Paap and Ors and the Director General - Department Of Planning and Infrastructure and Anor - [2005] WASAT 237

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: TAXI ACT 1994 (WA)

CITATION: PAAP & ORS and THE DIRECTOR GENERAL - DEPARTMENT OF PLANNING AND INFRASTRUCTURE & ANOR [2005] WASAT 237

MEMBER: JUDGE J CHANEY (DEPUTY PRESIDENT)

HEARD: 22 JUNE 2005 AND 23 JUNE 2005

DELIVERED : 2 SEPTEMBER 2005

FILE NO/S: CC 178 of 2005
CC 179 of 2005
CC 180 of 2005
CC 195 of 2005

BETWEEN: THEODORUS MARINUS PAAP
JOSEPH FRANK MARTINO
NONDO PTY LTD AS TRUSTEE FOR THE JOHNSON AND JAEGER TRUST
MOHAMED ABDRABOU
Applicants
AND
THE DIRECTOR GENERAL - DEPARTMENT OF PLANNING AND INFRASTRUCTURE
First Respondent
THE GENERAL MANAGER - DEPARTMENT OF PLANNING AND INFRASTRUCTURE
Second Respondent

Catchwords:

Transport Taxi plate licences Condition as to maximum lease rates for taxi plates Whether adequate foundation and rationale for condition Condition requiring provision of information as to actual lease rates Whether appropriate

Legislation:

State Administrative Tribunal Act 2004 (WA), s 32(2)

Taxi Act 1994 (WA), s 20

Taxi Regulations 1995 (WA), reg 5A

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicants:     Mr PT Arns
First Respondent           :     Ms JC Pritchard and Mrs ST Gorman
Second Respondent       :     Ms JC Pritchard and Mrs ST Gorman

Solicitors:

Applicants:     Arns and Associates
First Respondent           :     State Solicitor's Office
Second Respondent       :     State Solicitor's Office

Case(s) referred to in decision(s):

Nil

Case(s) also cited:

Nil

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal’s Decision

The issue of taxi plates is governed by the Taxi Act 1994 (WA) (the Act), and under that Act the Director General of the Department of Planning and Infrastructure may impose conditions on the operation of a taxi.
On 10 January 2005, the Director General imposed conditions on taxi plates generally, including those owned by the applicants in these matters. The conditions imposed a maximum amount that could be charged for leasing the taxi plate to a driver, and also imposed a requirement on taxi plate owners to provide to the Director General details of the terms and conditions of any lease or sub‑lease of a taxi place licence in existence from time to time.
Each of the applicants applied for a review of the respondent’s decision of 10 January 2005. They argued that the reduced weekly lease rate unfairly prejudiced plate owners, that there had been no proper assessment of the consequences of the new conditions for plate owners, that information upon which the new rates were struck was based upon flawed survey evidence, and that there had been no meaningful consultation with plate owners prior to the notification of the new conditions. They also argued that the new rates do not meet the objectives relied upon by the Director General as a basis for the variations, and that the new conditions lacked any proper rationale.
The Tribunal reviewed the process which led to the imposition of the conditions, the material relied upon by the Director General, the information provided by the applicants as to the personal circumstances, and considered the rationale for the imposition of the new conditions. Having considered all those matters, the Tribunal determined that it should not set aside the conditions imposed by the Director General which were based on a cogent rationale, did not unduly prejudice any of the applicants in these proceedings, and represented a reasonable measure to achieve government objectives in relation to the regulation of the taxi industry.

