Boss Transport Limited v New Zealand Transport Agency
[2019] NZHC 522
•21 March 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-485-979
[2019] NZHC 522
BETWEEN BOSS TRANSPORT LIMITED
Applicant
AND
NEW ZEALAND TRANSPORT AGENCY
Respondent
Hearing: 27 February 2019
6 March 2019 – further evidence received
Appearances:
J L S Shaw and C A Donaldson for the Applicant N R Williams and J M Phillips for the Respondent
Judgment:
21 March 2019
JUDGMENT OF CULL J
TABLE OF CONTENTS
Critical events 5
Procedural history 18
Relevant legal principles 23
The statutory framework 27
The threshold issue 34
Whether to grant relief considering all the circumstances 40
The Agency’s Decision 42
The Agency’s position 47
Boss’ position 53
The strength of the judicial review claims 58
Relevant/irrelevant considerations 61
Natural justice grounds 65
Unreasonableness/proportionality 67
The overall justice of public safety and private considerations 73
Orders 85
Interim Conditions of Operation 87
Costs 90
[1] Boss Transport Ltd (Boss), a Wellington bus company, has a fleet of 73 buses and employs 37 drivers, four additional drivers, and four full-time employees. It has been in business since 2004. On Friday 21 December 2018, four days before
BOSS TRANSPORT LIMITED v NEW ZEALAND TRANSPORT AGENCY [2019] NZHC 522 [21 March 2019]
Christmas Day, the New Zealand Transport Agency (the Agency) revoked all of Boss’ transport service licences, to take effect at midnight on 21 December 2018 (the Agency’s Decision).
[2] Boss appealed to the District Court, filed for judicial review of the Agency’s Decision and immediately applied, on a without notice basis, for interim relief seeking a suspension of the Agency’s Decision.
[3] On 24 December, Boss was granted interim relief, suspending the Agency’s Decision, on conditions.1 On 4 February 2019, the Agency unsuccessfully sought to rescind the interim orders. The orders were continued, with an additional condition, until this hearing of the interim relief application.2
[4] The appeal to the District Court is set down to be heard on 27 May 2019. This hearing is an application for interim relief, in which Boss seeks a declaration that its licences remain in force until such time as the appeal and judicial review proceedings have been heard and determined. The issue I must determine is whether to extend interim relief until the determination of the appeal and judicial review proceedings.
Critical events
[5] Boss is the holder of the following licences: large passenger service licence, small passenger service licence, goods service licence, rental service licence, and vehicle recovery licence (the Licences). Boss operates 73 vehicles, primarily buses, in the greater Wellington region, including school bus services.
[6] The Agency is the regulatory body responsible for transport service operators. In particular, the Agency makes regulatory decisions regarding the ability of operators to hold transport service licences (transport licences) in accordance with the Land Transport Act 1998 (the Act). These licences are granted by the Agency, on application, to natural persons or companies if it is satisfied that, inter alia, the
1 Boss Transport Ltd v New Zealand Transport Agency HC Wellington CIV-2018-485-979, 24 December 2018 (Minute of Grice J).
2 Boss Transport Ltd v New Zealand Transport Agency HC Wellington CIV-2018-485-979, 4 February 2019 (Minute of Churchman J).
applicant is a fit and proper person and that any person who is to have, or is likely to have, control of the transport service is a fit and proper person.3
[7] The holder of a transport licence has an obligation to ensure that every vehicle to be used in the service is maintained in a fit and proper condition.4 It also has a duty to detect and eliminate traffic-related offending committed by employed drivers in the interests of public safety, and to ensure that all its activities are carried out safely and in accordance with the relevant prescribed safety standards and practices.5
[8] Section 30S(1) of the Act provides that the Agency may revoke a transport licence if satisfied that either the holder of the licence, any person who has control of the transport service, or any driver, is not a fit and proper person.
[9] In June 2017, the Agency visited and spoke with Boss about traffic and speeding offences, vehicle maintenance faults, and a number of systems the Agency expected to be put in place. The following year, between April and November 2018, there were 26 instances of alleged non-compliance by Boss vehicles, including 11 “pink stickers” (a direction to remove a vehicle off the road) and 15 infringement notices.6
[10] On 18 October 2018, the Agency served Boss with a Notice of Proposal to Revoke the Licences (Revocation Proposal).7 A Notice of Immediate Suspension from driving a vehicle used in a transport service was simultaneously served on Mr Malcolm Little, the sole director and shareholder of Boss.
[11]In the Revocation Proposal, the Agency set out the matters of concern:
(a)vehicle maintenance issues and faults being found at roadside inspections, including the repeated operation of vehicles that were not
3 Land Transport Act 1998, s 30L.
4 Land Transport Act 1998, s 30A.
5 Land Transport Act 1998, s 4(3) and 5; and McCrostie Trucking Ltd v New Zealand Transport Agency [2018] NZHC 2736 at [26].
6 “Pink stickers” is a reference to a notice issued under s 115(3) of the Land Transport Act 1998 directing that a vehicle must be removed from, and not driven on, the road.
