Elgammal v Director General, Department of Transport

[1999] NSWADT 82

CITATION:	Elgammal V Director General, Department of Transport [1999] NSWADT 82
DIVISION:	General
APPLICANT:	Mohamed Elgammal
RESPONDENT:	Director General, Department of Transport
FILE NUMBER:	993058
HEARING DATES:	07/05/1999; 07/06/1999
SUBMISSIONS CLOSED:	07/06/1999
DATE OF DECISION:	6 July 1999
BEFORE:	K P O'Connor DCJ - President
PRIMARY LEGISLATION:	Passenger Transport Act 1990
APPLICATION:	Review of decision to cancel taxi operator's accreditation -
MATTER FOR DECISION:	Stay application
REPRESENTATION:	Applicant: F Stevens of counsel Respondent: P Culbert, solicitor, Department of Transport
ORDERS:	1. Operation of respondent’s decision to be stayed for 35 days subject to two conditions : (a) Applicant to respond to the respondent’s notice to show cause within 7 days; respondent to have 21 days to consider its position. (b) Applicant not to use the service station, Cab Gas Mechanical Repairs, as an Authorised Taxi Inspection Station until further order. 2. Liberty to apply (for any further directions or extension of the stay order).

DELIVERED EX TEMPORE

1 I have before me an application for an order staying the operation of a decision which is the subject of an application for review pending the hearing of that application. The administrator, the Director General, notified the applicant of its decision by letter dated 15 June 1999. The letter advised that the Director General had decided to cancel the applicant’s Taxi Operator’s Accreditation permitting him to operate public passenger vehicles, effective from 3.00pm on Friday 2 July 1999.

2 The application for a stay is made pursuant to s 60 of the Administrative Decisions Tribunal Act 1997. That section requires the Tribunal to have regard to various criteria when considering whether or not to make such an order. The application is opposed by the respondent.

3 The decision under review is one cancelling an accreditation to operate several taxi cabs. The decision was made by the Director General, Department of Transport, pursuant to s 37 of the Passenger Transport Act 1990.

4 The application for a stay, to some extent unavoidably, involves one in looking at the merits of the decision under review. But I should indicate in that regard that I do not consider that the material placed before me today is as detailed as the material that is likely to be put before me at a final hearing.

5 Nonetheless, it is clear that the Director General proceeded to cancel the accreditation in circumstances where numerous defects were found at inspections in March 1999 to exist in several taxis in the fleet operated by the applicant, Mr Elgammal. There is evidence today from one of the senior officers with the Department of Transport, who is an expert in these matters, as to the risks to public safety that were connected with some of the defects found.

6 The situation before me is made difficult in terms of the exercise of the stay discretion by a number of factors. One is the lack of clarity as to the extent to which the applicant sought to respond to the notice to show cause that was issued on 7 May 1999 by the Director General. The file of the Department indicates that an extension of the period of the notice was granted on 21 May, but then nothing further is recorded on the Department file.

7 There is a suggestion, but it was not the subject of any actual evidence, that there may have been a letter sent on behalf of Mr Elgammal after that date seeking a further extension. So that is an unsatisfactory aspect of the case.

8 What we have before us, as we seem to have in a number of cases recently, is a twelfth-hour situation where a procedure adopted by the Department that is designed to give people the opportunity to respond without having their licences taken off them is not utilised. The cancellation proceeds. Then the Tribunal becomes the forum in which virtually a notice to show cause procedure takes place.

9 That situation is not a satisfactory one and it may be that that will lead administrators to serve notices and not to allow any requests for extension. That is the type of end-game one gets into if we find ourselves being put to enormous expense and inconvenience in holding proceedings which should have occurred initially within the framework of a notice to show cause. Instead they take place in this Tribunal because there has been a lack of co-operation with the notice to show cause.