Introduction

The taxi industry in Western Australia is regulated by the Act. Within what are prescribed as "control areas" within Western Australia, a vehicle may not be operated as a taxi unless it is operated using taxi plates, and is otherwise operated in accordance with the Act. The Director General is authorised to issue taxi plates following a tender process. Taxi plates do not attach to any particular vehicle. The consequence of that is that the owner of a taxi plate has a number of options in respect to its utilisation.
The different ways in which a taxi plate owner may use its plate were conveniently set out by Mr Robert Douglas Leicester, the General Manager of the Directorate of the Department of Planning and Infrastructure responsible for the regulation of and standards set for the taxi industry. He deposed that:
"(a)Plate owners may, using their own vehicle, drive the taxi themselves. In this situation they may also find another driver to drive the taxi on either the day or night shift (known as 'double‑shifting') and lease the plate and vehicle to the shift lease driver. This is known as a shift lease arrangement.
(b)The plate owner may lease the plate to a driver (known as 'plate leasing'). The driver is responsible for putting a plate onto the vehicle and driving the vehicle.
(c)The plate owner may lease the plate to a taxi management company. The management company will be responsible for putting a vehicle onto the plate and finding drivers for the taxi."
If a plate owner used option (a), the plate owner is responsible for the provision of the vehicle and its running costs, other than fuel costs when a shift lease driver is utilising the vehicle.
Where alternative (b) or (c) is utilised, all of the costs associated with the vehicle are borne by the plate owner.
The applicants are the holders of what are known as "conventional taxi plates" which permit operation 24 hours a day, seven days a week.
Since 1989 there have been 924 conventional taxi plates on issue. In 2004, an additional 42 conventional taxi plates were offered by the government directly for lease by drivers. This step was taken following an amendment to the Act in December 2004 designed to implement one of the recommendations of the Report on the Review of the Taxi Industry Regulatory Structure in the Perth Metropolitan Area. That report was written by the Hon Graham Giffard ("The Giffard Report") published in June 2003. Mr Leicester identified the rationale for the amendment as being to provide taxi drivers with an opportunity to operate a taxi without having to incur the high costs associated with purchasing plates or leasing plates from taxi plate owners, thus providing better returns to drivers. The lease rate for a full time conventional taxi plate leased from the government is $250 per week.
Apart from the 42 plates leased from the government, conventional taxi plates can be bought and sold subject to the approval of the Department and payment of a 2.5% transfer fee. The records of the Department indicate that the average transfer prices for conventional taxi plates fluctuated a few thousand dollars either side of $135 000 in 1992 rising to in excess of $200 000 by 1997. Prices appear to have peaked in the latter half of 1997 at around $230 000. The price decreased during 1998, and dropped to around $160 000 by late 2000 and early 2001 before recovering in 2002 and rising to an average price of slightly in excess of $200 000 in 2004.

Conditions on taxi plates

The nature of the conditions that may be imposed upon the use of taxi plates are set out in s 20 of the Act. In addition, conditions may be imposed in relation to "such other matters as may be prescribed by regulation." In 1997, reg 5A of the Taxi Regulations 1995 was inserted. The regulation prescribed "the leasing of taxi plates" as a matter in respect of which the Director General might impose conditions pursuant to s 20(1).
Regulation 5A was amended on 10 December 2004 so that it now reads:
"5A Director General may impose conditions in relation to leasing taxis and taxi plates
For the purposes of s 20(1), the following are matters in relation to which the Director General may impose conditions on the operation of a taxi using specified taxi plates ‑
(a)the leasing of the taxi (with its taxi plates), including –
(i)the provision to the Director General of information about the terms and conditions of the lease and any variation of those terms and conditions; and
(ii)the maximum amounts that may be charged in relation to the lease;
(b)the leasing of the taxi plates from the plate holder who is the owner of the plates, including ‑
(i)the provision to the Director General of information about the terms and conditions of the lease and any variation of those terms and conditions; and
(ii)the maximum amounts that may be charged in relation to the lease."
Upon the introduction of the original reg 5A in 1997, a condition was inserted into the conditions imposed on the operation of taxi plates so as to regulate the maximum amounts that may be charged for a plate lease and for shift leases. Those rates have been the subject of regular review, usually in conjunction with the review of fares for Perth taxis. Since 1999, the adjustment of lease rates has been determined using a model based on movements in the Private Motoring Index (PMI) produced by the Australian Bureau of Statistics. The PMI is a component of the Consumer Price Index which is based on variations over time in transport costs in Australia. In respect of the last two increases approved by the Minister for Planning and Infrastructure in December 2003 and December 2004, taxi fares have increased but the plate lease rates and the shift lease rates have not been increased. Prior to a review of the conditions in mid 2004, the conditions in relation to plate leases specified a maximum plate lease rate of $453 per week inclusive of GST. The conditions prescribed a maximum shift lease rate for a 12 hour shift of $67.50 other than Friday and Saturday nights when the maximum was $94 per shift.