7 Issued under ss 30C-30F, 30S and 30W of the Act.
up to Certificate of Fitness standard and a number of instances where the police had issued vehicles with pink stickers due to mechanical issues. The nature of Boss’ business involving the operation of large passenger vehicles, including school buses, made these matters of particular concern;
(b)179 instances of Boss’ traffic offending between 2011 and 2018, including for speeding, exceeding distance licences, aiding and abetting an unlicensed driver, vehicles not being up to Certificate of Fitness standard, and operating a vehicle with an insecure load and a smooth tyre; and
(c)a lack of systems in place to manage fatigue and other aspects of driver health and safety.
[12] In addition, the Agency notified Mr Little that he was a not a fit and proper person to be in control of a transport service and set out its reasons. This finding is not the subject of the judicial review proceeding.
[13] Boss was advised of its right to make written submissions by 16 November 2018, and its right of appeal in the event its Licences were revoked. In response to issues raised in the Revocation Proposal, Boss implemented new policies and procedures in October and November 2018.
[14] Boss, through its lawyers, advised that submissions would be provided in opposition to the Agency’s Revocation Proposal after disclosure of requested documents by Boss. After a number of disclosure and extension requests (some of which the Agency granted), on 4 December 2018 Boss filed its submissions, supported by affidavits, which broadly stated:
(a)a number of policies had been implemented in order to improve Boss’ compliance with the Land Transport Rules and Regulations, including the employment of a compliance officer, improving servicing and
maintenance procedures, and implementing new policies around speeding, Road User Charges and logbook recording;
(b)it acknowledged traffic offending, although the number of offences constituting serious non-compliance was disputed; and
(c)it raised a number of factual disputes regarding the infringements identified at various roadside inspections.
[15] Between October and November 2018, there were 11 instances of alleged non- compliance by Boss vehicles, including five pink stickers, and six infringement notices.
[16] Reviewing this material, the Agency “remained of the view” that Boss was not a fit and proper person to be the holder of a transport service licence and decided, on 20 December 2018, to issue a Notice of Decision to Revoke the Licences. The revocation was to take effect from midnight on 20 December 2018. Because of a technical error, the Notice of Decision to Revoke the Licences was reissued and served on 21 December 2018, to take effect on midnight of 21 December 2018.
[17] Boss has both appealed and applied for judicial review of the Agency’s Decision and applied for interim relief, as the Agency’s Decision remains in effect pending appeal. Under the Act, the District Court cannot grant a stay.8
Procedural history
[18] The without notice interim order application was dealt with urgently on a Pickwick basis on 24 December 2018. Grice J granted interim relief, prohibiting the Agency taking any further action on its Decision and declaring that the Licences continue subject to a number of conditions, including the appointment of a new Person in Control, increased vehicle inspections, internal safety checks, and pre-departure inspection checklists, which are to comply with Boss’ inspection policy and are to be
8 Section 106(3). See further at [30] and [31] of this judgment.
audited daily, copies of which are to be provided to the Agency on a weekly basis upon request.
[19] On Sunday 27 January 2019, at Otaki shortly before midnight, the police, accompanied by Agency personnel, stopped three buses operated by Boss over concerns the drivers had exceeded their maximum working hours. The buses were returning from a rowing regatta in Cambridge and had school students, parents, and teachers on board. The drivers of the buses had flown from Wellington to Hamilton on the day in question, prior to commencing driving. Each had recorded different start times in their logbook and it appears there was no consistent understanding by the drivers as to when they actually started work (whether that was when they started driving the bus, when they departed from Wellington on the plane for Hamilton, or when they were picked up and driven to the airport). Boss sent replacement drivers to Otaki to complete the journey.
[20] On stopping the second bus that night, an Agency officer announced to the passengers that the bus was unsafe because it had a cracked chassis and instructed the police to issue a pink sticker requiring the bus to be removed from the road. Two hours later, although a replacement bus had arrived to take the passengers, the bus was permitted to be driven back to Wellington because it was “a compliance issue” only, and the bus was cleared on subsequent inspection.
[21] As a consequence of this incident at Otaki (the Otaki incident), the Agency applied to revoke the interim relief made by Grice J. Boss opposed this. On 4 February 2019, this matter came before Churchman J, who was not persuaded the orders should be rescinded for two reasons: the drivers involved had not previously been flown somewhere and then driven, which went some way to explaining their confusion over the completion of their logbooks, and there was no breach of the conditions imposed by Grice J.
[22] Churchman J concluded that as the matter was already set down for hearing in relation to the interim relief application on 27 February, it was more appropriate to address all matters in the course of that hearing. Accordingly, he extended the interim orders until 27 February, adding a further condition that all drivers employed by Boss
will at all times comply with all aspects of the driving hours legislation, and any breach of that obligation shall entitle the Agency to bring this matter before the Court on two days’ notice.
