Map Transport Limited v Director of Land Transport

[2024] NZHC 2253

IN THE HIGH COURT OF NEW ZEALAND [NAME OF REGISTRY] REGISTRY

I TE KŌTI MATUA O AOTEAROA

[TE REO TRANSLATION OF LOCATION] ROHE

CIV-2023-404-3114

[2024] NZHC 2253

UNDER

the Judicial Review Procedure Act 2016

IN THE MATTER

of a decision made pursuant to the Land Transport Act 1998

BETWEEN

MAP TRANSPORT LIMITED

First Applicant

ADWIN JACOB CHANDRA
Second Applicant

AND

THE DIRECTOR OF LAND TRANSPORT

Respondent

Hearing:	22 July 2024
Appearances:	S Khan and M Orange for the Applicants J Papps and D Keogh for the Respondent
Judgment:	12 August 2024

JUDGMENT OF GORDON J

This judgment was delivered by me on 12 August 2024 at 3 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:

Fortune Manning, Auckland Chapman Tripp, Wellington

MAP TRANSPORT LTD v DIRECTOR OF LAND TRANSPORT [2024] NZHC 2253 [12 August 2024]

[1]                This is an application for judicial review of decisions of the respondent, the Director of Land Transport (Director).

[2]                The first applicant is MAP Transport Ltd (MAP), the operator of a trucking business, and the second applicant is the sole director and shareholder of MAP, Adwin Chandra. In order to operate its trucking business of transporting shipping containers, MAP needs to hold a transport (goods) service licence (TSL). The Director, who is the nominal head of the NZ Transport Agency Waka Kotahi (NZTA), is the person who issues and who can revoke TSLs.

[3]                On 21 December 2023 the Director issued a decision revoking MAP’s TSL (revocation decision) and a second decision disqualifying Mr Chandra from holding a TSL for a period of five years or being in control of a transport service for a period of five years (disqualification decision) (together the decisions).

[4]                At the same time as they filed their statement of claim on 22 December 2023 the applicants applied on a without notice basis for interim orders in order to prevent MAP from going out of business before this application for judicial review could be heard.

[5]                An interim order, prohibiting the Director from taking any action consequential on the decisions and a further interim order deeming the TSL to continue in force, were made.

[6]                On 7 March 2024 those orders were continued by consent on the basis of a detailed set of conditions until the decision on this application for judicial review.

[7]                MAP and Mr Chandra have also appealed the decisions to the District Court.1 The hearing of those appeals was to take place two days after the hearing of the application for judicial review.

1      Land Transport Act 1998 [LTA], s 106 provides for a general right of appeal to the District Court from the decisions.

Background

[8]                MAP was incorporated on 1 May 2023 after Mr Chandra decided to establish a transport business. Mr Chandra had no prior experience in the road transport industry.

[9]                Shortly after incorporation MAP applied for a TSL. Since it had been recently incorporated and had not previously operated a goods service, MAP had no record of offending. NZTA staff did not  identify  any  adverse  information  about  MAP or Mr Chandra.2 The Director therefore granted MAP’s TSL on 15 June 2023. Pursuant to that licence MAP operates approximately 10 truck and trailer units (being approximately 20 individual units) in Auckland and Christchurch.

[10]            On 20 September 2023, Jeanette Lawson, a Senior Compliance Officer, Safer Commercial Transport – Upper North Island, Regulatory Services at NZTA issued MAP with a Notice of Audit (notice).3 The notice listed 18 items to be provided for the time period between 4 and 17 September 2023. The notice also said that MAP would be advised of the details of when its vehicles needed to be presented for inspection.

[11]            Geoffrey Burrows, the Manager Compliance – Safer Commercial Transport, Upper North Island at NZTA and who holds a delegation from the Director to make the decisions sought to be reviewed, says there were two reasons for issuing the notice. First, there was an apparent connection between Mr Chandra and Monish Prasad, a director of Clover Transport Ltd. Mr Burrows said NZTA had revoked Clover Transport’s TSL and NZTA was investigating Clover Transport and associated operations. Mr Khan, counsel for MAP and Mr Chandra, explained that Mr Chandra was using some of Clover Transport’s vehicles and drivers in its operation.

[12]            Mr Burrows says the second reason for issuing the notice was that NZTA staff were concerned about the number of traffic offences that vehicles registered to MAP had incurred in the brief time during which it had been carrying on its goods service:

2      Mr Chandra had only one traffic offence in the previous five years which was not in a commercial vehicle.

3      Pursuant to LTA, s 198.

between 11 August 2023 and 12 September 2023 there was a total of 20 traffic offences.

[13]            Mr Burrows says following the framework of risk-based assessments, staff in the Safer Commercial Transport team decided to audit MAP’s goods service to ascertain its safety and compliance standards. The s 198 audit process then followed: Mr Chandra emailed some records to Ms Lawson on 2 October 2023; on 11 October 2023 NZTA staff interviewed Mr Chandra and MAP’s  Transport  Manager,  Rajnesh Prasad; on 12 October 2023 Ms Lawson emailed Mr Chandra noting the information that had been supplied and the further information needed by 15 October 2023 in relation to each of the 18 categories in the notice; and on 24 October 2023 NZTA staff had a follow-up interview with Mr Chandra and Mr Prasad.

[14]            As part of the s 198 audit process, after the notice was issued, NZTA staff advised MAP to make its vehicles available for inspection on 4 October 2023 at the New Zealand Police’s Commercial Vehicle Safety Team site in Stanley Street, Auckland. Of the 21 heavy motor vehicles (including both trucks and trailers) registered in MAP’s name, MAP presented only 12 vehicles at the 4 October 2023 inspection. Of those vehicles, two were “green-stickered” (a trailer had a chassis cross-member cracked in two places and a truck had a brake defect on its rear axle).4

[15]            A further five vehicles had faults which would have failed Certificate of Fitness (CoF) inspections; three vehicles had minor faults that would have passed CoF inspections and there were two vehicles with no faults. Only one of six drivers could show NZTA staff their completed walk-around check sheet. Mr Burrows explains that NZTA expects that before operating a heavy motor vehicle on the road, the driver will carry out what is essentially a walk-around or pre-drive inspection to check the vehicle for any defects that can be identified during the visual walkaround of the vehicle and its load. If a check sheet is not completed before a vehicle is driven on the road for the day, there will be no accurate record confirming the current condition of that vehicle.