10 On the other hand, whether or not Mr Elgammal failed to cooperate with the notice is a matter that was left unresolved in these proceedings, and I am not in a position to make any conclusions today as to Mr Elgammal's attitude to the notice to show cause. But I should indicate that if it is established that applicants have not utilised properly notice to show cause procedures, I do not think they can accept much sympathy from the Tribunal in seeking a stay after a cancellation is given effect.

11 The problems identified, of safety in relation to the vehicles, are serious ones. I acknowledge the force of Mr Culbert's submission that the defects found in the inspections in March appear not to be consistent with overnight or immediate problems. They do appear to be defects connected with wear and tear or possibly connected with a lack of understanding of the significance of sealing and similar practices in relation to LPG gas tanks.

12 One of the matters that was unclear to me as the evidence proceeded, but appeared to have been clarified towards the end of the evidence, were the circumstances under which the non-registration of the vehicles occurred. As best I can understand from the evidence, the non-registration of the vehicles appears to be connected with the non-payment of driver fines. It was unclear to me today - although this matter may become clearer at the hearing - as to what information is given to the operator in relation to the existence of driver fines and whether they are outstanding.

13 So for the purposes of today I am not regarding that factor as negative to Mr Elgammal, but there may be more evidence on that. If it is the case that Mr Elgammal was familiar with the fact that driver fines were outstanding and that that situation might affect registration, and were it the case that he was not active in his response to the notice to show cause, these factors would appear to amount to a pattern of behaviour that in its own right is of concern.

14 This area of regulation (maintenance of taxi cabs) is managed to a significant degree by the industry and by the operators and the drivers and the mechanics and so on that belong to the industry. It is simply not practical to expect the authorities to chase down every burrow and find every problem. There has to be a high level of cooperation with the regulatory regime and a significant commitment to compliance. That includes responding properly to administrative notices and the like.

15 In favour of Mr Elgammal it can be said, I think, that he does appear to have a degree of serious intent about the need to operate his business in accordance with the law and with the administrator's requirements, ones that may possibly be stronger than has been the case in the past. He does appear to have implemented since May 1999 a program of inspection and maintenance that he is pursuing more vigorously than previously.

16 On the other hand, his behaviour has caused the regulatory apparatus to have to spend more time on him. As I understand it, he is now required to submit his vehicles for inspection six times a year rather than four times a year.

17 There is now a combination of factors in place that represent an increased level of discipline in the management of the maintenance program for his taxi-cabs.

18 The other factor that Mr Elgammal has given evidence about which the administrator is not in an easy position to contest, goes to the replacement of his previous principal mechanic by a new mechanic. One must at least wonder how the situation that we have had presented here today came to develop without some appreciation that maybe the previous mechanic was not up to scratch. Nevertheless, there does now seem to be some attempt to improve the environment in terms of the quality of the mechanic.

19 One issue that Mr Culbert raised, which is reasonable to raise but does not appear to be easily resolvable, is the question of the relationship between the technical specialist - the mechanic - and the business operator. It will often be the case, it seems to me, that the business operator will be in the business for broader entrepreneurial reasons, and will to some significant extent, rely on the technical expertise of the mechanic they engage.

20 It certainly occurred to me in the course of evidence that may be one course that is worthy of exploration in cases like these is whether the operator should be obliged to have some kind of audit done of the mechanic if they do not have the technical skills to audit the quality of performance of the mechanic.

21 I acknowledge, on the other hand, what Mr Culbert says about the ability of any person reasonably experienced in dealing with cars, in being able to observe cosmetic or visible defects. I think the popular view would be that if people are not attentive to cosmetic and visible defects, it is likely they are not attentive to less visible defects as well. So there is some pattern of concern there.

22 The main factor that seems to be operating in Mr Elgammal’s favour in terms of granting a stay application, is the fact that all the cars that are on the road at the moment appear to be operating safely. There is the additional factor that he appears to have a new compliance regime in place, plus he has been subject to an external regulatory regime which is more strict. So those factors tend to be supportive of Mr Elgammal. The public interest in ensuring that he is putting on the road safe vehicles does not seem to be at risk at the moment.