Relevant legal principles
[23] This is an application for interim relief in a judicial review proceeding. Section 15 of the Judicial Review Procedure Act 2016 and r 30.4 of the High Court Rules 2016 apply. Section 15 allows the Court to make interim orders of the kind sought by Boss if, in the Court’s opinion, “it is necessary to do so to preserve the position of the applicant”.9 Interim orders include a declaration that any licence that has been revoked continues and, where necessary, is deemed to have always continued.10 An order under this section may be made subject to such terms and conditions as the Court thinks fit, and be expressed to continue in force until the application is finally determined.11
[24] I must now determine whether it is necessary for interim relief to be continued to preserve Boss’ position. If that threshold is met, then the Court should consider whether to grant the relief considering all relevant circumstances, such as the strength of Boss’ review claim, the statutory framework, and the public and private implications of granting relief.12
[25] The benchmark decision on the granting of interim relief is Carlton & United Breweries Ltd v Minister of Customs.13 In that case, Cooke J described the approach as a two-stage test:14
In general the Court must be satisfied that the order sought is necessary to preserve the position of the applicant for interim relief – which must mean reasonably necessary. If that condition is satisfied… the Court has a wide discretion to consider all the circumstances of the case, including the apparent strength or weakness of the claim of the applicant for review, and all the repercussions, public or private, of granting interim relief.
9 Section 15(1).
10 Section 15(2)(c).
11 Section 15(4).
12 Carlton & United Breweries Ltd v Minister of Customs [1986] 1 NZLR 423 (CA) at 430.
13 Carlton, above n 12.
14 At 430.
[26] The two-stage test in Carlton has been adopted in several cases where issues of public safety were involved and s 106(3) of the Act, preventing a stay pending an appeal, was engaged. The statutory framework of the Act has led to the Courts taking a cautious approach to the granting of interim orders for relief, as I canvass below.
The statutory framework
[27] Underpinning the Land Transport Act regime is “the promotion and maintenance of road and vehicle safety.”15 The preamble to the Act provides that it is an Act “to promote safe road user behaviour and vehicle safety”.
[28] Section 30S of the Act allows the Agency to revoke a transport service licence held by an operator if the Agency is satisfied that the holder of that licence is not a fit and proper person. The criteria for assessing whether a holder of a passenger service licence is fit and proper are set out at ss 30C-30E, and may relevantly include “any other matter that the Agency considers it is appropriate in the public interest to take into account”.16 As the Agency submits, the Act provides the Agency with a wide discretion, focused on public safety.
[29] It has been accepted by this Court that the holding of a transport service licence is a privilege, not a right.17 Public safety will always be a critical and ongoing factor. Licensees must therefore “continue to earn their privilege.”18 If they infringe sufficiently seriously or persistently and so compromise public safety, their licences can be revoked.19
[30] The Act provides for a process to be followed before revocation can occur. Following revocation, Parliament has then allowed for an appeal to the District Court. However, s 106(3) provides that “no person is excused from complying with any of the provisions of this Act on the ground that any appeal is pending”. Parliament has therefore mandated that “once a decision is made, it is to take effect unless and until a
15 Foreman Automotive Ltd v New Zealand Transport Agency [2013] NZHC 1167 at [50].
16 Section 30C(2)(f).
17 Cheyenne Haulers Ltd v The New Zealand Transport Agency HC Auckland CIV-2001-404-2456 [12 May 2011] at [41].
18 At [41].
19 At [41].
Court overturns it on appeal.”20 The District Court, therefore, has no power to stay the Agency’s decision pending appeal.
[31] The Court of Appeal in Director of Civil Aviation v Air National considered the relevance of the prohibition on the District Court’s power to stay and the High Court’s interim relief jurisdiction, and advised caution in this statutory context. The Court expressed it as follows:21
We accept that the High Court has jurisdiction to make interim orders in this type of case… However, courts do need to be cautious in this context. As we have said, the effect of statutory provisions such as s 66(3) of the Act and s 106(3) of the Land Transport Act is to deprive the District Court of the power to grant a stay on an appeal in circumstances where otherwise it would have had that power. Too ready a resort to s 8 [of the Judicature Amendment Act 1972, now s 15 of the Judicial Review Procedure Act 2016] runs the risk of undermining such prohibitions and creating an incentive for appellants to launch judicial review proceedings simply to access the High Court’s s 8 [now s 15] jurisdiction. At the very least, this will be a relevant consideration to the exercise of the discretion.
[32] In a number of cases, this Court has observed that once the Agency has determined that a licence should be revoked, the private interests of those parties are considered secondary to the broader interests of public safety under the Act.22 In three cases, this Court has declined interim relief in such situations, observing that there are separate statutory appeal rights which preclude a stay, and interim relief is likely to be “exceptional”.23 However, where the facts supported strong grounds for judicial review, and the substance of the appeal appeared to have merit, the Court has held interim relief was justified.24
[33] I must now determine whether the continuation of interim relief is necessary to preserve the position of the applicant before proceeding to consider all the circumstances of the case.
20 Foreman Automotive, above n 15, at [52].
21 Director of Civil Aviation v Air National Corporate Ltd [2011] NZCA 3 at [30].
22 Foreman Automotive, above n 15, at [52] and [53].
23 Foreman Automotive, above n 15, at [19]; Cheyenne, above n 17 at [35]; and McCrostie, above n 5, at [50].
24 Travlon Coachlines (2005) Ltd v New Zealand Transport Agency [2018] NZHC 558; Moffatt v New Zealand Transport Agency HC Dunedin CIV-2011-412-000679, 28 October 2011; and Pohoikura Waitoa Logging Ltd v New Zealand Transport Agency HC Gisborne CIV-2010-416- 277, 19 November 2010.
