Longville v New Zealand Transport Agency

[2019] NZHC 1445

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000725

[2019] NZHC 1445

BETWEEN

DESMOND KRIS LONGVILLE

Applicant

AND

NEW ZEALAND TRANSPORT AGENCY

Respondent

Hearing:

13 June 2019

Appearances:

S Khan for Applicant

K V Mills and K M Fitzgibbon for Respondent

Judgment:

24 June 2019

JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie On 24 June 2019 at 4.00 pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Solicitors/counsel:

Fortune Manning, Auckland Meredith Connell, Auckland

LONGVILLE v NEW ZEALAND TRANSPORT AGENCY [2019] NZHC 1445 [24 June 2019]

Introduction

[1]    The applicant, Desmond Longville, is a transport operator. The respondent, the New Zealand Transport Agency (the NZTA), has revoked Mr Longville’s transport service licence, number 18699. It has also declined an application made by DKL Projects Ltd (DKL) – a company with which Mr Longville is associated – for a transport service licence. Both decisions have been appealed to the District Court. They are for call in that Court on 19 July 2019. Mr Longville has also applied for a judicial review of the decision to revoke his transport services licence, but not of the decision declining the grant of a licence to DKL.

[2]    On 26 April 2019, Peters J considered an urgent interim application, made by Mr Longville without notice but on a Pickwick basis. The application sought an order pursuant to s 15(2)(c) of the Judicial Review Procedure Act 2016. Peters J ordered that Mr Longville’s licence was to continue in force pending further order of the Court. She also directed that the NZTA was to refrain from taking any further action to revoke the licence, again pending any further order of the Court. She directed that the matter was to be called in the judicial review list on 2 May 2019.1

[3]    NZTA then filed a notice of opposition to Mr Longville’s application. The matter came before Palmer J on 2 May 2019. He put in place a timetable to set the application down for hearing. He continued the interim relief granted by Peters J, on condition that the transport services licence be operated only by Mr Longville, and not by DKL.2

[4]    Mr Longville is asking the Court to continue the interim order pending final determination of either his application for review, or his appeal against the revocation of his licence in the District Court. The NZTA is opposed to the order sought.

1      Longville v The New Zealand Transport Agency HC Auckland CIV-2019-404-725, minute of 26 April 2019.

2      Minute of 2 May 2019.

Relevant factual background

[5]    A number of affidavits have been filed. What follows is very much a truncated summary of the factual background.

[6]    Mr Longville has held a transport services licence for approximately 30 years. In the late 1990s he became involved in the earth moving and demolition business and he formed a company for this purpose. It got into financial difficulties and it ceased to trade. In around 2013 Mr Longville started afresh trading as DKL. The company carries out demolition and earth moving services for which a transport services licence is required. It does not however hold a licence in its own right. Rather, it has operated under Mr Longville’s licence. Mr Longville now, and rather belatedly, accepts that DKL requires a transport services licence in its own name if it is to operate the transport service itself.

[7]    Mr Longville is the sole director of DKL and he has acted as its general manager. I do not know whether he is also its sole shareholder.

[8]    DKL operates heavy motor vehicles to transport demolition equipment to, and detritus from, construction sites. It operates 12 heavy motor vehicles and has approximately 50 vehicles and items of plant. It is a member of the Auckland Demolition Contractor Panel for Housing New Zealand. It also has a contact with Waste Management Ltd to carry treated solid waste in the Auckland area. In 2018, DKL had revenue in excess of $5.6 million, with a wage bill of some $1.3-$1.6 million. Mr Longville asserts that DKL is a significant contributor to the local economy, and that it had 27 employees.

[9]    Mr Longville says that he was unaware that DKL had to hold a transport services licence in its own name until May 2018. He says that this was only made clear to him after a police officer, who had carried out a roadside inspection of one of DKL’s vehicles, contacted him and explained the position. NZTA, for its part, says that it had previously advised Mr Longville of the relevant licensing requirements, first in 2015, and again in 2016. It has produced copies of the relevant correspondence. Mr Longville seeks to explain this correspondence away. In any event, in May 2018, Mr Longville caused DKL to apply for a transport services licence.

[10]   On 2 July 2018, NZTA gave notice to Mr Longville advising that it proposed to decline DKL’s application and also to revoke Mr Longville’s transport services licence. Mr Longville made detailed submissions in response through his solicitors. Those submissions were not accepted and the notices conveying the decisions referred to in [1] above were served on Mr Longville on 17 April 2019.

[11]   Mr Longville argues that, if he can retain his licence, his operation will no longer be unlawful, because he has changed his operating model. He says he is now the registered owner of all the vehicles which previously belonged to DKL, and that any work requiring a transport services licence is carried out either by him personally, as a sub-contractor to DKL, or by drivers he has hired from DKL. NZTA says that Mr Longville has not provided sufficient evidence to demonstrate that his current business model is being carried out as he asserts. It says that, in the absence of appropriate evidence, the Court cannot be satisfied as to the lawfulness of the arrangements proposed.