Government policy

Mr Leicester produced in evidence a copy of the Government’s policy in relation to the taxi industry. Relevantly, the stated policy of the Government is to "work to restructure the industry to provide fair returns to drivers and owner/drivers while offering the public an efficient, economical and safe service." The policy is predicated on the proposition "that costs have escalated, particularly with respect to taxi plate and licence fees, while demand had diminished due to partial deregulation. As a result, the returns to drivers are often below acceptable standards, rendering taxi driving often a job of last resort, resulting in a negative effect on the quality of service."

The review of plate lease rates in June 2004

As a result of The Giffard Report, and in particular the information contained in that report as to the rate generally charged for plate leases, and having regard to the PMI and government policy, Mr Leicester decided to vary the conditions to reduce the maximum weekly plate lease rate to $355 per week (GST inclusive). The materials provided to the Tribunal make it clear that that was a decision taken in consultation with the Minister.
By letter dated 9 June 2004, Mr Leicester notified plate owners of the decision to vary the conditions in respect to conventional taxi plates. The effect for that advice was to reduce the maximum plate lease rate by $98 per week. Shift lease rates were unchanged.
On 11 June 2004, the Minister wrote to all members of the Perth taxi industry to inform them of a number of matters, including the reduction of the maximum plate lease rate. The letter stated that the reduction was "consistent with the government’s announced policy position" and said that the previous maximum plate lease rate of $453 per week was unnecessarily high and did not reflect the realities of the industry.

The amendment to the condition in August 2004

On 20 July 2004, the Minister and Mr Leicester attended a meeting with a number of executive members of the Taxi Council of Western Australia. Mr Kevin Foley, the Chairman of the Taxi Council, attended that meeting. The Taxi Council is a taxi industry body, membership of which is open to all taxi drivers, taxi owners, taxi companies, management companies and associations.
According to Mr Leicester, during the course of that meeting, it became apparent that a number of taxi plate owners were not registered for GST and were receiving more income from plate leasing than those who were registered for GST. Mr Foley’s recollection of this particular meeting was, when he gave his evidence, quite vague. He did not recall whether he had advocated to the Minister that the plate lease rate of $355 inclusive of GST was too low. Mr Leicester’s recollection that the GST issue was discussed is consistent with the terms of a letter dated 20 July 2004 sent by the Minister to Mr Foley. That letter records that "The Taxi Council representatives raised the issue of GST not being payable on many plate lease agreements." I accept Mr Leicester’s account of what occurred at the meeting. The Minister’s letter advises that, as a result of the meeting, she had decided to amend the rate "on an interim basis", to $355 excluding GST. The effect of that amendment was too increase the gross amount of the maximum lease rate to $390.50 compared to the previous maximum gross rate of $453. By letter dated 2 August 2004, Mr Leicester notified plate owners that a new condition would apply to their plates (the plate lease condition) fixing a maximum weekly plate lease rate of $355 exclusive of GST.