The threshold issue
[34] The purpose of the necessity test is to give a right of protection on an interim basis to an applicant who may otherwise be unfairly prejudiced by reason of a delay in obtaining a final hearing.25
[35] Boss submits there is a necessity for interim relief to preserve its position. It submits that if interim relief is not granted and the Licences are revoked, Boss will suffer irreparable harm before it has the opportunity to exercise its legal rights to challenge the Decision.
[36] Boss is a large operation providing passenger services, which is the core aspect of Boss’ business. It has a fleet of 73 buses and employs 37 drivers and four additional drivers who are contracted regularly. There are four full-time employees in addition to the sole director and shareholder of Boss, Mr Little. If Boss cannot operate due to its Licences being revoked and relief is not granted, Boss will have to close its business and make its employees redundant, as there is no alternative “caretaker operator” option available in the interim.
[37] Boss revealed that one of its core customers is Transdev Wellington Ltd, for whom Boss provides replacement transportation for the Hutt Valley railway service. Without interim relief, Boss will lose its tender and, it submits, would not regain it if it was placed in a position of having to revive its business after the appeal or judicial review proceedings. In addition, Boss has significant outstanding loans. If Boss is unable to operate, it will not have enough cashflow to meet these repayments. Liquidation of the company will be inevitable. There are, therefore, multiple effects on Boss’ business, its employees, and its clients if interim relief is not granted to enable it to continue its operations.
[38] The Agency accepts that the threshold test is met in this case, as interim orders are reasonably necessary to preserve the current position of the applicants. However, the Agency submits interim relief is not appropriate in this case and says that hardship
25 Woodhouse v Auckland City Council (1984) 2 PRNZ 6 (HC) at 8.
to a company cannot offset public safety concerns. I address this submission below in the second stage assessment.
[39] I adopt the two-stage test in Carlton Breweries, as has been adopted in other cases.26 I am satisfied that the first step has been met, that the continuation of interim orders are reasonably necessary to preserve Boss’ position until the substantive determination of the judicial review.
Whether to grant relief considering all the circumstances
[40] I now consider the second step, whether interim relief is appropriate in all of the circumstances, including the strength and weakness of the judicial review claims, the statutory context and the public and private repercussions of granting relief.
[41] The starting point in considering all the circumstances of this case is the Agency’s Decision.
The Agency’s Decision
[42] The Agency revoked Boss’ Licences under s 30C of the Act, “having regard to the interests of public safety”. Those public safety interests were:
(a)the continuing failure to adequately maintain its vehicles to a safe standard; and
(b)the failure to ensure that traffic offences, including speeding offences, are not committed by the company or its drivers; or
(c)the need to ensure that such offences are appropriately disciplined.
[43]The reasons for the Decision were summarised as being threefold:
(a)there remains an absence of established systems or processes at Boss to ensure that its vehicles are complying with the Act, despite issues with vehicle maintenance being raised by the Agency with Boss at the June 2017 meeting;
26 See Foreman Automotive, above n 15, at [24]; Moffatt, above n 24, at [16]; and Travlon Coachlines, above n 24, at [12].
(b)since receiving the Revocation Proposal in October 2018, the number of vehicle infringements incurred by Boss demonstrates that the policies put in place by Boss are insufficient to ensure compliance with the Act; and
(c)Boss “has an extensive transport-related offending history” with speeding and logbook infringements by Boss’ drivers appearing to be tolerated.
[44] The Decision noted there were 179 traffic charges against Boss between 2011 and 2018, with the most common offence being speeding. The other offences included exceeding the maximum reading on a distance licence and operating vehicles not up to Certificate of Fitness standard. The frequency of the offending was considered serious, particularly because a significant portion of Boss’ fleet transports schoolchildren.
[45] The Decision focused on the non-compliance with vehicle maintenance, particularly because this issue was identified as a concern in the Revocation Proposal and four vehicles received pink stickers in roadside inspections between 29 October and 28 November, six weeks after the Revocation Proposal was issued.
[46] Finally, the Agency’s Decision noted that a secondary ground for the Revocation Proposal was that Mr Little was not a fit and proper person to be in control of a transport service, and that the Agency has now received an application to change the Person in Control. No significant weight was placed on this application because the primary ground for the Revocation Proposal was that Boss, as a transport service licensee, was not fit and proper to hold the licences and this continued “to be of major concern”.
The Agency’s position
[47] For the Agency, Mr Williams reiterates that the Agency’s matters of concern are threefold. The first is the vehicle maintenance issues and faults found at roadside inspections, including instances in 2018 where vehicles were issued with pink stickers. This followed a “warning meeting” in June 2017, where Boss’ roadside inspection pass rate was “only 60 per cent”, which was below the national average of 83 per cent. The second concern is the traffic offending of Boss drivers between 2011 to 2018. The
third matter is the lack of systems in place to manage fatigue and other aspects of driver health and safety, including compliance with driving hours and the keeping of logbooks.