Statutory framework/relevant case law

[12]Relevantly, s 15 of the Judicial Review Procedure Act provides as follows:

15 Interim orders

(1)At any time before the final determination of an application, the court may, on the application of a party, make an interim order of the kind specified in subsection (2) if, in its opinion, it is necessary to do so to preserve the position of the applicant.

(2)The interim orders referred to in subsection (1) are interim orders—

(a)prohibiting a respondent from taking any further action that is, or would be, consequential on the exercise of the statutory power:

…

(c)declaring that any licence that has been revoked or suspended in the exercise of the statutory power, … continues and, where necessary, that it be deemed to have continued in force.

[13]   The purpose of s 15 is to give protection on an interim basis to an applicant who may otherwise be unfairly prejudiced by the delays involved in obtaining a final

determination of his or her application for review.3 There must be a “necessity”, as contrasted with a simple desire, to preserve a position.4 It is not appropriate to add any gloss to the word “necessary” or to attempt to define it in other words.5 It is clear from the section that the Court has a wide residual discretion to grant interim relief even if an order is necessary to preserve the position of an applicant.

[14]   A factor which will likely be relevant to the exercise of the discretion will be the availability or otherwise of a right of appeal in respect of the impugned decision.

[15]   Here, s 106 of the Land Transport Act 1988 provides that any person who is dissatisfied with any decision made under the Act by the NZTA in respect of the grant, issue, revocation or suspension of a land transport document sought or held by that person, may appeal to the District Court against that decision. The District Court is given power to confirm, reverse or modify the decision appealed against. Relevantly, s 106(3) provides as follows:

(3)Every decision of the [NZTA] appealed against under this section continues in force pending the determination of the appeal, and no person is excused from complying with any of the provisions of this Act on the ground that any appeal is pending.

[16]   In the present case, and as noted, Mr Longville filed an appeal against the revocation of his licence in the District Court at Auckland on 30 April 2019.

[17]   The effect of s 106(3), was considered by the Court of Appeal in Director of Civil Aviation v Air National Corporate Ltd.6 In that case, the Director of Civil Aviation had suspended an air operator’s certificate held by Air National Corporate Ltd. Air National had appealed the Director’s decision to the District Court and also filed an application for review. It sought interim relief under what was then s 8 of the Judicature Amendment Act 1972 until the review application was determined. Interim relief was granted by the High Court. On appeal the Director accepted that the interim order sought by Air National was necessary to preserve its position. The Court noted

3      Woodhouse v Auckland City Council (1984) 1 PRNZ 6 (HC).

4      Bishop v Central Regional Health Authority HC Palmerston North N47/97, 11 July 1997.

5      Carlton & United Breweries Ltd v Minister of Customs [1986] 1 NZLR 423 (CA).

6      Director of Civil Aviation v Air National Corporate Ltd [2011] NZCA 3, [2011] NZAR 152.

that the relevant statutory provisions and accepted that the High Court had had jurisdiction to make the interim order. The Court stated as follows:

[30] … courts do need to be cautious in this context. As we have said, the effect of statutory provisions such as … 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 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 jurisdiction. At the very least, this will be a relevant consideration to the exercise of the discretion. …

The Court of Appeal was dealing with the matter on an urgent basis, and it expressly noted that this view was only its preliminary view. The Court nevertheless noted that the Director had been required to assess whether, given the information before him, and his knowledge of Air National’s performance, it was necessary in the interests of safety to order suspension of Air National’s licence. The Court did not consider that Air National had demonstrated that it had a strong case that the decision to suspend its licence was not reasonably open to the Director or was irrational. Accordingly, it held that the interim order made under s 8 should not have been granted.

[18]   In Foreman Automotive Ltd v New Zealand Transport Agency,7 Katz J, in summarising the approach to the grant of interim relief in such cases, stated as follows:

[24] In summary, the approach involves two steps. First, the Court must consider whether the statutory threshold is met (that orders are necessary to preserve the position of a party). Secondly, the Court has a wide discretion as to whether the grant of relief is appropriate. The exercise of that discretion will usually involve considering all of the circumstances of the case. In this case the key considerations are the strength of the judicial review claims, the particular statutory context, and the private and public repercussions of granting relief.

…

[53]Parliament has … set where the balance should be struck in “ordinary” cases. Public safety is paramount unless and until the Agency is shown to be wrong. It was to avoid undermining this statutory regime that the Court of Appeal in Air National urged caution in cases such as this. This is a significant factor against the granting of interim relief in this case.