The imposition of the information condition

As observed earlier, the new maximum plate lease rate had been struck having regard to information obtained in the course of the preparation of The Giffard Report as to the rates actually being charged for plate leases in the market place. The applicants do not now accept the accuracy of that information, but that is an issue that I will deal with below. According to Mr Leicester, as a result of the meeting with industry representatives on 20 July 2004 the Minister asked the Department to ensure that accurate information was collected by it in respect of the amounts that are being charged for taxi plate leases. Mr Foley was advised of that proposal in the Minister’s letter to him of 20 July 2004.
As a result of that request, reg 5A was amended to its present form on 10 December 2004. The objective of that amendment was clearly to facilitate the gathering of accurate information as to lease rates within the industry to assist in the setting of maximum rates from time to time.
Upon the amendment to the regulations, Mr Leicester again wrote to plate holders advising that it was proposed to insert a new condition 11 into the conditions attached to taxi plates. Those conditions included the plate lease condition which had been imposed by letter dated 2 August 2004, and added a new condition (the information condition). As contemplated by the new reg 5A, the information condition provided:
"11.5The plate owner shall provide to the Director General within 14 days of entering into any lease or sub‑lease of the taxi (with its plates) or of the taxi plates, using the form approved by the Director General from time to time, details of:
(a)the terms and conditions of any lease or sub‑lease entered into by the plate owner with any operator or driver; and
(b)any amendment to any existing lease or sub‑lease.
11.6Plate owners with existing leases are required to provide the details set out in condition 11.5 within 14 days of the date upon which the condition comes into effect."

The application for review

Upon receipt of the letter of 10 January 2005, each of the applicants sought a review of the plate lease condition and of the information condition. There is no challenge to the maximum shift lease rates which were not reduced by the determinations throughout 2004 and in January 2005.
In their closing submissions, the applicants suggested that the maximum plate lease rate should be set at $400 per week exclusive of GST. As for the information condition, the applicants sought that the Tribunal send the matter back to the decision maker for reconsideration with a recommendation that the lease rate be reviewed on an annual basis commencing 1 September 2005, and that that review take place by reference to movements in the PMI for the previous year ending 30 June. In the course of his submissions, however, Mr Arns accepted that utilisation of the PMI for the purpose of reviewing the plate lease rate would not be appropriate. That is because the PMI is an index of the expenses of running a motor vehicle. Where a plate owner leases his plate those expenses fall to be met by the lessee. The return to the lessor is not affected by movements in the PMI.