[48] The Agency’s primary safety concerns focus on 11 incidents in 2018, in which Boss’ vehicles were issued pink stickers by the police at roadside inspections. It was these ongoing compliance issues concerning vehicle maintenance which led the Agency to conclude that Boss was either unwilling or unable to comply with the necessary compliance requirements, demonstrated by the issue of pink stickers to four vehicles in October and November 2018, up to six weeks after the Agency had issued its Revocation Proposal.
[49] Although Boss has made an application to change the Person in Control, the Agency submits that the employment of Mr Doran as Compliance Officer does not allay its concerns over public safety, because Mr Doran admitted he does not understand the meaning of “work time”, and feels “hamstrung by senior staff and believes he is outside the loop and unable to do his job effectively.” The Agency does not have confidence that Mr Doran is able to ensure compliance of the company and its drivers, and therefore the risk to public safety still remains.
[50] The Agency further submits that the reference to Boss’ mechanics and repairers does not allay its concerns, as such services are carried out by Boss Transport Repair Ltd, which is operated by Mr Little (whom the Agency has deemed not fit and proper to be in control of a transport service).
[51] Just prior to this hearing, the Agency filed and served two further affidavits, in which two of the Agency’s officers undertook a review of Boss drivers’ checksheets for January and February 2019. They concluded that Boss had not complied with this Court’s conditions that Mr Collinson undertake a daily audit of the checksheets and that many of the faults listed by Boss’ drivers had no record of any inspection of the fault or repairs undertaken. Further, a Boss vehicle had failed its Certificate of Fitness on 15 January 2019 due to brake faults. This occurred, the Agency says, despite the condition that predeparture inspections, vehicle condition assessments, and internal safety checks were carried out for all Boss vehicles.
[52] As such, the Agency submits that interim relief pending the substantive hearing of the judicial review proceeding should not be granted, because the Court should do so only in exceptional circumstances, the applicant’s grounds for judicial review are only arguable at best, and hardship caused to Boss through the revocation of the Licences cannot outweigh the significant risks to public safety of Boss’ continued operation.
Boss’ position
[53] The main thrust of Boss’ argument in this interim relief hearing is that there has been “overreach” on the part of the Agency in relying on instances of alleged non- compliance. Many of these instances, it says, have turned out to be improperly founded or illustrate that the Agency has placed too great a reliance upon issues that do not give rise to significant public safety concerns.
[54] Boss has raised significant factual disputes with a number of the alleged infringements issued as pink stickers which, it says, related largely to vehicle faults and maintenance issues. At its highest, Boss says, some relate to oil leaks or fuel sediment around the fuel tank. Boss takes issue with a number of the infringements, both in the period April to November 2018 and the more recent examples in January and February 2019 of alleged infringements or breaches of the interim relief conditions on daily audits and checksheets as being either unjustified or an overreach of the Agency. Boss submits that the recording of the repairs was not a condition imposed by the Court, but it has now been implemented at the Agency’s recommendation. Further, regarding the allegation that a vehicle failed its Certificate of Fitness in January 2019 because of a brake failure, Boss submits the vehicle had been undergoing repairs, including to its brakes, and instead of being taken for a VCA check first, the vehicle went for a Certificate of Fitness. The brakes were repaired further and the vehicle obtained its Certificate of Fitness.
[55] Boss also points to the Otaki incident as an example of the Agency’s overreach in its treatment of Boss.27 After midnight on 27 January 2019, one of Boss’ buses was stopped and the police issued a pink sticker because the bus was alleged to have a
27 See paragraphs [19] and [20] of this judgment.
cracked chassis, and Boss had to provide a replacement bus. Ultimately, the Agency allowed the bus to be driven back to Wellington because it was a “compliance issue”. The bus was subsequently cleared on inspection, and no further steps were taken.
[56] Boss draws attention to the alleged safety concerns arising from the non- compliance incidents, which seem less obvious than in other comparable cases.28 There are a number of examples, which included a bus being driven with an expired Certificate of Fitness, failing to display a school bus sign when required, driving a vehicle with temporary exemption from continuous licensing, exceeding the maximum reading on a distance licence, and operating a bus with a faulty rear door. Boss says the instances of fluid or oil leaks do not raise serious public safety concerns, and explains that residue fuel observed on top of fuel tanks resulted from drivers failing to clean any spillage from the fuel tank when refuelling their vehicles. Other instances of oil or fluid leaks are either disputed or taken outside of their factual context.
[57] I cannot resolve the factual disputes over the non-compliance issues between Boss and the Agency on this interim relief hearing. They are more appropriately dealt with at the appeal hearing in the District Court. I will deal with the non-compliance infringements in the context of the judicial review challenge only, in as far as they relate to Boss’ claims.
The strength of the judicial review claims
[58] Boss submits it has a seriously arguable case in relation to the application for judicial review for the following reasons:
(a)the Agency failed to take into account relevant considerations, including ignoring the specific factual disputes raised in Boss’ responses;
28 In both Cheyenne and Travlon Coachlines, for example, the attention of the Agency was drawn to the companies because of serious road accidents. See Cheyenne, above n 17; and Travlon Coachlines, above n 24.
