(V)

CONFIDENTAL

THERE REMAINS THE PROBLEM OF THE DIFFICULTIES ARISING FROM THE GUIDANCES. A DIRECTION NEGATING THE EFFECT OF THOSE, IN VIEW OF THE LAKER DECISION AND, IN PARTICULAR, IN VIEW OF THE SPECIAL CIRCUMSTANCES OF THE PRESENT MATTER INCLUDING THOSE OUTLINED ABOVE, WOULD NOT BE UNREASONABLE.

A DIRECTION COMBINING THE TWO OPTIONS WOULD MEET THE DIFFICULTIES SET CUT IN PARAGRAPHS 2(1) AND 2(11) ABOVE. IT WOULD NOT HOWEVER MEET THE DIFFICULTY OF THE DUPLICATION OF HEARINGS NOR THE LIKE- LIHOOD OF CONSIDERABLE DELAY ARISING FROM THE DISAPPOINTED APPLICANTS

TAKING THE MATTER BEFORE THE COURTS.

(2) WE MAKE THE PROPOSAL IN OPTION (C) THAT A HEARING BE HELD IN HONG KONG INSTEAD OF THE U.K BECAUSE OF THE POWER OF DIRECTION WHICH IS VESTED IN THE SECRETARY OF STATE BUT WHICH HAS NO COUNTERPART IN THE HONG KONG LEGISLATION. IN THE ABSENCE

OF SUCH A POWER, OF COURSE, ATLA CANNOT BE DIRECTED SO THAT A PARTICULAR DECISION IS REACHED, AND IT WILL OF COURSE EXERCISE ITS INDEPENDENT JUDGEMENT IN ACCORDANCE WITH THE LAW ON THE FACTS

BEFORE IT. DUPLICATION OF HEARINGS COULD NOT BE PREVENTED THEREFORE BY ANY ACTION FROM THE HONG KONG END. WE SUGGEST THAT THIS OPTION MAY BE ACCEPTABLE IF ATLA (WHOSE CHAIRMAN 19 JUDGE PEMLINGTON, A DISTRICT COURT JUDGE, WHO IS ALSO THE COMMANDING OFFICER OF THE HONG KONG AUXILIARY AIR FORCE AND PERSONALLY REGULARLY FLIES ISLANDER AIRCRAFT ON VIETNAMESE REFUGEE PATROL) WERE TO BE AUGMENTED BY THE APPOINTMENT BY THE GOVERNOR, ON THE NOMINATION OF THE SECRETARY OF STATE, OF ONE OR MORE MEMBERS OF THE CAA AS MEMBERS OF ATLA FOR THE PURPOSE OF HEARING THIS APPLICATION. THIS WOULD CREATE, IN EFFECT, TO HEAR THE CASE, A JOINT CAA/ATLA BODY WHICH WOULD NOT BE BOUND BY THE PREJUDICIAL

WORDS OF SECTION 3 OF THE 1971 ACT OR BY THE GUIDANCES, WHICH NO DOUBT WERE DRAFTED WITHOUT SPECIFIC ATTENTION HAVING BEEN GIVEN TO THE POSSIBILITY THAT IN THE COURSE OF TIME CPA WOULD EMERCE AS AN AIRLINE WITH A STATUS AT LEAST THAT OF MAJOR BRITISH INDEPENDENT AIRLINES SUCH AS BCAL AND LAKER.

(3) OPTION (D) ABOVE WE PUT TO YOU AGAIN ONLY ON THE BASIS THAT ATTENTION MAY NOT PREVIOUSLY HAVE BEEN SUFFICIENTLY PAID TO THE VERY REAL LEGISLATIVE PREJUDICE CONFRONTING CPA. THE EXERCISE BY THE SECRETARY OF STATE OF THAT OPTION WOULD CLEARLY MEET ALL THE DIFFICULTIES, WE RECOGNISE, HOWEVER, THAT THIS COURSE MAY NOT BE POLITICALLY ACCEPTABLE IN THE U.K.

PONCIDEN

LAL

14. YOU WILL

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