Unfair prejudice to plate owners

The applicants contend that the plate lease condition unfairly prejudices plate owners. They assert that the rate struck is "simply too low." The applicants’ assertion calls for an analysis of the individual position of each of the applicants. Each of them gave evidence and was cross‑examined.
The first was Mr Steven George Weeks, the company secretary of Nondo Pty Ltd, the applicant in matter no CC 180 of 2005. Mr Weeks owned three plates which he sold to Nondo in 1994 when a restriction that only individuals were allowed to own taxi plates was removed. Nondo leases out the three plates. It leases out one of those, plate No 320, with an associated taxi vehicle, for a total of $720 per week. In respect of that vehicle, Nondo meets the cost of insurance, registration, taxi rank fees, repairs and maintenance on the vehicle. Mr Weeks said that he had not attempted to apportion the amount of $720, but it is clearly an arrangement based upon a shift lease concept and is thus unaffected by the limits on the plate lease rates. His other two plates are leased to a taxi management company pursuant to an agreement entered in March 2004 and expiring in March 2006. He receives an amount of $20 000 per year inclusive of GST for each plate. That equates to $384.61 per week for each plate inclusive of GST, a figure approximately $6 per week less than the maximum under the plate lease condition.
Mr Weeks expressed concern as to the effect of the plate lease condition on the value of his investment upon which he relies to supplement his income from an unrelated business and to assist in funding his retirement. As with a number of witnesses who expressed concerns as to the affect of the condition on the value of their asset, counsel for the respondent objected to that evidence on the basis that those making the assertion lacked the requisite expertise to give opinions as to matters of valuation. The Tribunal is not bound by the rules of evidence (see State Administrative Tribunal Act2004 (WA) s 32(2)), and it is appropriate to permit those affected by an administrative decision to express the nature of their concerns as to the decision and its affects on them. Undoubtedly, as a matter of common sense, limiting the income that an asset is capable of realising when used in a particular manner is capable of affecting value, even if it is not the dominant influence in respect of the value of an asset of a particular kind. There are obviously factors at play in relation to the value of taxi plates other than merely the income that can be derived by a taxi plate lease. There are other ways of utilising the plates to derive an income, the state of the industry and demand for its services will have an affect, the scarcity value of plates and doubtless other factors all come into play. It is not necessary for the purpose of this matter to investigate the relevant impacts of such factors on value, and the evidence of Mr Weeks, and the other applicants, as that issue goes no further than to express the nature of their concerns with the decision subject of review.
Joseph Frank Martino, the applicant in matter no CC 179 of 2005, also gave evidence. He is also the owner of three taxi plates, being numbers 35, 870 and 206. He purchased plate No 35 in 1988, plate No 870 in 1998, and plate No 206 in July 2001. Mr Martino has changed his arrangements as to the use of his plates in recent months. In March 2005 he swore an affidavit for use in these proceedings in which he said that, at that time, he was driving a taxi utilising plate No 35. He was then leasing out the other two plates for $355 per week plus GST, the maximum allowable under the condition under review. He said that prior to the changed condition in July 2004 he received an amount of $1620 per month in respect of plate 206. Assuming that he is referring to a calendar month, that amounts to $373.84 per week. Mr Martino said that figure was exclusive of GST. With respect to plate No 870, before the change to the conditions, Mr Martino received $1700 per month or $392.30 per week.

When he gave evidence at the hearing, Mr Martino indicated that he had altered his arrangements. He no longer drives plate No 35, but leases it on a shift lease for 12 shifts per week. Plate No 870 is leased to a taxi company, and Mr Martino leases it back from that company on a shift rate basis for seven shifts per week. He continues to lease plate No 206 for $355 per week plus GST.
It would appear that Mr Martino was rendered marginally worse off by reason of the imposition of the plate lease condition. He has responded to that situation by re‑organising the way in which he utilises his plates. In the light of those changes the ultimate financial impact of the plate lease condition on Mr Martino’s position is difficult to assess.
The third applicant to give evidence was Mohamed Abdrabou, the applicant in matter no CC 195 of 2005. He owns a single taxi plate numbered 522. He purchased that taxi plate in approximately 1993. He works as a taxi driver utilising his plate from Monday to Saturday nights, and leases the taxi out during the days from Monday to Saturday utilising the maximum week day shift lease rate of $67.50 per shift. That has been the arrangement for the past six or seven years.
Obviously, the limit on plate lease rates does not affect Mr Abdrabou’s income because he is not presently a party to a plate lease. His concern is, however, that the capital value of his plates will not increase because of the limit on the plate lease rate and the potential effect on the income he will be able to earn from his plates in his retirement.
The applicant in matter number CC 178 of 2005 is Theodorus Marinus Paap who also gave evidence. Mr Paap owns a taxi plate No 256. He leases his vehicle at shift rates to a third party on Thursday to Monday nights. He drives the taxi himself during the daytime from Monday to Friday.
Mr Paap’s wife previously owned a plate, but by the time of the hearing she had sold it. His evidence was that prior to selling it, she leased it for $350 per week plus GST.
Mr Paap’s evidence disclosed that the limit on the plate lease rate has no immediate effect on his income because, like Mr Abdrabou, he is not a party to a plate lease arrangement. Mr Paap expressed concern as to the level of expenses associated with taxi ownership but in respect of his personal position the plate lease rates have no impact. He gave evidence as to the level of borrowings and the interest rates associated with those borrowings in relation to his wife’s purchase of the plate which she formerly owned. Clearly a limitation on the amount that might be derived from a plate lease will have an impact on the capacity of an owner to meet the financing costs associated with the purchase of that plate. I note, however, that Mrs Paap was not charging the full maximum amount permissible for the lease of her plate prior to its sale.
Mr Foley gave evidence of having been contacted by members of his council who are plate owners expressing concern as to the financial implications for them as a result of the reduction in maximum lease fees. That evidence was unspecific and is of a little assistance as to the determination of these matters. The specific evidence adduced from the four applicants demonstrates a direct impact on only one of them, Mr Martino. The extent of that impact given the re‑arrangement of his use of his plates is difficult to assess.