(b)the Agency took into account irrelevant considerations, including various incidents from up to seven years prior;
(c)insufficient weight was placed on the changes Boss had made to improve its systems and processes, with undue weight being placed on Boss’ delay in making those improvements; and
(d)the Decision was unreasonable.
[59] In its judicial review proceedings, Boss claims that the Agency did not consider its submissions but has merely paid lip service to them. It says the Agency has not taken into consideration in its Decision the substantive points made by Boss which address the relevant issue of public safety concerns.
[60] I now turn to assess the strength of the applicant’s grounds of review. The High Court, in the substantive proceedings, will have to consider the following grounds, which have been grouped under three heads of claim.
Relevant/irrelevant considerations
[61] The principal issue under this review ground is whether the Agency failed to take into account Boss’ submissions in relation to the substance of the vehicle safety infringements, which formed a substantive part of its Decision. The Decision records that Boss’ submissions raise factual disputes about the roadside inspections, including the four pink sticker infringements between 29 October and 28 November 2017, (noting that this was after the Revocation Proposal was served). However, the decision-maker did not consider the substance of Boss’ challenges because Boss did not dispute them with the police at the time. No further inquiry was made about whether any of the pink stickers were significant or raised serious public safety concerns, such that the Agency should revoke the Licences in each of the four respective circumstances. In the summary of infringements provided by Mr Williams, one of those pink sticker events involved a vehicle continuing a journey with tourist passengers after the pink sticker was issued because there was no immediate risk to safety.
[62] Although not pleaded, I note the provisions under the Act which require a person who receives notice of a proposed adverse decision by the Agency to ensure all information she or he wishes to be considered is received by the Agency within the relevant time period.29 Section 30X(c) of the Act then provides that the Agency “must consider any submissions made”, but is not obliged to hear the person on the matter.30
[63] This is a matter the Court will have to consider in ascertaining whether the decision-maker failed to take into account a mandatory relevant consideration by not considering the substance of Boss’ submissions, or whether she was entitled to rely on the infringement notices as issued, to determine that Boss was not fit and proper to hold its Licences in the interests of public safety.
[64] It is also arguable that the Agency’s decision-maker failed to take into account the changes that Boss had made to its operation, including a replacement Person in Control and its policy changes and whether those changes were actually “limited” or “insufficient”, or too delayed. In addition, Boss claims that the Agency took into account irrelevant considerations, including instances of offending between two and 11 years ago.
Natural justice grounds
[65] Under the natural justice claims, which overlap with the relevant consideration grounds, the Court may also be required to assess whether there has been a breach of natural justice in the way that the Agency:
(a)failed to address the factual disputes regarding the infringements arising from police roadside inspections to ascertain whether they gave rise to concerns in the interests of public safety;
(b)failed to address the substance of the four examples of pink stickers in October and November 2018, after the issue of the Revocation Proposal, when the Agency relied on those four instances to illustrate ongoing compliance issues with Boss vehicles; and
29 Sections 30W and 30X of the Act.
30 Emphasis added.
(c)failed to give Boss a fair hearing by disregarding its submissions, both in relation to roadside infringements and the implementation of policy changes and compliance systems at Boss, because the infringements were not disputed at the time with the police and its systems were implemented “late”.
[66] There are other natural justice issues which were raised at the interim hearing. These included:
(a)the Agency failed to give Boss any warning prior to the Revocation Proposal;
(b)the meeting in June 2017 was not a warning given by the Agency, but was a collaborative meeting to assist Boss to achieve a five star ORS rating; and
(c)the Agency did not give adequate and sufficient reasons for revoking all of Boss’ licences in its Decision.
Unreasonableness/proportionality
[67] Boss makes a further claim that the Agency’s Decision was unreasonable in determining that the Licences should be revoked. Although the grounds of review have not been fully pleaded, I consider that there is an arguable and potentially strong ground of review that the Agency’s Decision to revoke the Licences in these circumstances was a disproportionate response. While it is not clear whether proportionality is a distinct head of review, proportionality is considered as a subset of reasonableness, particularly in cases where penalties are imposed.31
[68] Boss has been operating for 14 years since 2004 and has been a significant operator for a long period of time, with a current fleet of 73 buses. As at June 2017, Boss had a four-star rating on the Operator Rating System (ORS), which rates
31 Institute of Chartered Accountants v Bevan [2003] 1 NZLR 154 (CA) at [53] and [55]; and see Isaac v Minister of Consumer Affairs [1990] 2 NZLR 426 (CA) at [636] and McGuire v Ministry of Justice [2013] NZHC 894 at [78].
operators’ compliance with primarily maintenance and Certificate of Fitness issues. Boss had received an assessment of “good level of compliance” on the Agency’s ORS rating score that was then in use and had a 98 per cent pass rate of their Certificates of Fitness measurements.
[69] Boss had these ratings from the Agency when they met in June 2017. The decision-maker records that Boss’ positive rating was being taken into account, but appears to discount any value attaching to those ratings because “the ORS system is a limited tool which does not include all offences”.