4      A green sticker is issued when the enforcement officer inspecting the vehicle considers the vehicle to be defective or not in compliance with the Land Transport Act. The vehicle is immediately placed out of service.

[16]            On 8 November 2023 the Director5 issued a notice of proposal (proposal) to MAP to revoke its TSL and a proposal to Mr Chandra to disqualify him from being the holder of a TSL and being in control of a transport service licence for a period of five years. The reasons for the proposal in summary were: incomplete response to the notice; failure to manage work time and logbooks as well as fatigue among drivers; Road User Charges (RUC) debt; the number of infringement notices; and lack of processes and procedures to manage the safety for drivers and vehicles.

[17]            I set out the reasons in the proposal in full, as it was those reasons that were ultimately adopted by the Director in the decisions. There were seven reasons set out in the proposal to both MAP and Mr Chandra as follows:

1Not supplying all information we requested in our notice pursuant to section 198 of the land transport act before 02/10/2023. The records that you did provide were either insufficient or not in full for us to review your operation sufficiently.

2Failed to manage work time and logbooks as well as fatigue. The checks conducted on the logbook records and the GPS data disclosed significant breaches of work time, rest time and logbook requirements this included exceeding the 5 ½ hours continuous work time, failing to take the required 10-hour rest break between shifts, providing a false and misleading information in a logbook, and logbook omissions for failing to complete the logbook correctly.

3Map Transport Limited has been issued 2 Road User Charges (RUC) assessments where vehicles operating under your TSL were found to have exceeded the maximum distance on the RUC licence. Based on these assessments you owe Waka Kotahi a total of $23,944.90 in unpaid RUC. Attempts by Waka Kotahi to facilitate repayment have been unsuccessful and late penalties have been applied.

4In the last 4 months vehicles operating under your TSL have been issued a total of 31 infringement offence notices by Police. Of those, 16 are for offences relating to RUC non-compliance.

5Vehicles operating under your TSL are routinely found to be operating with overrun RUC by Police.

6Failed to supply evidence to show the company has processes and procedures in place to manage the safety for drivers and vehicles.

7Waka Kotahi have made reasonable attempts to engage with you, to provide the requested records and bring your RUC overruns up to date. You have been given ample opportunity to engage with us to resolve these issues. Promises of providing required records are

5      Mr Burrows acting as an authorised delegate of the Director.

rarely kept and attempts to resolve these issues has been avoided by you.

[18]            The proposal also identified steps to be taken to avoid the TSL being revoked6 and referred to the right to make submissions in response.7

[19]            MAP and Mr Chandra took up that opportunity by way of a 21 page letter and attachments from their solicitors, Fortune Manning, dated 15 December 2023 (Fortune Manning letter).

[20]            On 21 December 2023 the Director gave notice of his final determination to revoke the TSL issued in the name of MAP on the grounds that the holder of the TSL was not a fit and proper person. The letter containing the revocation decision stated:

Section 30S(1)(a) of the Act provides that the Director may revoke a Transport Service Licence if satisfied that the holder of the licence is not a fit and proper person to hold that Transport Service Licence.

I am satisfied that the company is the holder of the TSL for the purposes of   s 30S(1)(a) of the Act and that Adwin Jacob Chandra is not a fit and proper person to be the holder of a Transport Service Licence.

Section 30S(1)(b) of the Act provides that NZTA may revoke a Transport Service Licence if satisfied that a person who has control of the transport service is not a fit and proper person to have control of the service.

I am satisfied that you are a person who has control of the transport service and that you are not a fit and proper person to have control of the service.

My reasons are the same as set out in the ‘Notice of Proposal to Revoke Transport Service Licence’ (notice of proposal) dated 08/11/2023.

[21]            The revocation decision also set out the Director’s responses to what the Director considered were the key points in the Fortune Manning letter. Those key points were addressed under the following headings:

(a)failing to provide all information requested in the s 198 notice;

(b)work time and logbooks – managing fatigue;

6      LTA, s 30T.

7      LTA, s 30W.

(c)vehicle safety (covering the October 2023 vehicle inspections and CoF inspections);

(d)traffic offences;

(e)RUC (outstanding amounts);

(f)RUC (routinely overrunning);

(g)MAP’s proposed implementation of procedure to monitor RUC;

(h)methods of management (safety and best practice).

[22]            The revocation decision stated that given the extent of the submissions made in the Fortune Manning letter, the Director had not responded to every point made but this did not mean that all points had not been taken into consideration. The Director further stated that the submission had not convinced him to alter his proposal and he remained of the view that MAP was not a fit and proper person to hold a TSL. The revocation was to take immediate effect. Finally, the letter advised of the right of appeal and the relevant statutory provisions in that regard.

[23]            The disqualification decision in relation to Mr Chandra was also contained in a letter from Mr Burrows dated 21 December 2023. The disqualification decision was that Mr Chandra was disqualified and prohibited from being the holder of a transport service licence for a period of five years and from being a person in control of a transport service for a period of five years. The disqualification decision continued:

Section 87B of the Act provides that Waka Kotahi may disqualify, for a period not exceeding 10 years, the holder of the transport service licence, or any other person who was in control of the transport service and whose fitness and propriety was the basis of, or contributed to, a decision to revoke the transport service licence, from—

(a)Holding or obtaining a transport service licence.

(b)Having any form of control of a transport service.

I am satisfied that you are a person in control of Map Transport Limited, being the holder of transport service licence 0332817 whose fitness and propriety

was the basis of a decision to revoke the transport service licence under s 30S of the Act.

