication system,

(b)  navigational aids such as radio beacons which facilitate safe navigation of aircraft,

(c)  the provision of meteorological data, and

(d)  optical aids to landing and navigation.

These are properly described as directional aids to navigation. A contractor or lessee would not, in my opinion, be entitled merely by virtue of the contract or lease to enjoy free of charge the services they afford.

(14)  Charges could, therefore, be imposed on the lessees in question, as well as on other operators of aircraft, in respect of services such as radio communication and other navigational aids. It would appear quite inappropriate, however, that a system of charges for these purposes should be related in any way to the size or weight of aircraft. On the other hand the mileage of the route regularly travelled and the frequency of journeys could, I think, properly be taken into account.

(15)  In expressing the view that charges could, consistently with the leases in question, be made for the supply of navigational aids such as those mentioned, I have taken into account the fact that under Part IX of the Air Navigation Regulations the installation and use of the necessary wireless apparatus for the use of some of these aids is compulsory. This does not, in my view, alter the fact that the Commonwealth supplies a service and is entitled to charge for it.

(16)  Charges for navigational aids are expressly contemplated by regulation 110A of the Air Navigation Regulations. I assume that a tariff of charges has not yet been issued in pursuance of sub-regulation (3) of that regulation.

(17)  I imagine that to impose substantial charges for the receipt of navigational aids may encounter psychological objections. These aids are provided largely in the interests of safe air travel. If, moreover, the charges are fixed in relation to the cost incurred by the Commonwealth in maintaining the particular service concerned, the revenue derived may not be sufficient for the purpose in view. These considerations, however, belong rather to the sphere of policy than to the strictly legal position.

(18)  Summing up, I do not think there is any legal objection to the charges proposed in the case of the first three classes of aircraft. Until the expiry of the present leases, however, I do not think that route charges on the lines contemplated could be imposed, without a breach of the leases concerned, on aircraft of the fourth class. With regard to the fourth class, charges for navigational aids may give scope for deriving some measure of airport revenue. But I do not know whether they would provide the kind of amount which is contemplated.

[Vol. 37, p. 360]