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The AAT and the new broom – Ekinci case and Mr. Bartsch – Should Mr. Bartsch stand aside??

The following AAT case between CASA and Reha Ekinci has some interesting “bumps” and reveals some long standing issues between the two parties.

The following cases refer to the AAT judgements.

Ekinci and Ors and Civil Aviation Safety Authority [2014] AATA 424 (27 June 2014)

Ekinci and Ors and Civil Aviation Safety Authority [2014] AATA 114 (3 March 2014)

Ekinci and Civil Aviation Safety Authority [2005] AATA 789 (18 August 2005)

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What is even more interesting is a case in which one of the AAT members [the just appointed Mr Ronald Ian Charles Bartsch] appears.

In the Federal Court, which has the normal standards of evidence applied, has a series of findings, which draw attention to Mr. Bartsch:

Avtex Airservices PL-International Pilot Training Course PL Dieter Siewert and Paul Lange v Ronald Ian Charles Bartsch-David Lee-Anthony Hugh Webster-Peter James Punch- Aviation Dynamics Axis Aviation

 74. I formed an unfavourable view of Mr Bartsch in the witness box. He is, as his degrees in science and law suggest, an intelligent man, but in my view was prepared to give evidence which at the very best was a half truth and was prepared to shift ground in his evidence when the occasion appeared to suit him.

76. It emerged that ….. He was aware that the affidavit was untrue and, in my view, was prepared to lie because he did not believe that he would be caught out. He did say that he believed that he would in any event have changed that evidence, but I find this difficult to accept.

78. This whole episode reflected badly upon the credit both of Mr Bartsch and Mr Lee. But there were other matters that were also damaging to the credit of Mr Bartsch. He was shown a document of projections of profits of the APTC business which was given to a bank manager in connection with a loan to purchase a house in August 1989. That document showed a contemplated profit mark-up on the APTC course of $3,050 per student. Mr Bartsch denied knowledge of the document. Mr Lee deposed that it had been produced to the bank manager and discussed at a meeting at which Mr Bartsch was present. I have no doubt that Mr Bartsch was not telling the truth in respect of this matter and that Mr Lee was.

80. In addition, counsel for the applicants referred to an informal prospectus for AAA Airlines in which Mr Bartsch was featured as being a “qualified lawyer”. In one sense he was, as he did have a law degree, although it may be said that the expression “qualified lawyer” suggests someone who is qualified to practise. In various places Mr Bartsch described himself as a Qantas pilot or second officer. The fact of the matter was that he was employed by Qantas as a trainee pilot but failed to pass an examination on a flight simulator. His employment with Qantas was subsequently terminated although he later passed the flight simulator examination. He was never re-employed. While the correspondence left scope for argument about Mr Bartsch’s status, it was, in my opinion, misleading of him to describe himself as having been employed by Qantas as either a pilot or second officer.

82. Mr Bartsch’s evidence was contradicted by Mr Lee on other matters that had relevance to the case. This was notwithstanding that they had, as they admitted, got together to prepare the evidence in the case and to jog each others recollections. In saying this I do not suggest that they put their heads together to concoct false evidence or that there was anything improper in their discussing the case beforehand to prompt recollection of events that had occurred some time before. Mr Bartsch’s evidence, that he had provided his lecture notes to the lecturers to prepare the workbooks, a highly relevant matter on the copyright issue and disputed by all lecturers, is another pointer to the difficulty of accepting his evidence.

98. The applicants submit that Mr Bartsch, as General Manager of the Airtex Academy business of Avtex, was under a fiduciary duty to Avtex and that accordingly he was liable to account to Avtex for benefits received from the operation of the Airline Pilot Training Course. It was submitted to be immaterial that his services were provided through the medium of a corporate entity such that he was not, in a general law sense, an employee of Avtex; he was nevertheless the General Manager of the business and it was from this position that his fiduciary relationship arose. There being a fiduciary relationship, the law was clear, it was submitted, that Mr Bartsch might not use his position to obtain a benefit by entering into a transaction (the running of the APTC course) to gain a profit or advantage for himself in conflict with his fiduciary duty.

106. If what was said in these cases were to be taken literally, the fact that there was a partnership agreement to carry on a commercial enterprise entered into between partners at arm’s length would preclude a fiduciary relationship arising between one partner and the other in the course of dealings in that enterprise. But that clearly is not the law. It was Mr Bartsch’s responsibility, while he was General Manager of the school, to run it. For this continuing service, payment was to be made to a company controlled by him, no doubt with an eye to perceived taxation advantages. Mr Bartsch put himself in a position where his interest and duty conflicted in organising, apparently for his employer, a venture for an integrated system of flying training. He chose not to reveal, initially, that through the medium of a company in which he, Mr Lee and their wives participated, he had priced the course so that there was a substantial profit to accrue to that company. Not only did he not reveal this, but he told Messrs
Siewert and Lange that there was no mark up on the flying component. In other words, he fraudulently concealed the profit, choosing to open a bank account at a bank unconnected with Avtex and failed to comply with the request that an account be opened with Avtex’s bank and the flying moneys banked in that account. In addition, Mr Bartsch and the fifth respondent took advantage of Mr Bartsch’s position with Avtex to suggest a relationship between the APTC business and Avtex.

108. The liability of Mr Lee and the fifth respondent arises because each participated with knowledge in the dishonest and fraudulent design put into effect by Mr Bartsch ……………………………..

and on.

 

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