My reasons are the same as set out in the 'Notice of Proposal to Disqualify and Prohibit you from holding a transport service licence, and to Disqualify and Prohibit you from being a person in control of a transport service (notice of proposal) dated 08/11/2023.

[24]            The decision in relation to Mr Chandra similarly responded to matters raised in the Fortune Manning letter.

Statutory framework

[25]            The scope of the Director’s decision-making powers, and thus reviewability, including revoking Land Transport documents (which include TSLs and disqualification of persons from being in control of a transport service) is governed by the statutory framework in the Land Transport Act 1998 (LTA).

1. Two of the statutory objectives in the long title to the LTA are:

(a)to promote safe road user behaviour and vehicle safety; and

(b)to provide for a system of rules governing road user behaviour, the licensing of drivers, and technical aspects of land transport, and to recognise reciprocal obligations of persons involved; …

[27]            The purpose of the Land Transport Management Act 2003 is also relevant. Its purpose is to “contribute to an effective, efficient, and safe land transport system in the public interest”.8

[28]            The test of a “fit and proper person” is the controlling mechanism in the goods services context.9 Section 30L of the LTA applies to the grant of a TSL. It relevantly provides:

30L     Grant of licence

(1)After considering an application for a transport service licence, the Director may grant the licence only if the Director is satisfied that—

8      Land Transport Management Act 2003, s 3.

9      A person must hold a goods services licence (which is one type of transport service licence) to carry on a goods service.

(a)the applicant is a fit and proper person to hold a transport service licence; and

(b)any person who is to have, or is likely to have, control of the transport service is a fit and proper person to have such control; …

[29]            Section 30S sets out the circumstances when the Director may revoke a TSL. It provides in relevant part:

30S     When Director may revoke transport service licence

(1)The Director may revoke a transport service licence if the Director is satisfied that—

(a)the holder of the transport service licence is not a fit and proper person to be the holder of a transport service licence; or

(b)any person who has control of the transport service is not a fit and proper person to have control of the service; …

[30]            If the Director revokes a TSL the Director may disqualify for a period not exceeding 10 years any person who was in control of the transport service and whose fitness and propriety was the basis of, or contributed to, a decision to revoke the transport licence.10

[31]            The Director has a broad discretion in making the “fit and proper person” assessment. First, there are mandatory relevant considerations which are subjectively framed in s 30C(1), and also further mandatory relevant considerations in s 30F which are specific to goods services.

[32]Section 30C(1) provides:

30C     General safety criteria

(1)When assessing whether or not a person is a fit and proper person in relation to any transport service, the Director must consider, in particular, any matter that the Director considers should be taken into account—

(a)in the interests of public safety; or

10     LTA, s 87B.

(b)to ensure that the public is protected from serious or organised criminal activity.

[33]            Section 30F contains the additional mandatory criteria for a goods service as follows:

30F     Additional criteria for goods service

Without in any way limiting the matters that the Director may have regard to under section 30C(2), when the Director is assessing whether or not a person is a fit and proper person in relation to any goods service, the Director must consider, in particular,—

(a)any criminal activity conducted in the course of any transport service or transport-related business or employment:

(b)any offending in respect of major transport-related offences, particularly offences relating to safety or to road user charges.

[34]            Next, as far as the Director’s broad discretion there are permissive relevant considerations. Section 30C(2)–(4) provide:

(2)For the purpose of determining whether or not a person is a fit and proper person for any of the purposes of this Part, the Director may consider, and may give any relative weight that the Director thinks fit having regard to the degree and nature of the person’s involvement in any transport service, to the following matters:

(a)the person’s criminal history (if any):

(b)any offending by the person in respect of transport-related offences (including any infringement offences):

(c)any history of serious behavioural problems:

(d)any complaints made in relation to any transport service provided or operated by the person or in which the person is involved, particularly complaints made by users of the service:

(e)any history of persistent failure to pay fines incurred by the person in respect of transport-related offences:

(f)any other matter that the Director considers it is appropriate in the public interest to take into account.

(3)In determining whether or not a person is a fit and proper person for any of the purposes of this Part, the Director may consider—

(a)any conviction for an offence, whether or not—

(i)the conviction was in a New Zealand court; or

(ii)the offence was committed before the commencement of this Part or corresponding former enactment; or

(iii)the person incurred demerit points under this Act or a corresponding former enactment in respect of the conviction; and

(b)the fact that the person has been charged with any offence that is of such a nature that the public interest would seem to require that a person convicted of committing such an offence not be considered to be fit and proper for the purposes of this section.

(4)Despite subsection (3), the Director may take into account any other matters and evidence as the Director considers relevant.

[35]            In particular, I note s 30C(2)(f): any other matter that the Director considers it is appropriate in the public interest to take into account; and s 30C(4): that the Director may take into account any other matters and evidence as the Director considers relevant.

[36]            The LTA does not expressly or impliedly prescribe irrelevant considerations. Accordingly, and having regard to the broad discretion apparent in the above provisions, the only irrelevant considerations would be unreasonable considerations of the “red-haired teacher” type.11

[37]            The LTA also provides for the primary responsibilities of holders of transport service licences.12 Section 30A(1) provides:

30A     Requirements for vehicles

(1)A holder of a transport service licence must ensure that—

(a)every vehicle to be used in the service is maintained in a fit and proper condition and that the requirements of any legislation (including bylaws) made for this purpose are met:

(b)no vehicle is used in the service unless and until all fees payable in respect of the vehicle and the service under any legislation (including bylaws) have been duly paid or appropriate arrangements have been made for payment.

11     Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, [1947] 2 All ER 680 (CA) at 229.