The survey evidence used by the Director General

Section 5 of The Giffard Report deals with the topic of consultation with industry and consumers. The Report records that a process of consultation commenced with an industry forum on 26 February 2003 at which approximately 100 people attended. Presentations were given by a number of representatives from industry and consumer groups, including a representative of the Taxi Council of Western Australia.
In addition, a postal survey was undertaken. For this purpose a market research company, Market Equity Pty Ltd, was engaged. Separate survey questionnaires were developed for industry participants on the one hand and consumer representatives on the other. The survey for industry participants was mailed to 2712 registered taxi drivers, 483 taxi plate owner drivers, 505 non‑driving taxi plate owners, 7 taxi management companies and 5 taxi despatch services. The response rate was 44% for taxi plate owners, 62% for taxi plate owner drivers, 26% for taxi drivers, 57% for management companies and 60% for taxi despatch services.
The report by Market Equity concerning its survey was produced at the hearing. In relation to the response rate, the report indicates that the survey set out with a target response rate of 25%, or approximately 900 responses. In total, 34% of the industry responded, resulting in a final 33% or 1211 respondents providing a usable response. According to Market Equity, a response rate above 25% for a survey of that type is considered to be a good outcome.
There were five parts to the survey – Pt 1 focussed upon questions about the possible deregulation of the taxi industry. Pt 2 dealt with improving customer service. Pt 3 of the survey was headed "Improving Driver Income", and canvassed the possibilities of reducing current lease rates, setting maximum lease rates at current market average and freezing them for two years before annual review, offering additional licences at lower lease rates and two other alternatives. Pt 4 was headed "Current Lease Costs – to be completed by owners, owner drivers, management companies and plate lease drivers". The introductory words to Pt 4 read "Part of the government’s objectives is to improve the returns to drivers. Your feedback will determine the current market average prices for the various types of taxi leases." A question then followed "How much do you charge your drivers per week to lease a taxi plate? Please indicate average charge per week including GST."
Pt 5 was headed "Current Lease Costs – to be completed by all drivers." It included a question "How much, including GST, do you pay to lease a taxi plate per week?"
The results of those questions revealed that the average plate lease rate indicated by plate lease drivers was $346.16. The average rate charged by owner drivers was $355.61, and by owners who do not drive, $336.70. The average over all owner types was $340.37.
Although it may be accepted that some owners are not registered for GST, and thus the amount paid by drivers to them would not be inclusive of GST, the averages revealed by the survey purport to be GST inclusive.
The applicants argued that the survey results were unreliable. They relied on Mr Foley’s evidence in this regard. Mr Foley asserted that not all owners took the opportunity of answering the survey and that its purpose was not fully understood.
There are a number of reasons why the reliability of the survey results should be accepted. First is the assertion of the consultants engaged to undertake the survey that the response rate was good, and above than expected for a survey of this type. The second is that that reservations as to the understanding of the respondents, as expressed by Mr Foley, are quite generalised and speculative. The express terms of the survey itself made its purpose relatively clear, and the options being considered by the government were clearly stated in Pt 2 of the survey. Mr Foley’s concerns were that there was an inadequate response by owners. What is telling, however, is that the results of the survey of drivers revealed an average figure very close to the average figure derived from the responses by owners. Finally, there is nothing in the specific evidence produced by any of the applicants to suggest that the averages obtained from the survey are inaccurate. In the Tribunal’s view, the results of the survey provide a reasonably accurate indication of the average plate lease rate being charged at the time of the survey.