23 There are other public interest factors I should refer to. I have referred in a case recently, and I refer again to it today, to the importance of not being seen to lower confidence in the authority of the administration by lightly granting orders of this kind: Farquharson v Director General, Department of Transport [1999] NSWADT 36 at [32]. I accept that the Department of Transport has, on the face of it, pursued this case appropriately. The exercise of any jurisdiction by this Tribunal should not be interpreted as in any way seeking to affect the confidence that the public should have in the operation of the regulatory system.

24 As to the interests of Mr Elgammal, which is one of the factors that is entitled to be taken into account under section 60, I think it is reasonably clear from the evidence that he is operating a not insignificant business. On my quick calculations he seems to expect a turnover, an income, of around $2,500 per car per week, and he seems to be acknowledging that he should commit about $150 per car to maintenance. So the ratio between maintenance and income is not particularly high.

25 On the other hand, if you listen to some of the other rough estimates he gave, he appears to be operating on a very thin margin compared to turnover. It may well be that that is the nature of the taxi industry. It may be that Mr Elgammal should think about the level of his business operation, his ability in fact to operate at that level and to supply an adequate maintenance program. One's initial inclination when listening to the evidence is to have concerns about the capacity in the medium term of Mr Elgammal to deliver an effective service.

26 What we are dealing with today is a cancellation decision. Cancellation decisions are definitive decisions. Mr Elgammal is out of business for the time being. The choices are:

• to stay the cancellation and allow Mr Elgammal’s business to continue to operate with there being a detailed examination at hearing of the reasons that gave rise to the decision to cancel

• to leave that cancellation on foot for the time being and then proceed to have the hearing, or

• Mr Elgammal could withdraw and try to re-enter the system through a fresh application.

27 The situation presents various alternatives. The conclusion I have come to, listening to the evidence - but as you can probably tell with some hesitation - is that I should allow the decision to be stayed in all the circumstances as they have been presented to me today. I should indicate that the primary circumstance that operates in favour of Mr Elgammal is the fact that he does seem to have his fleet in good working order at the moment. The second factor is that there does appear to be a commitment on his part greater than may have been the case in the past to the conduct of a serious maintenance program.

28 I have given consideration to whether certain conditions should be imposed. The applicant’s business premises at Rocky Point Road, Kogarah include a service station which he controls, Cab Gas Mechanical Repairs. He has used that service station in the past for the purposes of undertaking the regular inspections required by the Act, because it has the status of an Authorised Taxi Inspection Station. Mr Culbert submitted that if the Tribunal permitted the Department’s decision to be stayed, the applicant should not be permitted to use the station for that purpose. I consider that to be appropriate in light of the evidence. This does not prevent the applicant using the mechanics for ordinary day to day maintenance.

29 I propose to fix a stay period of a number of days within which Mr Elgammal could give a proper response to the notice to show cause. Then, if the decision of the Department at the end of that process is simply to affirm its provisional view, further directions could be made for the hearing of the matter.

30 What I propose is to put a stay order in place for 35 days with the decision of the administrator that has given rise to the application for review being stayed pursuant to section 60 of the Act for 35 days. I direct that there be two conditions. The first is that Mr Elgammal takes steps immediately to respond to the notice to show cause, and do so within 7 days of today's date. I will allow the further period of the notice to show cause to be 21 days. So Mr Elgammal is to respond to the notice to show cause within 7 days and then there is to be a further period of 21 days during which the Department can consider its position.

31 Secondly, that Mr Elgammal is not to use Cab Gas for the purposes of being the Authorised Taxi Inspection Station until further order. So that order just runs until the complete disposal of this matter. Then I give the parties liberty to apply to the Tribunal for any further directions or extension of the stay order.