12     LTA, Part 4A, subpart 1.

[38]            The Act also contemplates a person in control of a transport service. “Control” is defined in s 2 of the LTA as follows:

control, in relation to a transport service, means direct or indirect control of the management of the whole or part of the transport service by a shareholding or the holding of any position (however described) in the management of the whole or part of the transport service that gives the person a significant influence on the operation of the whole or part of the service (whether or not other persons are also involved)

[39]Relatedly, in Stan Semenoff Logging Ltd v New Zealand Transport Agency

Whata J referred to “systemic failure” as follows:13

I agree with [counsel for the NZTA] that the purpose and scheme of the LTA envisage a broad inquiry at s 30S (supplemented by s 30C) into the fitness of Persons in Control of transport services. This inquiry is not limited to personal acts of non-compliance or offending. Section 30C(2)(f) and (4) make it clear that other factors may be relevant to the assessment of fitness. I also agree that what might be called systemic failure over a lengthy period to comply with road regulations, including the Rules could be a ground for finding that a person in control of the transport service is not a fit and or proper person to control that service. …

[40]            Finally, there is a prescribed statutory process in Part 4A, subpart 5 in relation to adverse decisions. The Director is required to notify a proposal to make an adverse decision,14 there is a procedure for consideration of information,15 and a procedure for the Director to make and notify his determination.16

Grounds for review

[41]            The statement of claim contains two grounds of review. The first is headed “Improper Purpose and Errors of Law”. The applicants plead:

42.The Director has based the Revocation Decision and Disqualification Decision on a number of errors of law, namely:

42.1The Director’s failure to give appropriate weight to the criteria under sections 30C and 30F of the Act that applied in favour of MAP Transport and Mr Chandra;

13     Stan Semenoff Logging Ltd v New Zealand Transport Agency [2019] NZHC 1133 at [32].

14     Section 30W.

15     Section 30X.

16     Section 30Y.

42.2The Director’s failure to consider and give effect to the judgments of the High Court of New Zealand pleaded at paragraph 16 herein;

42.3The Director’s use of revocation as a punitive measure for non-compliance with NZTA’s audit and for non-payment of RUC;

42.4The Director’s use of the revocation process when there were no issues of public safety.

42.5A RUC debt is a civil debt and the revocation process under the Land Transport Act should not be used for debt recovery purposes by the NZTA.

42.6There is a prescribed penalty for non-compliance with an NZTA audit, being a fine not exceeding $5,000, and the Revocation Decision and Disqualification Decision were not punitive measures available to the Director in response to non-compliance with the audit.

[42]            The second ground is headed “Proportionality/Unreasonableness”. The applicants plead:

43.The Revocation Decision and Disqualification Decision are a disproportionate response to the matters relied on by the Director.

44.The Director failed to take into account, or has given inadequate weight to the following matters:

44.1Nearly all of the factors that the Director is required to consider under section 30C and 30F of the Act apply in favour of MAP Transport and Mr Chandra;

44.2All of the specific concerns raised by the Director in the Notice of Proposal were addressed in the Submissions; and

44.3No complaints have ever been laid against MAP Transport or Mr Chandra.

45.The Director has instead based its decision on an irrelevant consideration, or has given undue weight to an irrelevant consideration, being that MAP Transport did not fully comply with the audit and has not repaid all of its RUC debt.

46.The Revocation Decision and Disqualification Decision is unreasonable in all the circumstances.

[43]            The relief sought for each ground includes a declaration that the revocation decision and disqualification decision are invalid and of no legal effect and an order is sought quashing both decisions.

[44]            In oral submissions Mr Khan, counsel for the applicants, also submitted that an appropriate course might be to send the matter back to the Director with appropriate directions for him to make his decisions again.

Director’s position

[45]The Director, in opposition, says in summary:

(a)He made his decisions in accordance with the broad statutory discretion conferred upon him by the LTA. The alleged errors of law in the Director’s decisions pleaded by MAP are not established.

(b)His decisions were reasonable and proportionate in the circumstances. MAP’s attempt to judicially review his decisions on the grounds of unreasonableness and disproportionality are, in substance, an invitation to this Court to review his decisions on the merits.

(c)In any event, even if MAP makes out a reviewable error in his decisions, this Court should exercise its discretion to decline on the (orthodox) ground that MAP has, and has exercised, another remedy, namely an appeal to the District Court.

[46]            I will address each ground in turn and the individual alleged errors one by one. Having said that, it will be convenient to address some of the errors together.

First ground – improper purpose and errors of law

Alleged failure to give weight to statutory criteria and give effect to case law

[47]           It is convenient to address the first two alleged errors of law together because, in submitting that the Director failed to give appropriate weight to the criteria in ss 30C and 30F of the LTA that he says applied in favour of MAP and Mr Chandra, Mr Khan relies on the judgment of Cull J in  Abraham v New Zealand Transport Agency.17    Mr Khan refers to Abraham and a further judgment of Cull J in Boss Transport Ltd v

17     Abraham v New Zealand Transport Agency [2017] NZHC 1483.

New Zealand Transport Agency18 in support of the alleged error that the Director failed to consider and give effect to judgments of this Court.

[48]The applicants plead that Abraham stands for three propositions:

(a)the Director must give appropriate weight to the statutory criteria for fitness and propriety that do not apply, or which apply in the subject person’s favour;

(b)a lack of complaint made against a transport operator can countenance19 the public safety concerns held by the Director; and

(c)the Director must not elevate public safety considerations beyond what is required to satisfy the Director of a person’s fitness and propriety in accordance with the statutory test.

[49]            The above propositions and their claimed application to this case need to be assessed having regard to the particular factual context of Abraham. That case was an appeal to the High Court on a question of law from a decision of a District Court Judge upholding a decision by NZTA not to renew Mr Abraham’s driving instructor “I” endorsement on his driver licence. Justice Cull held that:20

… in undertaking his assessment of the fit and proper person criteria under ss 30C and 30D of the Act, the Judge has misdirected himself in law. He has overlooked relevant matters and taken into account irrelevant matters and in so doing, has made errors of law.

[50]            The relevant aspects of the factual context in Abraham are first that the Judge had held that speeding infringements had been inappropriately elevated to the level of serious public safety offences, and the absence of other factors indicating a public safety risk such as serious behavioural problems or complaints had not been taken into account or given sufficient weight.