[70] In all the years of its transport operation, Boss has not had any accidents or injuries. In the Decision, Boss’ accident-free record is not mentioned. Mr Williams submits that there should be no requirement for the Agency to wait for an accident or injury to occur before the Agency takes action in the interests of public safety. While that position is, of course, correct, the facts here contrast markedly with the other cases upon which the Agency now relies, where there have been fatal accidents and serious injuries as a result of inadequate vehicle maintenance and undetected serious faults.32
[71] Although non-compliance with driver health and safety, including logbooks and hours, driver speeding, and vehicle faults and maintenance are important compliance issues, the Agency as a decision-maker, entrusted with a discretion under the Act, must ensure that serious penalties or consequences are reserved for truly serious cases. Numerous authorities stress that there must be a correlation between offending and the outcome.33 It will be a question for the substantive hearing whether lesser options should have been adopted in the circumstances of this case,34 and whether conditions attaching to a licence, involving compliance systems, audit arrangements, and independent vehicle assessment were not more appropriate options for the Agency to have adopted in these circumstances.
[72] In the circumstances, I consider that Boss has a reasonably strong and arguable case in judicial review and, it appears on a brief overview, it has an arguable factual
32 Foreman Automotive, above n 15; McCrostie, above n 5; and Cheyenne, above n 17.
33 Battison v Melloy [2014] NZHC 1462 at [58].
34 Patel v Dentists Disciplinary Tribunal HC Auckland AP 77/02, 8 October 2002 at [31].
challenge to be heard by way of appeal. However, I have undertaken the assessment of the strength of Boss’ judicial review claim, without assessing the strength of its case on appeal. I note the caution expressed by the Court of Appeal in Air National, that the removal of the District Court’s grant of stay does not encourage a different approach by this Court to the grant of interim relief on judicial review simply because the applicant wishes to preserve the benefit of a right of appeal to the District Court.35
The overall justice of public safety and private considerations
[73] I now turn to balance the public and private interests. I accept that the Agency is a specialised statutory body with expertise in vehicle safety issues, and that the public interest is effectively represented by road safety considerations.
[74] Mr Williams, for the Agency, relied on authorities which held that the grant of interim relief in these circumstances will be exceptional. He submitted relief should not be granted here. However, all decisions on interim relief are fact-specific and the facts in those cases need to be examined carefully and compared to the facts here.
[75] In Foreman, the applicant operated two vehicle-inspecting organisations.36 The Agency had concerns that vehicles that were not up to Warrant of Fitness standards were being inspected and issued with Warrants of Fitness. The Agency’s concerns came to a head when a vehicle which had been repaired by the applicant’s vehicle inspector and issued with a Warrant of Fitness was involved in a fatal accident.
[76] In Hossain v New Zealand Transport Agency, the Agency revoked a taxi driver licence for motor vehicle charges for failing to stop when required, failing to remain stopped and operating a vehicle in a dangerous manner.37 Interim relief was declined because of the serious public safety concerns arising from the driving offences of a taxi driver, who transports members of the public.
35 Air National, above n 21.
36 Foreman Automotive, above n 15.
37 Hossain v New Zealand Transport Agency HC Auckland CIV-2011-404-004986, 14 September 2011.
[77] In McCrostie, the applicant was a goods transport operator which had accrued 105 traffic-related offences between October 2004 and March 2018.38 Twenty-five of those offences related to operating overloaded and over-dimensional heavy motor vehicles, and 13 involved operating uncertified heavy motor vehicles and vehicles not up to Certificate of Fitness standards.39 There were 38 breaches of the road user charges and 26 speeding offences. The company had also failed 34 Police roadside safety inspections and the faults detected were of concern as they included brake faults, damaged towing connections, insufficient tyre tread, damaged or deteriorating suspension components, and non-functioning or non-complying lights or indicators.40 In addition, 49 of the company’s drivers had been apprehended for a further 105 safety- related offences while driving heavy motor vehicles in connection with the company’s transport services. They included 57 speeding offences, two offences of carelessly using a heavy motor vehicle, and various offences involving a failure to comply with traffic rules or rules relating to logbooks and work time.41 The manager himself personally committed more than 80 traffic offences since gaining his licence in 2000, of which 39 were while driving heavy motor vehicles. He had been given 16 warnings by the Agency in the interests of public safety between 2001 and 2018.42
[78] These are all examples of serious public safety concerns. In contrast, and on the facts before me, I am driven to the same conclusion as Chisholm J in Moffatt v New Zealand Transport Agency.43 Although Boss is an operator of bus transport, including school buses, and regulatory compliance is essential for public safety, I fail to see how there is a compelling public interest in terms of road safety in these circumstances that justifies the loss of all licences for this significant transport operator.
[79] If interim relief is not granted, it is clear that the potential private consequences to Boss are serious. The Decision will require Boss to close its business and cease operating. To put Boss out of business and its employees out of work, before Boss has
38 McCrostie, above n 5.
39 McCrostie, above n 5, at [7].
40 At [8].
41 At [9].
42 At [11].
43 Moffatt, above n 24, at [23].
had an opportunity to have its appeal heard by the District Court and its substantive review application considered by this Court, would be unjust in the circumstances.
