Court of Appeal allows fraud case against Civil Aviation Authority to go ahead
Grounded ex-military helicopters are the subject of a multi-million dollar claim against a government department accused of fraud.
Mark Wayne Ford of the now-liquidated Heli-Logging Ltd, said if his suit was successful he would be seeking $90 million compensation from the Civil Aviation Authority of New Zealand.
He alleges the CAA wrongfully refused to give him the go ahead to use his helicopters for logging.
The amount sought would cover the loss of earnings, the cost of 10 helicopters and spare parts and legal bills, he said.
In May the Court of Appeal released a decision which will allow the 12-year battle to be heard in court again after it was struck out in the High Court in 2015.
The CAA said it had received the decision and was considering its position but had no further comment.
Its decision reveals Ford alleges the director of the CAA acted fraudulently and in bad faith when deciding against granting exemptions for the use of former military aircraft, Wessex Mk2 helicopters, in its Taranaki heli-logging operations in 2005.
He claims the CAA led Heli-logging to believe the exemptions would be granted, but when he applied for them the CAA had changed its mind and refused to give him the exemptions.
He claims the CAA fraudulently withheld disclosure of a report prepared by experienced and respected helicopter pilot Bernie Lewis in 1999 that stated the choppers were well proven and had operated successfully around the world.
Further to that he alleges the CAA acted fraudulently and without honest belief when declining the exemptions on safety grounds because it was aware of Lewis' report saying they were safe.
In 2005 Lewis, on behalf of the CAA, wrote another report about the helicopters which said they were not safe.
Ford claims Lewis said the information in that report was based on when he last flew the helicopters around 40 years earlier, but Lewis had flown a Wessex in 1999 when he wrote the earlier report.
There is also dispute between the parties about handwritten changes made to the original copy of the letter
The CAA maintains Heli-Logging's claims are merely challenges to the director's opinion dressed up as allegations of fraud and have no credible basis.
It said each of the claims were statute barred and all material facts were either known by the company in 2005 or 2006, were reasonably discoverable, or did not support any allegation of fraudulent concealment.
In its May decision the Court of Appeal noted the case presented was now quite different than that heard by the High Court and reinstated the proceeding.
"We record that we have have not decided that there is merit in the claims as articulated in this court, which involve an allegation that the director acted in bad faith in reaching his 2005 decision.
"It is important to record that the director has not had an adequate opportunity to respond to an assertion which, if true, has serious implications for a senior public official."
It would be up to the high court to make the orders necessary to get the proceeding back on track, including orders requiring re-pleading of the claim and re-addressing the issue of costs in that court if costs were sought, the ruling said.
Ford said he hoped the trial, which he estimated could last three weeks, would be held in the next 12 to 18 months.