18     Boss Transport Ltd v New Zealand Transport Agency [2019] NZHC 522, [2019] NZAR 600.

19     The Court questions whether this might be a typographical error and that the word intended was “counterbalance”.

20     Abraham v New Zealand Transport Agency, above n 17, at [82].

[51]            I agree with the submission made by Mr Papps, counsel for the Director, that this finding reflected that in the specific context of a passenger service such as a taxi driver licence or instructor endorsement, the protection of the public from any serious behavioural problems by the person holding the licence was a “paramount consideration”.21 In that context the Judge held that it was inappropriate to elevate transport-related infringement offences over behavioural considerations.

[52]            However, given the range of contexts across which the “fit and proper person” test will be applied, the matters that assume importance will vary with context. Abraham makes clear that public safety is the overarching consideration in assessing an individual’s fitness and propriety.22 But I also accept Mr Papps’ submission that in the goods services context the primary responsibilities of holders of TSLs provided for in s 30A(1) also assume significance.

[53]            I also consider the risks to public safety posed by the operation of a goods service such as MAP are different in nature from those posed by the operation of a passenger service such as in Abraham. Heavy vehicles used by goods service operators, if not kept in proper condition and operated safely and in compliance with land transport rules, pose a heightened risk of serious harm to other road users.

[54]            For that reason, and here I accept Mr Papps’ further submission, in the goods services context, matters such as transport-related offending, or work time and vehicle safety compliance, assume greater significance in assessing the “overarching consideration” of public safety. I consider concerns in relation to those matters are not mitigated or counterbalanced by the absence of any serious behavioural problems or complaints (matters set out in s 30C(2)). The lack of relevance of complaint in the goods services context is apparent from the fact that a goods service operator, unlike a small passenger service operator, is not required to keep a complaints register.23

[55]            For the above reasons I do not consider Abraham should be understood as requiring the Director to treat the absence of negative factors as carrying a positive

21     Abraham v New Zealand Transport Agency, above n 17, at [55] and [64].

22 At [62].

23     Land Transport Rule: Operator Licensing 2017, cl 3.3 imposes a requirement on a small passenger service operator to maintain a record of complaints.

weighting in the fit and proper person assessment. That is particularly so where the negative factors are not relevant to the particular kind of service being assessed.

[56]            Finally, the text of ss 30C(1)(a) and 30F is central to making a decision on the mandatory relevant considerations. The Director is required to consider, in particular, any matter the Director considers should be taken into account in the interests of public safety (s 30C(1)) and certain specified offending (s 30F). There is no requirement to take into account the absence of such matters as offending or complaints.

[57]            Turning to the Boss Transport case, the Director does not take issue with the statement that:24

… 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.

[58]            The Director’s assessment was that MAP’s non-compliance was sufficiently serious to warrant revocation (MAP) and disqualification (Mr Chandra). It is not for this Court to evaluate the merit of the Director’s assessment under the ground of alleged error of law. But I will return to this point under the second ground of review alleging unreasonableness.

[59]            In summary, the Director did not err as alleged in the first two claimed errors of law.

Use of revocation as a punitive measure for non-compliance with NZTA’s audit and for non-payment of RUC

[60]            I will address this alleged error of law in two parts: first in relation to the s 198 audit and then non-payment of RUC.

Non-compliance with s 198 audit

[61]            The applicants claim that it was an error of law for the Director to take into account its non-compliance with the September 2023 s 198 audit. Mr Khan submits

24     Boss Transport Ltd v New Zealand Transport Agency, above n 18, at [71] (footnote omitted).

that is because a failure to comply with a requirement under s 198 of the LTA, without reasonable excuse, is an offence with a maximum penalty of a fine not exceeding

$5,000.25    Mr Khan submits that MAP has not been found guilty of any charge in

relation to the s 198 audit and in fact has not even been charged. Mr Khan submits that the Director has revoked the TSL on the basis of “alleged and unproven non-compliance”.

[62]            In making this submission Mr Khan conflates criminal liability for failure to comply with a s 198 audit and the relevance of such a failure to the fit and proper person assessment. I do not consider there is any reason why, where there is a prescription for an offence and penalty for non-compliance, that should preclude the Director from taking that non-compliance into account when making his fit and proper person assessment provided there is a basis for the Director to conclude there is a failure to comply with an audit.

[63]            The Director issues a s 198 audit notice in the interests of land transport safety. In carrying out his role, which includes monitoring, investigating, managing and enforcing compliance in relation to matters under land transport legislation,26 the Director assesses both any risk to land transport safety by non-compliance and also potentially whether a person continues to be a fit and proper person to hold a TSL.

[64]            The s 198 audit procedure is the primary way the Director can get information from the regulated party to make his assessment. In circumstances where a regulated party does not comply with a s 198 notice, that impacts the Director’s ability to assess the party’s regulatory compliance. I accept that can impact on the fit and proper assessment.

[65]            In his affidavit Mr  Chandra  set  out  attempts  to  respond  to  each  of  the 18 categories in the notice and Mr Khan makes submissions on the basis of that evidence. Mr Burrows addresses each of the categories in his evidence and explains why he considered MAP had not satisfactorily responded to the information requests.

25     LTA, s 51.

26     Land Transport Management Act 2003, s 104B(2)(c).

The Court is not in a position to resolve those differences. But neither is it necessary to do so as discussed below.

[66]            One of the submissions  Mr  Khan  makes  is  that  the  Director  (through  Ms Lawson) had requested information that was already in the possession of the Director, for example, information about traffic offending. Mr Chandra said he had not retained the infringement notices for example.

[67]            Mr Burrows says in his affidavit that that criticism by the applicants misses the point. He says he was concerned that Mr Chandra, as the person in control of MAP’s goods service, was seemingly unaware of the level of traffic offending that was occurring in MAP’s vehicles and this was apparently not coming to Mr Chandra’s attention. Mr Burrows’ view is that as the person in control “Mr Chandra should be fully across whatever traffic offending is occurring in MAP Transport’s vehicles”.

[68]            Another criticism Mr Khan makes is that Mr Chandra had explained in his affidavit that he had not been able to supply vehicle maintenance and servicing records because MAP had not been retaining those records. Mr Khan submits Mr Chandra could not supply that which he did not have.