Consultation with plate owners or their representative organisation

One of the concerns expressed by the applicants was that the amendment to the plate lease condition was brought about without adequate consultation with the owners concerned. Apart from mere assertion, that concern finds little support in the evidence. The imposition of the plate licence condition was a consequence of the review of the industry which had been ongoing for some time and to which The Giffard Report was specifically directed. As indicated above, there was consultation in the preparation of The Giffard Report by way of a consultation forum and then a fairly comprehensive survey.
Following the Report, the Director General made an initial determination that the maximum plate lease rate should be $355 inclusive of GST. It is apparent from the briefing notes considered by the Minister, that reducing the maximum plate lease rate from $453 per week to $355 per week including GST was considered to be a minimal step in a sense that it would have little effect on the vast majority of plate leases which, the survey revealed, involved weekly rates lower than the proposed new maximum.
As a result of the meeting with industry representatives in July 2004, the maximum was changed to $355 exclusive of GST. That was, in effect, to increase the maximum rate to $390.50. That is a figure which, on the basis of the results of the survey, would appear to be comfortably above the general market rate. That change came about as a direct result of consultation with representatives of the industry, including Mr Foley.
In the Tribunal’s view, the applicants’ complaint as to the lack of consultation cannot be made out. Even if there is some basis of complaint as to the adequacy of consultation, that, of itself, would not be a reason to interfere with the decision under review. The Tribunal’s task is to conduct a review de novo involving an assessment of the merits of the decision, not a review of the process leading to the decision.

Should a plate lease rate be fixed by conditions

The issue and regulation of taxi plates creates an artificial market. Much of the impetus for The Giffard Report was a consideration of the need for regulation of the taxi industry. The conclusion of that Report, as adopted by the government, was that regulation should remain. The consequence of that regulation is that a limited number of taxi plates are issued. That limit limits the number of service providers in the taxi industry. Plates have an inherent value because they give rise to a right to earn income from taxi driving. The competition review of the Western Australian taxi industry conducted by BSD Consultants, identified, in the report of August 1999, that:
"The most noticeable consequence of the restriction on plate numbers is the development of a secondary market for plates. A secondary market implies that plates can be bought and sold by people who have no direct involvement in the industry. Many plates are bought for investment or superannuation purposes in the hope that they will appreciate in value. Due to plate numbers being limited, they accrue values which are closely related to the scarcity values of the plates and mostly independent in the underlying return from operating a taxi."
The public interest in the regulation of the taxi industry lies in the provision of an efficient, economical and safe service, as indicated in the government’s policy in relation to the taxi industry. It is to those ends that the number of plates issued is limited. It is an incidental consequence, and not an objective, of the system of regulation that plates, by reason of their scarcity value, may prove to be an avenue for investment. The regulation of the industry should not, however, be driven by the preservation of the value, or the scope for appreciation, of plates. That approach to regulation would not be consistent with the objectives of the legislation.
In order to maintain an efficient and economical industry, it is necessary that drivers, who comprise the greatest number of participants in the industry, are able to earn a reasonable return. The return to drivers who operate under plate leases is obviously affected by the amount that they are required to pay for the plate in addition to all of the other expenses they are required to meet. That is a significant factor pointing to the desirability of regulations of plate lease rates.
It was not contended by the applicants that the maximum lease rate should not be regulated. Their complaint simply lies with the level at which the maximum has been set having regard to the previous maximum. The Tribunal accepts, therefore, that some maximum plate lease rate is appropriate.