7      Foreman Automotive Ltd v New Zealand Transport Agency [2013] NZHC 1167, [2014] NZAR 260.

[19]   In a more recent decision – McCrostie Trucking Ltd v New Zealand Transport Agency8 – Gendall J accepted that the applicant in that case had an arguable case for judicial review, and that revocation would be likely to cause hardship in the interim. However, the Judge declined to grant interim relief. He stated as follows:

[50]Previous cases make it clear that interim relief of this nature will only be given in exceptional circumstances. Parliament's prohibition on interim relief pending a District Court appeal shows that the NZTA's decisions are to be given great respect by the courts.

[51]I do not consider that the hardship the Company faces as a result of the revocation of its Licence and its chances of success in its judicial review are sufficient to outweigh the risk its continued operation poses to public safety. Therefore, interim relief is not appropriate.

Analysis

(a)Is interim relief necessary to preserve Mr Longville’s position?

[20]   Mr Longville submits that a refusal to grant interim relief would be catastrophic for him, DKL and its employees. He has deposed that DKL would likely fail before the substantive judicial review proceedings and the District Court appeals could be heard.

[21]   NZTA accepts that revocation of Mr Longville’s licence will have an impact on DKL’s functioning. It acknowledges that there is a potential loss of employment to DKL’s employees. It also acknowledges Mr Longville’s evidence that various personal guarantees he has given o DKL’s performance will likely be called up. It nevertheless argues that the impact will not be as severe as Mr Longville asserts.

[22]   Having considered the available evidence, I accept that an interim order is necessary to preserve Mr Longville’s position. The evidence is that Mr Longville and DKL are inextricably intertwined. For that reason, I consider DKL’s position as well, even though it is not the applicant seeking judicial review. DKL has already had to terminate the employment of five of its drivers as a result of the uncertainty surrounding the business’s future. I accept that if the interim orders are not continued, DKL will have to terminate the employment of most of its other employees, because

8      McCrostie Trucking Ltd v New Zealand Transport Agency [2018] NZHC 2736.

its road transport business will have to come to an end. The evidence is that the road transport business is critical to the survival of DKL, and that the use of subcontractors to carry out the transport work would make the business unprofitable and put DKL’s various contracts at risk. Mr Longville has given personal guarantees to support DKL’s various financial obligations. He has deposed that he cannot personally meet the obligations of DKL pending a final decision either on appeal or review.

(b)The discretion – is the grant of interim relief appropriate?

[23]   Mr Khan, appearing on behalf of Mr Longville, referred to NZTA’s decision. He argued that it is based on Mr Longville’s traffic infringement and fines history. He submitted that there is no allegation that Mr Longville has failed to maintain his or DKL’s vehicles to a safe standard. He noted that there are no issues raised with log books, or the working times of drivers, and that there have been no serious accidents involving drivers engaged by Mr Longville or DKL. He submitted that the risk to public safety is minimal. He referred to the timeframe – noting that Mr Longville made application for a transport services licence for DKL in May 2018, that the application was only advanced on 2 July 2018, and that the final decision was not made until 17 April 2019. He noted the delay, and argued that if public safety was of paramount concern, the NZTA would have moved rather more quickly.

[24]   Ms Mills, for the NZTA, pointed to s 30C of the Act, which requires it, when determining whether someone is a fit and proper person to hold a transport services licence, to have regard to any offending by the person in respect of transport related matters, including any infringement notices. She did not accept that Mr Longville’s (and DKL’s) convictions for speeding, and for operating vehicles not up to inspection standard, does not impact on public safety. She argued that it cannot be a requirement that the NZTA must wait for a serious accident or injury to incur before it can take compliance action.

[25]I have considered the application for review. Mr Longville pleads:

(a)that NZTA took into account irrelevant considerations, and that it improperly elevated public safety concerns beyond the actual risk posed by the offences committed;

(b)that the NZTA failed to properly engage with him prior to taking action to revoke his licence, and that it breached its own prosecution policy and the requirements of natural justice;

(c)that NZTA’s decision to revoke his licence was a disproportionate response to the matters relied on by NZTA, and unreasonable in all the circumstances; and

(d)that NZTA relied on an incorrect interpretation of “the chain of responsibility provisions” said to be contained in the Land Transport Act, and that NZTA’s approach to the public safety risk was an error of law.

[26]   NZTA takes issue with each of these various grounds of review, although it is yet to file a statement of defence to the statement of claim.

[27]   I am not persuaded that the application for review is entirely without merit. To my mind, some of the grounds advanced are arguable. While Mr Longville does have some 60 traffic infringements, they cover the period 1986-2018. Many are historical, although some are much more recent. Issues of manifest unreasonableness may arise.