[80] Boss points to the changes it has made to its operation and policies to address the safety concerns raised by the Agency, which include:
(a)employing a Compliance Officer, Michael Doran, who is responsible for overall compliance at Boss, including training and disciplinary action;44
(b)implementing a speeding policy whereby offences are reallocated to the relevant driver for payment;
(c)implementing a logbook where drivers’ hours are now recorded when preparing the daily roster;
(d)moving to an electronic system for the purchase of road user charges;
(e)supplying degreasers and water at the fuel station on site and requiring its drivers to stop filling the fuel tanks after the first “click” and to wash down the tank where there is any residue or overflow;
(f)implementing a pre-departure inspection policy and updating its pre- departure checklist;
(g)requiring its drivers to each fill in a “bus acceptance and defect card” when undertaking a pre-departure inspection;
(h)requiring mechanics to check any faults identified on the “bus acceptance and defect cards” and record their determination as to whether the repair requires immediate attention or can be addressed within a period of days afterward;
44 Mr Doran denies the Agency’s allegations at [49]. This is a matter for the substantive hearing.
(i)requiring repairers to put their name and signature next to the fault identified on a “bus acceptance and defect card”, with details of the time and date of the repair undertaken;
(j)implementing a system whereby vehicles that are not to be used due to maintenance requirements or compliance issues are stickered “off the road”; and
(k)continuing to provide further education and training to all drivers and staff to ensure Boss is a safe and compliant passenger transport service.
[81] Additionally, Boss submits it continues to comply with the conditions imposed on the grant of interim relief by both Grice J and Churchman J, which require independent assessment and audit of repairs and maintenance to vehicles, and compliance with driver hours, legislation and logbooks.
[82] I am satisfied that it is necessary to grant interim relief to Boss, to preserve its position pending the substantive judicial review proceedings. I consider the combination of the changes made by Boss and the conditions of interim relief address the immediate safety concerns of the Agency, including the Agency’s concern about the oversight of Boss’ repairs and maintenance.
[83] Before the substantive judicial review proceedings are heard, in line with the authorities, Boss’ right of appeal should be exercised and its appeal determined.45 It is important now that an adequate fixture time is obtained in the District Court to properly hear the appeal lodged by Boss.
[84] Counsel for the parties should now submit memoranda as to a proposed timetable for the substantive judicial review hearing, with a view to having this matter heard as promptly as possible, preferably following the appeal.
45 A J Becroft and G G Hall (eds) Becroft and Hall’s Transport Law (NZ) (online ed, LexisNexis) at [LTA106.5].
Orders
[85]Interim relief is granted to Boss Transport Limited (the applicant).
[86] The New Zealand Transport Agency (the respondent) is prohibited from taking any further action that is or would be consequential on its Decision to revoke the applicant’s Transport Service Licences.
Interim Conditions of Operation
[87] The applicant’s Transport Service Licences are deemed to continue in force until its application for judicial review of the respondent’s Decision has been determined, on the following conditions:
(a)If and when approved as a Person in Control of the applicant by the respondent, Michael John Doran will operate as the Person in Control of the applicant in place of Malcolm Little and James Petrie.
(b)The applicant is to undertake three-monthly vehicle condition assessments at Vehicle Testing New Zealand in respect of all vehicles operating. This will involve an independent assessment of the repair and maintenance work needed on the relevant vehicle. The vehicle condition assessment is to include all items that would be regularly assessed in a Certificate of Fitness inspection, being:
Wheel and tyre condition; Mudguards and mud flaps;
Brake performance and condition; Structural condition;
Lighting performance and condition; Glazing;
Windscreen washers and wipers; Doors;
Safety belts;
Occupant protection systems; Speedometer;
Steering and suspension;
Exhaust condition and performance; Fuel system condition;
Towing connections;
Load anchorage systems;
Stock crate and crate retention system condition; and Validity of the registration and road user charges labels.
(c)The applicant is to conduct internal safety checks at least every three months under the supervision of David Collinson, who is an ex-VTNZ employee. Such checks are to include all items that would be regularly assessed in a Certificate of Fitness inspection, as detailed above.
(d)The applicant is to continue undertaking predeparture inspections prior to each use of the relevant vehicle. The predeparture inspections are to comply with Boss’ predeparture inspection policy and checklist and will include an appropriate inspection underneath the bus. These checks are to be audited daily by, or under the supervision of, David Collinson.
(e)The respondent is to be provided with copies of the predeparture inspections checklists and the audits on a weekly basis, upon request.
(f)All drivers employed by the applicant will at all times comply with all aspects of the driving hours legislation, and any breach of that obligation shall entitle the respondent to bring this matter before the Court on two days’ notice.
[88] Counsel for the parties are to file memoranda as to a proposed timetable for the substantive judicial review hearing.
[89] Leave is granted to either party to seek to amend the wording of these orders, if circumstances require it.
Costs
[90]Costs are awarded to the applicant on a 2B basis, together with disbursements.
Cull J
Solicitors:
Wynn Williams, Christchurch for Applicant Meredith Connell, Auckland for Respondent
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