What limit should be fixed

The approach taken by the Director General was to make an assessment of the average plate lease rate being charged, and then to settle upon a figure somewhat in excess of that average but below the previous permitted maximum. In essence, the approach was to endeavour to ascertain the current market rate for plate leases and set a limit which reflects that market.
No reason has been demonstrated to depart from that approach. The figure was established after consultation and inquiry. The approach has not been demonstrated to work any significant hardship on any of the applicants in these proceedings. On the broader front, the only material which the Tribunal has to assess the impact of the changes is the survey results upon which the Director General relied. As already indicated, the Tribunal considers those results to be reliable. The figure imposed by the Director General adequately accommodates what appears to be the vast majority of plate lease arrangements operating at the time of his determination. The rationale for the limit, namely to contain costs for drivers of taxis, is a cogent and justifiable reason for the imposition.
The figure suggested by the applicants, namely $400 per week exclusive of GST, has no sound foundation, other than that is slightly less than the previous maximum limit (which was effectively $412 plus GST). On the evidence before the Tribunal, the applicants’ proposed maximum would give rise to a figure well in excess of any plate lease rental that can be identified in the evidence before the Tribunal.
It follows that, in the Tribunal’s view, no reason has been demonstrated to depart from the determination as to the maximum plate lease rental imposed by the notice of 10 January 2005.

The information condition

Each of the four applicants expressed concern as to the use that might be put to information provided pursuant to the information condition, although most conceded that, provided the information was kept confidential, their objections on that front would be diminished. Mr Abdrabou expressed the view that the information was simply irrelevant to the regulator and could see no reason why the regulator would want to know of arrangements he might make with a driver. Mr Weeks expressed concern as to the use that might be made of the information.
In his evidence, Mr Leicester said that the information obtained from compliance with the information condition would be used, in effect, to assess the current market rate from time to time, and to use that information to review the maximum rate for plate leases from time to time. The Minister’s letter to Mr Foley of 20 July 2004 makes it clear that the amendment to reg 5A and the subsequent imposition of the information condition, is designed to enable the Department of Planning and Infrastructure to undertake a detailed analysis of lease rates to enable a final decision to be made as to the maximum taxi plate lease rate.
The submissions of counsel for the applicants, and some of the comments of the applicants in their evidence, make it clear that a major concern on the part of the applicants is their uncertainty as to how the maximum plate lease rate might be reviewed and adjusted in future. If, as Mr Leicester suggested in his evidence, the sole assessment of the appropriate maximum lease rate was a calculation of the average lease rate as disclosed from information obtained through the information condition, some of the applicants concerns can be well understood. That is because the average plate lease rental could never exceed the maximum imposed by the plate lease condition. It can be assumed that there will always be plate leases entered into for less than the maximum amount for a variety of reasons. Some of the witnesses mentioned driver loyalty as a reason to charge less than what the market might otherwise command in a plate lease rental. There may be other reasons why the maximum is not charged in some cases. That being the case, the average will always be something less than the maximum which the plate lease condition permits.
The artificial impact which the plate lease maximum has on the average plate lease is not a reason to remove the information condition. Any assessment of the appropriate plate lease maximum should utilise reliable information as to actual rates being charged. The legitimate concern of the owners is that the information so obtained, when translated into an average figure, should not be blindly utilised as the sole determinant of the maximum plate lease figure on review.
The applicants’ position was that reviews should apply the PMI. For reasons previously identified, the logic of that approach is defective. It may be that some other basis of review, such as the Consumer Price Index, or some more relevant component of it, should be utilised to preserve a reasonable return to lessors of taxi plates. It is, however, no part of the Tribunal’s function on this review to identify and suggest some formula for review of the maximum plate lease rate in future. That is a matter for the appropriate decision maker at the time.
In the Tribunal’s view, the imposition of the information condition serves an appropriate and useful purpose in the ongoing regulation of the industry. There is no basis disclosed in these proceedings to set aside that condition.

Conclusion

For the preceding reasons, each of the applications for review should be dismissed.

I certify that this and the preceding [65] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUDGE J CHANEY, DEPUTY PRESIDENT
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