[69]            Even if MAP would have been able to avoid criminal liability for the failure to comply with a s 198 audit in relation to this category of documents, I accept the Director is entitled to take into account the fact that MAP had not retained those records. I accept Mr Papps’ submission that this particular omission is relevant because it tends to show that Mr Chandra, the person in control of MAP, did not have full visibility over MAP’s operations. Mr Khan in fact accepted in his written submissions that the failure to retain those records “may reflect badly on MAP and Mr Chandra”.

[70]            No error of law on the part of the Director in relation to the audit has been demonstrated.

Use of revocation for non-payment of RUC

[71]            The applicants plead that it was an error of law for the Director to take into account non-payment of RUC when making the decisions.

[72]            Mr Khan submits that a RUC debt is a civil debt that is recoverable like any other civil debt. But he says the Director did not seek to recover the RUC debt from MAP in that way. Mr Khan submits this is an improper use of the regulatory regime under which the paramount consideration is public safety. He says the non-payment of RUC, a road tax, does not impact public safety.

[73]            I do not accept that the Director is not able to take non-payment of RUC into account in making the decisions. First, s 30C(2)(b) provides that the Director may take into account “any offending by the person in respect of transport-related offences (including any infringement offences)”. That would appear to include RUC offences. Second, even if I am incorrect in that regard, the Director may take into account, under s 30C(2)(f) “any other matter that the Director considers it is appropriate in the public interest to take into account” and, under s 30C(4) “any other matters and evidence as the Director considers relevant”.

[74]            The effect of Mr Khan’s submission is that the Director is not able to take into account any instances of regulatory non-compliance that do not directly impact public safety. I do not accept that submission. The statutory test is a “fit and proper person” test, not simply a “public safety” test. To illustrate that point, s 30C(2)(e) provides that the Director may take into account “any history of persistent failure to pay fines incurred by the person in respect of transport-related offences”. On its face, a persistent failure to pay fines is not related to public safety but the statute provides for the Director to be able to take that failure into account.

[75]            It is also the case that holders of TSLs have primary responsibilities beyond public safety considerations. Section 30A(1)(b) provides that a holder of a TSL must ensure that no vehicle is used in the service unless and until all fees payable have been paid. For the land transport system to function those involved in the system must pay their fees. I consider a failure to pay those fees can be taken into account when

considering whether the licence holder is a fit and proper person to hold the licence. That does not change simply because a RUC debt can be recovered in the same way as any other civil debt.

[76]There is no error of law established on this point.

Use of revocation when there were (allegedly) no public safety issues

[77]            The applicants plead that the Director’s use of the revocation process was an error of law when there were no issues of public safety. Mr Khan submits that MAP’s “perfect safety record” must be relevant. He says MAP’s vehicles have never been involved in any accidents, nor have any other safety incidents arisen.

[78]            In his affidavit Mr Burrows sets out why he was concerned that MAP’s vehicles posed public safety risks despite the Fortune Manning letter. Mr Burrows first refers to the submission on behalf of the applicants and then sets out his safety concerns:

66In their submissions, MAP Transport note that its certificate of fitness or "CoF" initial pass rate had improved from 66.7% as at 16 October 2023 to 71.4% as at 1 November 2023. It also asserted that "the quality of MAP's fleet safety was confirmed when MAP underwent a significant inspection during this audit process and there was not a single pink sticker".

67I have already discussed the condition of MAP Transport's vehicles at the 4 October 2023 fleet inspection earlier in my affidavit. I identified outstanding concerns about the condition of MAP Transport's vehicles in my notice of decision:

(a)MAP Transport had presented only 12 of 21 heavy motor vehicles at the 4 October 2023 fleet inspection. We could not be satisfied all vehicles were compliant, since many had not been presented for inspection.

(b)Only 2 of the vehicles that were presented left without faults. Two vehicles were issued with green stickers, ordering them off the road as they were not up to CoF standard.

(c)One of the two green-stickered vehicles was a trailer with the registration plate [number]. It was green-stickered for chassis cross-member cracks. During a roadside inspection that the Police conducted on 22 November 2023, that trailer was issued a further non-operation order for the same issue.

(d)One of MAP Transport's trailers, registration [number], failed its CoF on 11 December 2023, with 9 faults found – 7 of them were brake-related.

(e)By the time of my notice of decision, 19 of MAP Transport's 21 heavy motor vehicles had been through an initial CoF inspection using MAP Transport's goods service licence number. Of those 19 inspected, 6 failed at the initial inspection. In total there were 3.8 faults found per failed vehicle, with vehicles failing on critical issues such as brakes, suspension, exterior, lights, vehicle and towing.

(f)By the time of my notice of decision, MAP Transport's initial CoF pass rate had fallen to 68.4%, indicating a downturn in vehicle condition when presented for inspection. The national average at the same time was 78.7%.

(g)MAP Transport's submissions had not provided any evidence to show that it had processes in place that were managing safety for drivers and vehicles.

68I note, although I did not refer to it in my notice of decision, that one of MAP Transport's vehicles, a truck with the registration plate [number], re-presented for a CoF recheck twice before passing, and it failed both initial inspections on brakes. It also travelled 81 kms on a failed inspection with brake defects before passing.

[79]            As regards servicing, the applicants have filed an affidavit of Prasheel Kumar, who says he is the director of Tivoro Investments Ltd, through which he operates a vehicle repair and maintenance workshop. He says he has been involved in repairing and maintaining MAP’s vehicles. I do not propose to take that evidence into account. It was not before the Director when he made the decisions. I do not consider it is relevant or admissible in this proceeding. I do not admit it.

[80]            In his affidavit, Mr Burrows also refers to the number of traffic offences that MAP had incurred since it was granted a TSL on 15 June 2023. These included offences relevant to public safety: speeding offences, breaches of road rules and operating vehicles that were not up to CoF standard. This offending includes an obvious public safety dimension.

[81]The Director did not err as alleged on this ground.

