When Does a Lease become a Lease? When a LAME Wants to Work from his Van
On the 14th May 2008, the Administrative Appeals Tribunal had to adjudicate between the airport lessee of Archerfield Airport (Archerfield Airport Corporation Pty Ltd) in Queensland and an avionics LAME who plied his trade from a van on the airside of Archerfield Airport.
There were a number of threads to the problem. The lessee was the private owner of possessory rights in respect to both the land side and the airside of Airport. The lessee did not control the operational aspects of the conduct of flying or similar operations at the airport. The control still resided in Airservices Australia or a derivative of the organisation. These possessory rights of the lessee came from a lease with the Commonwealth of Australia. In short, for money, the Commonwealth of Australia allowed the lessee to have complete possessory rights to anything other than operational control.
Additionally, the Commonwealth required the lessee to adhere to a regime that ensured the safety of all persons using the airport and regulating or prohibiting the use of vehicles at Federal airports. These requirements were enshrined in the Federal Airports Corporation Act 1986. In 1996, the push to “sell” airports for money became unstoppable for the Commonwealth. Pursuant to the Airports Act 1996 a series of regulations were enacted called Airports (Control of On-Airport Activities) Regulations were promulgated on 15th May 1997.
The effect of the regulations were that the lessee was able to grant or restrict the driving of vehicles onto the airside of the airport. This right seemed to be unfettered. Ostensibly, the lessee, if challenges as to any restriction imposed, could point to the regulations as a means to prevent vehicles access.
Enter the lowly LAME. This private contractor had since 1994, has a vehicle and personal pass to enter airside from the FAC to ply his trade. He had not come under notice as an undesirable for any reason.
When the airport was leased, a commercial arrangement came into existence between the Commonwealth and the lessee whereby the lessee for the payment of a large sum, strictly commercial in confidence, was able to charge whatever the market will bear for access, employment on the airport, leasing of hangers and any other charge restricted only by the lessee’s commercial imagination.
Prior to the lease, the lowly LAME had both an authority to drive a vehicle airside and an authority to use a vehicle airside which had been issued by the FAC. After the lessee took control of access, and after some delay the lowly LAME was advised in a letter as follows:
“Your airside access to Archerfield Airport will be cancelled on the 16th November 2001 unless you can provide a satisfactory written statement to the AAC why your approval should continue.
You will also need to be aware that the AAC is currently reviewing all trading on the airport that is conducted from motor vehicles. In the future you will need to apply for a licence to conduct your business whether landside or airside on the airport and a licence FEE will apply. Bases on your written statement for access to the airport an appropriate fee and level of access will be determined by the AAC Board”.
There was something of a Mexican standoff. The LAME did not apply for the licences or pay the fees and the lessee (ACC) did not restrict the LAME’s access.
It can be seen now what the real problem was. When the airport was under the control of FAC, the LAME was allowed access to ply his trade without a licence fee being payable. Now the airport was under the control of a commercial operator that was paying lease payments to the Commonwealth of Australia, the lessee sought to recoup and enhance his return by imposing a licence to conduct any sort of business. This licence and fee to conduct business was dressed up as the control of access of vehicles pursuant to the said regulations.
In 2006, the Commonwealth hit the terrorism panic button in respect of airfields all over Australia and the Airport Transport Security Act 2004 was enacted. This galvanized the lessee to require the LAME and all other seeking airside access to apply for both an Authority to Drive Airside (ADA) and an Airside Vehicle Permit (AVP).
If you have followed this article thus far, you may be forgiven for feeling a bit of regulation overkill and confusion. And so it prevailed in the Administrative Appeals Tribunal.
The counsel for the LAME put his case as follows:
(a) He had been issued both the ADA and the AVP in 1997 and these remained current up to 2006 when the lessee purported to withdraw them and this decision was reviewable.
(b) He had been granted access by a letter on 18 December 2001 and the decision in 2006 amounted to a decision to withdraw the privilege and was reviewable.
(c) The lessee (AAC) has refused to grant him either the ADA or the AVP following his application in May 2006 and this decision was reviewable.
The tribunal Deputy President went straight to the essential question “Whether AAC was entitled to impose the requirement of having a commercial licence upon commercial operators like the LAME, who seek to undertake their business on the airside of Archerfield Airport?”
The tribunal went on to say:
“As it seems to me the entitlement of AAC to require Mr Hammond to obtain a commercial licence is not a matter of satisfying criteria, rather that entitlement is justified, if at all, on the basis of the power in Regs 125(7) and 127(5) which permit an ADA and an AVP”. The Deputy President relied on a judgement of Cooper J in connection with the privatization of Brisbane Airport namely.
“The objective of the Airports Act was to carry into effect a policy to sell specific airports in Australia to qualified companies by creating a long term interest in the airport sites of each of the named airports to which the Act applies. The creation of those leasehold interests brought into operation all the common law rules touching an concerning leasehold interests in land and the rights and obligations of the lessee to the use and enjoyment of the land during the term of the lease”
The deputy went on to say:
“So viewed, it seems perfectly reasonable to impose a fee upon those who would use Archerfield Corporation’s land for the purpose of earning income where those persons are not otherwise compensating Archerfield Corporation for the use being made of the land”.
The judgment of Copper J referred to the lessee having the right to apply common law rules as they affect the rights and obligations of a third party entering the land which ostensibly is open to the aviation community to conduct business. The LAME is cast in the role of a sub lessee being charged a fee to enter the land not for something the lessee provides but rather to speak with and perhaps a service to a client. The comparison to a shopping centre is apposite.
Westfield Ltd control many shopping centres about Australia. These centres are open to the public to enter and buy groceries from possibly Coles or Woolworths. Woolworths pay Westfield a lease payment for t he privilege of conducting business from the airport, sorry, the shopping centre. Is there any common law rule that allows Woolworths or Coles to add a licence fee to all shoppers who might wander into their premises to buy groceries when they reach the checkout? I am not aware of any such rule.
If AAC can impose a licence fee on a LAME to enter upon the land at Archerfield and conduct business are they not sub leasing the land to that LAME for the period of the licence? According to the Airports Act no subleasing is permitted without recourse to the Commonwealth minister. Would this licence privilege detract from the strictures of the Security legislation?
It would seem to be that the decision is based on some commercial rational for an airport lessee to make money rather than common law rules as they apply between lessors and lessees.
Watch this space.