[28]   That Mr Longville has also appealed the decision to revoke his licence is not fatal to his application for relief. The fact that an appeal on the merits is available does not necessarily preclude an application for review in appropriate cases, although it has to be acknowledged that the availability of an appeal may well be a relevant factor in the exercise of the discretion whether or not to grant relief if one or other of the grounds of review can be made out.9

[29]   The matter of most concern is public safety. I accept the submissions made by Ms Mills that it was incumbent on the NZTA to consider Mr Longville’s history of offending in respect of transport related matters. I also accept that infringement notices for speeding, for not having evidence of inspections of vehicles, and for vehicles not being up to certificate of fitness standard, impact on public safety. It is

9      RL v The Chief Executive of the Ministry of Social Development [2009] NZCA 596 at [21].

however also relevant that NZTA maintains (or at least until recently has maintained) an operator rating system, and that Mr Longville’s most recent operator rating was four stars, which indicates a good level of compliance. Mr Longville’s overall score on the operator rating system issued by NZTA in July 2018 was 1.9680. The score for a four star rating is between 0.50000 and 2.1041. In the period that the operator rating system information covers, Mr Longville achieved an 85 per cent pass rate for all certificate of fitness inspections. While NZTA has more recently stated that the operator rating system should not be relied on as a measure of safety and compliance, and that in some cases, a rating score may not accurately reflect the operator’s safety and compliance, in my judgment, the fact that Mr Longville has recently achieved a good level of compliance assists him. So also do the various steps that he and DKL’s manager, Kenneth Gardiner, depose have recently been taken to improve safety concerns.

[30]   The delay in revoking Mr Longville’s licence by NZTA also tells in favour of granting interim relief. It suggests that public safety concerns are not as urgent as might otherwise be thought.

[31]   Further, in my view, NZTA’s public safety concerns can be met by a series of conditions attaching to the grant of any interim relief. If those conditions are breached, it will be open to the NZTA to apply for a review of the interim orders.

[32]   I accept that the NZTA has concerns about Mr Longville’s present operations. It does not accept that Mr Longville is currently complying with the Act, and it argues that his current operation is still unlawful. In the course of discussions, Ms Mills however properly accepted that I could not be expected to rule on that issue given the limited and conflicting materials before me. She also accepted that it is open to the NZTA to audit Mr Longville’s operation under s 198 of the Act. Any person to whom a requirement notice is given under that section must comply with it, and if the NZTA still considers that there is a breach of the Act, it can if necessary prosecute.

[33]   In summary, I am satisfied, albeit by a fine margin, that it is appropriate to direct that the interim order put in place by Peters J and amended by Palmer J remains in place pending the final determination of either the application for review or

Mr Longville’s appeal against the revocation of his licence to the District Court. It is however also appropriate to impose conditions, in the interests of public safety and reasonable expedition. Nothing in these conditions should be read as an indication that Mr Longville’s operation of his transport licence to conduct the business of DKL is lawful. The conditions are as follows:

(a)Mr Longville must notify the NZTA within 24 hours of any traffic infringements, offences or convictions incurred, including those received personally, and those received by DKL. This disclosure must be made irrespective of whether Mr Longville/DKL intends to apply to transfer the infringements from DKL/Mr Longville to the driver personally. Notification must be made by email to [email protected].

(b)Using GPS units  (such  as  those  referred  to  at  paragraph  19  of  Mr Longville’s affidavit of 8 May 2019), Mr Longville must monitor the speed of all drivers to ensure compliance with road safety rules, and report to the NZTA within 24 hours any instances of drivers exceeding the maximum speed limit. Notification must be made by email to [email protected]. Details of the GPS system being used to monitor drivers must be provided to the NZTA within three working days of this order being made by email to [email protected].

(c)Mr Longville must develop and implement within 21 working days a training  course  for  all  drivers  employed  by  or  contracting  for  Mr Longville personally, or DKL. This training must cover the importance of driving at a safe speed, and vehicle maintenance, including the importance of up to date certification. Mr Longville must provide full details of this training to the NZTA as soon as is practicable and in any event no later than 21 working days after this order.

(d)Mr Longville must provide the NZTA, within three working days, with a copy of Mr Longville’s and DKL’s existing procedures for speed and disciplinary measures for traffic offending. Mr Longville must also provide the NZTA with details of any future planned procedures in

these  areas.     These documents should be provided by email to [email protected].

(e)Mr Longville must provide the NZTA, within three working days, with a list of the full names and driver licence number of all drivers employed by or contracting for Mr Longville or DKL. Mr Longville must update the NZTA of any changes to this list within 24 hours. The list and any changes to the list should be provided by email to [email protected].

(f)Mr Longville is to take all reasonable steps, and cooperate with the NZTA, in preparing for a hearing of the application for review, and he is to accept the first available fixture date that shall be given to him for that application.

(g)Leave is reserved to the NZTA to bring this matter back before the Court on three working days’ notice if there is any breach of these conditions.

[34]   I direct that the application for review is to be placed in the Judicial Review List, for call, at the first reasonably available opportunity, following release of this judgment.

Wylie J