Revocation process should not be used for debt recovery purposes

[82]            The applicants plead that a RUC debt is a civil debt and the revocation process under the LTA should not be used for debt recovery purposes by the NZTA.

[83]            Although this is pleaded as a separate error of law it really is the same error as alleged in [71]–[76] above. Nothing further needs to be added.

Failure to comply with audit not to be taken into account in making decisions

[84]            The applicants plead that there is a prescribed penalty for non-compliance with a s 198 audit, being a fine not exceeding $5,000.27 They say the decisions were punitive measures not available to the Director in response to non-compliance with the s 198 audit. Although this is pleaded as a separate error it really is the same as the error alleged in [61]–[70] above. Nothing further needs to be added.

MAP’s responsibility for work time and logbook offending

[85]            This is not expressly pleaded as an error of law. However, Mr Khan makes submissions on this issue and accordingly I address the issue as if it had been pleaded.

[86]            Mr Khan notes that in the transport industry, drivers are subject to work time limits. They must carry and maintain a logbook recording the hours worked, among other details.  He says in making the decisions the Director alleged that MAP and  Mr Chandra did not have processes in place to ensure that drivers were complying with the work time limitations. But says Mr Khan, there is no “chain of responsibility” under the LTA that requires MAP and Mr Chandra to manage the work time and logbook compliance of its drivers. Mr Khan further submits that compliance with work time and logbook rules is the responsibility of the individual drivers. Accordingly, he submits that the Director should not have taken drivers’ work time and logbook non-compliance into account.

[87]            Mr Khan refers the Court to provisions in the LTA which he says attribute responsibility for such offending solely to the drivers and not to a goods service

27     LTA, s 51.

operator. He refers to s 30ZC which provides that drivers must comply with limits on work time and s 30ZF which provides that drivers must maintain logbooks. Mr Khan points to ss 79O and 79Q under which the driver, not the company, may be prosecuted for failure to comply with work time limits or maintain their logbook. He says the only work time and logbook offences under which a company may be prosecuted is  s 79T in circumstances where the transport company “caused” or “required” a driver to breach the work time limitations or not maintain their logbook.

[88]            Mr Khan also refers to the Stan Semenoff Logging judgment and submits the Director did not have a proper basis to revoke MAP’s TSL unless a clear nexus between a specific act or omission by MAP and/or Mr Chandra and the driver’s breach of their work time or logbook requirements had been established.

[89]            I make the same point as I made earlier in relation to Mr Khan’s submission as regards a breach of the s 198 audit requirements: the fact that the LTA attributes criminal responsibility for work time and logbook non-compliance to drivers does not in my view affect the Director’s ability to take that non-compliance into account when making the fit and proper person assessment. As well as the discretion already referred to in ss 30C(2)(f) and 30C(4), s 30F(b) provides that it is mandatory for the Director to consider any offending in relation to major transport-related offences, particularly offences relating to safety or to road user charges. Section 30F(b) is not restricted to offending by the person who is the subject of the fit and proper person assessment.

[90]            Further, and despite the provisions Mr Khan relies on, s 30P provides that a transport service driver, when using a vehicle in a transport service, must “drive on behalf of the holder of the relevant transport service licence”. As already noted, the LTA contemplates there being a person in control of the transport service. That, indicates in my view, that the Director can take into account work time and logbook offending when considering the fit and proper person test for the transport operator.

[91]            Referring back to Mr Khan’s submission that s 79T is the only work time and logbook offence attributable to a transport company I note however that s 79R(3) provides that “every person, not being the driver of the vehicle, commits an offence where the person requires, directs, or allows a vehicle … to be used”, and the logbook

is not maintained, or the logbook omits or is false in a material particular, whether or not the person knows that a logbook is not maintained or knows of the omission or falsehood, commits an offence.

[92]            The use of the word “allows” which prescribes a strict liability offence, means that MAP may be criminally liable for logbook non-compliance by its drivers whether or not it is aware of that non-compliance. In my view that suggests an expectation that persons in control of a transport service will monitor and address any logbook non-compliance by their drivers. Finally, as Mr Papps points out, s 30S enables the Director to revoke a TSL on the grounds that any driver (as opposed to the licence holder or the person in control of the transport service) is not a fit and proper person.

[93]            Turning to Mr Khan’s reliance on Stan Semenoff Logging, the reasoning in that case needs to be understood. In that case NZTA had revoked the company’s TSL under s 30S(1)(b), namely on the basis that any person who has control of the transport service is not a fit and proper person to have control of the service. The issue was that NZTA had not been able to attribute the systemic failure in the company’s service to any one of the three persons in control. In the present case Mr Chandra was the only person in control.

[94]            Another distinction between the instant case and Stan Semenoff Logging is that here, the Director reached the view that MAP itself was not a fit and proper person to hold a transport service licence. The revocation was accordingly under s 30S(1)(a) (not s 30S(1)(b)). In Stan Semenoff Logging the Judge expressed the view that evidence of systemic failure over a long term might justify a finding that the holder of the licence is not a fit and proper person.28 In other words, the nexus in relation to individuals in control does not arise where the Director’s focus is the licence holder under s 30S(1)(a).

[95]            In summary, although this was not pleaded as a separate error of law, I have considered the submissions. There was no error by the Director.

28     Stan Semenoff Logging Ltd v New Zealand Transport Agency, above n 13, at [35].

Second ground for judicial review – proportionality/unreasonableness

[96]            Neither Mr Khan’s written nor oral submissions really develop this second ground of review.

Disproportionate response and unreasonable decisions

[97]            The applicants plead that the revocation decision and disqualification decision are a disproportionate response to the matters relied upon by the Director and that the two decisions are unreasonable. It is convenient to address these two grounds together.

