Wellington International Airport Ltd v New Zealand Air Line Pilots' Assoc Industrial Union of Workers Inc.

• Jurisdiction: New Zealand
• Judge: Arnold J
• Judgment Date: 21 December 2017
• Neutral Citation: [2017] NZSC 199
• Docket Number: SC 26/2017
• Court: Supreme Court
• Date: 21 December 2017

Between

Wellington International Airport Limited

Appellant

and

New Zealand Air Line Pilots' Association Industrial Union of Workers Incorporated

First Respondent

Director of Civil Aviation

Second Respondent

Between

Director of Civil Aviation

Appellant

and

New Zealand Air Line Pilots' Association Industrial Union of Workers Incorporated

First Respondent

Wellington International Airport Limited

Second Respondent

[2017] NZSC 199

Court:

Elias CJ, William Young, Glazebrook, Ellen France and Arnold JJ

SC 26/2017

SC 30/2017

IN THE SUPREME COURT OF NEW ZEALAND

Counsel:

D J Goddard QC, V L Heine and S E Quilliam-Mayne for Appellant in SC 26/2017 and Second Respondent in SC 30/2017

H B Rennie QC and E M Geddis for First Respondent in SC 26/2017 and SC 30/2017

F M R Cooke QC, M S Smith and D R Johnson for Second Respondent in SC 26/2017 and Appellant in SC 30/2017

C J Curran and A A Arthur-Young for New Zealand Airports Association as Intervener

• A The appeals are dismissed.

• B The Director of Civil Aviation and Wellington International Airport Limited are jointly and severally liable to pay costs of $30,000 to the New Zealand Air Line Pilots' Association Industrial Union of Workers Incorporated, plus reasonable disbursements to be determined by the Registrar if necessary. We allow for second counsel.

JUDGMENT OF THE COURT

REASONS

(Given by Arnold J)

Table of Contents

	Para No.
Introduction	[1]
Factual background	[4]
Regulatory framework	[12]
International dimension	[13]
National dimension	[17]
(i) The Civil Aviation Act 1990	[18]
(ii) The Civil Aviation Rules	[30]
Basis of Director's decision	[38]
The dispute	[43]
Evaluation	[48]
Effect of 2004 Amendment Act	[49]
Relationship between Director and airport operator	[58]
Meaning of “practicable”	[63]
Drawing the threads together	[70]
Result	[72]

Introduction

1 Overshooting or undershooting the runway is a major cause of aircraft accidents world-wide. 1 To limit the risk of such accidents, international instruments to which New Zealand is a party require that airports servicing particular categories

of aircraft have runway end safety areas (RESAs) at each end to the runway. These requirements have been implemented in New Zealand through the Civil Aviation Rules (the Rules), made under the Civil Aviation Act 1990 (the Act). In particular, the Rules impose two relevant requirements

• (a) First, a RESA must extend to a distance of at least 90 m and, “if practicable”, to a distance of at least 240 m, from the end of the runway strip (or the greatest distance practicable between 90 and 240 m). 2

• (b) Second, a RESA must be “acceptable” to the Director of Civil Aviation (the Director). 3

2 Wellington International Airport Ltd (WIAL) operates Wellington Airport, to which the RESA requirements apply. Currently WIAL operates with 90 m RESAs at each end of the runway, which the Director has accepted. WIAL wishes to extend the runway and approached the Director to ask whether RESAs of 90 m would be acceptable to him in respect of the extended runway. The Director advised that they would be. The New Zealand Air Line Pilots' Assoc Industrial Union of Workers Inc (NZALPA), which has long advocated for RESAs of at least 240 m, both generally and at Wellington, issued judicial review proceedings challenging the Director's decision. The challenge was unsuccessful in the High Court 4 but succeeded on appeal. 5 Both the Director and WIAL filed separate applications for leave to appeal to this Court. Both were granted leave, the single question being whether the Court of Appeal was correct to allow NZALPA's appeal to that Court. 6

3 The essential issue identified by the Court of Appeal was whether the Director had erred in law when deciding that a RESA of 90 m was acceptable. 7

Important to this issue is the meaning to be given to the qualification “if practicable” in the context of the rule relating to RESAs and the role of a cost/benefit analysis in the Director's decision-making

Factual background

4 The factual background can be stated briefly. 8

5 The existing runway at Wellington Airport includes at each end a 60 m area called a stopway and a 90 m RESA, which together provide 150 m in additional length against the possibility that an aircraft will over-shoot the main runway area on landing or take-off, or under-shoot it on landing. Both the stopway and RESA areas are also used as starter extensions to increase the distance available to aircraft when taking off, so that the various elements appear as a continuous strip. The following diagram is a simplified illustration of the layout:

6 As presently configured, the airport cannot accommodate larger commercial aircraft, unless they operate under weight restrictions. Accordingly, WIAL considered extending the runway. In August 2012 WIAL wrote to the Director seeking clarification on the required length of RESA if it were to extend the runway “around 200 m” to the north, across Cobham Drive and into Evans Bay. WIAL expressed the view that 90 m RESAs would be adequate and highlighted various factors, including the likely cost of extending to the north (around $1 million per linear metre) and the substantial economic benefits that extending the runway

would bring to the Wellington region. The Director responded by asking WIAL to supply further information, principally the basis for its cost estimate of $1 million per linear metre and likely operational levels, and to undertake a cost/benefit analysis

7 In February 2013, NZALPA representatives met with personnel from the Civil Aviation Authority (the Authority) to highlight the importance of 240 m RESAs generally. NZALPA followed the meeting up with a letter in which it said it was pleased that the Authority had confirmed that a 240 m RESA would be the starting point for runway extensions over 15 m and that an engineered material arresting system (EMAS) would be considered as a practicable alternative to a full 240 m RESA. 9 NZALPA also asked about WIAL's proposal to extend the runway at Wellington.

8 In July 2013, WIAL provided the Director with two reports, one of which was a cost/benefit analysis prepared by McGregor & Co (McGregor), consultants with expertise in aviation safety issues. That report addressed the benefits and costs associated with having RESAs longer than 90 m at Wellington, specifically, RESAs of 140 m and 240 m. NZALPA later commissioned its own report from Covec Economic Consultants (Covec), dated September 2013, which took the form of a peer review of the cost/benefit analysis undertaken by McGregor. Covec concluded that the McGregor analysis had a number of shortcomings, in particular underestimating the plausible benefits of longer RESAs. WIAL then commissioned an updated report from McGregor, dated October 2013. The updated McGregor report concluded that RESAs of 140 m or 240 m were not justified at Wellington on a cost/benefit basis. To gain an independent view, the Authority engaged Castalia Strategic Advisors (Castalia) in November 2013, to review the updated McGregor report. Castalia concluded that McGregor's cost/benefit analysis provided “a reasonable basis for concluding that RESA options of longer than 90 [m] at Wellington Airport would impose costs that exceed any safety benefits that would be

achieved”. In addition, the Authority's Aeronautical Services Unit conducted an assessment of the McGregor report in November 2013 and concluded it was sound

9 All the reports were given to the Director. He considered them along with other material and internal legal advice. In February 2014 the Director advised WIAL that he considered it would not be practicable to require WIAL to provide RESAs exceeding 90 m, so that RESAs of 90 m were acceptable to him. The Director indicated that the projected cost of longer RESAs was a significant factor in his decision, which would be affected by a substantial reduction in costs. He indicated that if WIAL decided to proceed with the extension project, it would have to provide robust, updated costings. To that extent, then, the Director was expressing a provisional view.

10 After further geotechnical investigation, WIAL revised its plans and decided to extend the runway to the south, into Lyall Bay. In October 2014 WIAL wrote to the Director confirming that its intention was now to extend the runway to the south and in November 2014 provided him with a further updated report from McGregor addressing extensions to the south of 100, 200 and 300 m. This report concluded that, on a cost/benefit basis, RESAs longer than 90 m were not justified. On this basis, WIAL sought the Director's acceptance of 90 m RESAs for a southern runway extension. On 20 March 2015 the Director prepared what was described as a file note, in which he said that RESAs of 90 m would be acceptable, and WIAL and NZALPA were advised accordingly. 10 This led to the issue of the present proceedings by NZALPA challenging the Director's decision.

11 WIAL has subsequently modified its plans further. Its current proposal is to extend the runway by 355 m to the south, at a cost of approximately $330 million, and it has applied for a resource consent for that proposal. This will presumably require a further decision from the Director.

Regulatory framework

12 The regulatory framework has both an international and a national dimension, as we now briefly describe.

International dimension

13 New Zealand is a party to the Convention on International Civil Aviation made in Chicago in December 1944 (the Chicago Convention), under which the International Civil Aviation Organization (ICAO) was established. 11 Under art 37, the contracting states undertake to collaborate in:

… securing the highest practicable degree of uniformity in regulations,...