[98]            In Hu v Immigration and Protection Tribunal Palmer J referred to the “nature, rarity and high threshold for the success of unreasonableness as a ground for judicial review”.29 The Judge then referred to Edwards v Bairstow where Lord Radcliffe identified three rare states of affairs which would constitute errors of law where “there is no evidence to support the determination” or “the evidence is inconsistent with and contradictory of the determination” or “the true and only reasonable conclusion contradicts the determination”.30 The New Zealand Supreme Court later explained in Bryson v Three Foot Six Ltd that these were circumstances where:31

An ultimate conclusion of a fact-finding body can sometimes be so insupportable – so clearly untenable – as to amount to an error of law; proper application of the law requires a different answer.

[99]In Hu Palmer J went on to say:32

Lord Radcliffe’s three scenarios, encapsulated by the Supreme Court as an insupportable or untenable ultimate conclusion, also assist in identifying what constitutes a relatively narrow but usable concept of unreasonableness. A decision may be unreasonable if it is not supported by any evidence, or if the evidence is inconsistent with or contradictory of it, or if the only reasonable conclusion contradicts the determination. The first two of these involve the adequacy of the evidential foundation of the decision. The last involves the chain of logical reasoning in the application of the law to the facts: if there is a material disconnect in the chain of logic from a fact or a legal proposition to a conclusion, a decision may be unreasonable and therefore unlawful.

29     Hu v Immigration and Protection Tribunal [2017] NZHC 41, [2017] NZAR 508 at [28].

30     Edwards v Bairstow [1956] AC 14 (HL) at 36.

31     Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 at [26].

32     Hu v Immigration and Protection Tribunal, above n 29, at [30].

[100]        I do not consider the decisions meet any of the three formulations of unreasonableness when regard is had to the reasons given by the Director for his decisions as set out in [17] above.

[101]        I turn to the allegation that the decisions were a disproportionate response to the matters relied upon by the Director. Disproportionality is a manifestation of unreasonableness.33 The high threshold of unreasonableness as a ground for review applies.

[102]        Mr Khan submits that there were other tools at the Director’s disposal such as ordering re-training or imposing conditions on MAP’s TSL or even giving MAP the opportunity to implement its proposed new policy set out in the Fortune Manning letter.

[103]        First, in relation to conditions, s 30U does not confer upon the Director a freestanding power to impose conditions on a transport service. It is unclear whether the Director could have imposed meaningful conditions that would have improved MAP’s regulatory compliance. But in any event I consider the Director’s decision that MAP was not a fit and proper person to hold a TSL was a proportionate response to what was before the Director.

[104]        To summarise, when MAP was granted its TSL in June 2023, because it was a new service, there was no information to suggest it was not a fit and proper person to hold a TSL. Equally, however, there was no positive information available to support the proposition that MAP was a fit and proper person to hold a TSL. In a relatively short period after the TSL was granted, the Director became aware of the 20 traffic offences that MAP had incurred between 11 August 2023 and 12 September 2023. That was one of the reasons why the Director considered it was appropriate to audit MAP’s performance.

[105]        Although there is some disagreement over what and was not provided by MAP for the purposes of the audit, it is clear that Mr Chandra had not retained copies of

33     Conley v Hamilton City Council [2007] NZCA 543, [2008] 1 NZLR 789 at [58]; Isaac v Minister of Consumer Affairs [1990] 2 NZLR 606 (HC) at 636.

records that the Director considered that a person in control of a goods service would be expected to retain as part of their general oversight of the goods service’s operations.

[106]        As well in relation to the audit, MAP presented only just over half of its vehicles for inspection. Over half of those presented failed with faults that would have also caused them to fail a CoF inspection. Two vehicles had safety-critical faults. Further, the audit identified significant breaches of work time, rest time, logbook and RUC requirements. The Director acknowledges that MAP  submitted  in  the  Fortune Manning letter that it was putting policies and procedures in place to address work time and logbook requirements. However, there was no explanation of when it would be adopting these policies or communicating them to drivers. Further, the Director was not satisfied that the proposed policies would be properly promoted or enforced given what the Director considered was Mr Chandra’s demonstrated lack of management of MAP.

[107]        In summary, given all of the instances of regulatory non-compliance at its early stages and with no prior positive history, I consider the Director’s response that MAP was not a fit and proper person to hold a TSL was a proportionate response.

[108]        Finally, on this issue Mr Khan submits that the Director proceeded directly and urgently when there was no evidence that such urgency and immediacy was required. I do not accept that is a criticism that can be levelled at the Director. He is simply required to be satisfied that the licence holder is not a fit and proper person to hold a TSL.

Failure to take into account or giving inadequate weight to certain matters

[109]        The applicants plead that the Director has failed to take into account or has given inadequate weight to the following:

(a)nearly all of the factors that the Director was required to consider under ss 30 and 30F of the Act to apply in favour of MAP and Mr Chandra;

(b)all of the specific concerns raised by the Director in the notice of proposal were addressed in the submissions; and

(c)no complaints had ever been laid against MAP or Mr Chandra.

[110]        I have already effectively dealt with the above when considering the first ground of review. There I referred to the limited mandatory relevant considerations and the wide discretion to take into account any matters the Director considers relevant. As to the allegation of inadequate weight being given to the above three matters, weight is a matter for the decision-maker and not a recognised ground of judicial review.

Compliance with audit and RUC debt

[111]        Finally, in the second ground of review the applicants plead that the Director has instead based his decision on an irrelevant consideration or has given undue weight to an irrelevant consideration being that MAP did not fully comply with the audit and has not repaid all of its RUC debt.

[112]        This allegation has already been addressed in the context of the first ground of review.

[113]The second ground of review fails.

Result

[114]The application for review is dismissed.

Costs

[115]        I did not hear submissions on costs. Costs are accordingly reserved. The Director, as the successful party, is prima facie entitled to costs. If costs can be agreed a joint memorandum is to be filed within 20 working days of the date of this judgment. If costs cannot be agreed, the Director is to file and serve his costs memorandum within five working days of the date for the joint memorandum. MAP and Mr Chandra

are to file and serve their memorandum in response within five working days of the date of service of the Director’s memorandum.

[116]        Costs memoranda should not exceed four pages excluding attachments. I will determine costs on the papers.

Gordon J