Moffatt v New Zealand Transport Agency HC Dunedin CIV-2011-412-000679

[2011] NZHC 1682

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2011-412-000679

BETWEEN  STUART BRUCE MOFFATT Plaintiff

ANDNEW ZEALAND TRANSPORT AGENCY Defendant

Hearing:         28 October 2011

Appearances: R Kelly and K Jarvis for Plaintiff

C Lange and A Thompson for Defendant

Judgment:      28 October 2011

ORAL JUDGMENT OF CHISHOLM J

[1]      The  plaintiff,  a  transport  operator,  seeks  judicial  review  of  a  decision revoking his transport licence.  Implementation of that decision has been deferred by agreement until 5 p.m. today.  Two applications are before the Court:  first, whether the applicant should be granted interim relief pursuant to s 8 of the  Judicature Amendment act 1972; secondly, and depending on the outcome of the first application, whether this matter should be removed into the Court of Appeal.

Background

[2]      The background is relatively complex.  This brief summary reflects that this is an interlocutory application.

[3]      Mr Moffatt, the plaintiff, has been driving trucks since 1973.  He obtained the licence that is in issue in this proceeding in 1987.  Over time various companies have been involved in the operation:   Lynnjoyce Holdings Limited,   A & M Cartage

Limited (which went into liquidation in 2009), and North Otago Freighting Limited.

MOFFATT V NEW ZEALAND TRANSPORT AGENCY HC DUN CIV-2011-412-000679 28 October 2011

[4]      Currently,  Mr  Moffatt  is  operating  a  transport  service  in  Oamaru.    He employs four drivers and an administrator.   It is not seriously disputed that if the revocation of his licence stands he will have to close down.

[5]      On 16 August 2010 Mr Moffatt was informed by the New Zealand Transport Agency that his licence was deemed to have been surrendered under s 30O(3) of the Land Transport Act 1998.  This was on the basis that no vehicle had been operated pursuant to a licence for the last two years.   The licence was removed from the register.

[6]      An interim stay was granted by Fogarty J on 22 October 2010, with leave being granted for the Transport Agency to apply to have it set aside.  In due course the Agency exercised that right but its application to set aside the interim stay was declined by Fogarty J on 19 November 2010.

[7]      The substantive application came before Whata J on 13 May 2011 and his judgment was delivered on 24 June 2011.  In the course of his decision he said that he could readily appreciate the frustration of the respondent in its dealing with the plaintiff and in particular with the menagerie of companies that the plaintiff utilised.

[8]      Whata J went on to say:

[73]     But if the way in which the application conducts his business is a serious and substantial concern to the respondent, then it has the mechanisms within the Act to deal with that, including the removal of the licence on the basis that the applicant is not a fit and proper person to hold a licence.

In the end result the review was allowed and the licence was reinstated without prejudice to the Agency reassessing whether or not there was a proper evidential basis to conclude that the licence was inactive for a period of two years or more since its inception. There was no appeal.

[9]      On 3 August 2011 the Agency gave notice pursuant to s 30S of the Act that it intended to revoke the licence on the grounds that the Agency was “not satisfied you are a fit and proper person pursuant to s 30C of the Act to be the holder of a transport service licence...”.  In fact the Agency can only revoke a transport service licence if it is satisfied that “the holder...is not a fit and proper person to be the holder...”.

There is debate as to whether the correct test was applied and, if it was not, the revocation was saved by reference to the correct test later in the decision.

[10]     On 5 September 2011 Mr Moffatt objected to the proposed revocation.  The objection relied on bias, a wrong test, and inconsistency with a previous finding (that on  11  December  2007  the  agency  had  issued  a  licence  to  an  entity  under  Mr Moffatt’s control, A and M Cartage Limited, on the basis that Mr Moffatt was a fit and proper person to hold the licence).

[11]     The same day the Agency issued a decision confirming that Mr Moffatt’s licence had been revoked.  The decision recorded that Mr Moffatt’s submissions had been taken into account and that the grounds of the decision remained the same as those outlined in the proposed decision.

[12]     As already mentioned, that decision has not been implemented.  However, the agreement expires later today, hence the need for a decision today.

Interim Relief

[13]     The plaintiff seeks interim relief under the Judicature Amendment Act on the basis that such relief is reasonably necessary to preserve his position in terms of s 8. He contends that in all the circumstances it would be unfair to require him to pursue his right of appeal to the District Court.  No appeal has been lodged.  The plaintiff claims that he has a strong case and that the court ought to exercise its discretion in favour of granting interim relief.

[14]     With reference to the strength of the plaintiff’s case, Ms Kelly emphasised: the test that had been applied was effectively the reverse of the test that should have been  applied  and  this  was  a  fundamental  error;  the  decision  resulting  in  the revocation of the licence was incompatible with the decision in 2007 that found Mr Moffatt to be a fit and proper person to hold a licence; contrary to the reasoning of the Agency, there was no evidence of risk to the public safety; improvements over the last year had not been taken into account; and the adjudicator was partisan and biased.  Ms Kelly emphasised that if interim relief is not granted the plaintiff will go out of business and does not have the funds to pursue both a judicial review and an appeal.

[15]     For the defendant Mr Lange proceeded on the basis that interim relief under s 8 of the Judicature Amendment Act involves two steps:   first, an enquiry into whether the statutory threshold is met (i.e. that orders are necessary to preserve the position  of the applicant);  secondly,  the court  exercises  a wide discretion  as  to whether relief ought to be granted.

[16]     The first step is not disputed by the defendant, it being accepted by the Agency that if the applicant’s position is to be preserved an order is necessary.  On the other hand the Agency is strongly opposed to the Court exercising its discretion in favour of granting interim relief.   In support of that proposition it relies on: matters of public safety; the existence of a right of appeal to the District Court which should  be  pursued  by  the  plaintiff;  s  106(3)  of  the  Land  Transport Act  which precludes interim relief; and the traditional reluctance to grant interim relief in a situation like this.  Mr Lange suggested that in the end it comes down to balancing the private interest against public safety, taking into account the merits of the application.

[17]     In Director of Civil Aviation v Air National Corporation Limited[1]  the Court of Appeal considered whether interim orders should have been made in a situation having some parallels with this case:

[1] Director of Civil Aviation v Air National Corporation Limited  CA48/2011 [2011] NZCA 3

[30]      We  accept  that  the  High  Court  has  jurisdiction  to  make  interim orders in this type of case.  This follows from the language of ss 4(1) and (8) of the JAA.  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 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 appeal was allowed in that case because the Court of Appeal considered the

High Court had incorrectly exercised its discretion when granting interim relief.

[18]     As is apparent from that decision, and many of the other decisions that have been cited, the critical issue is whether or not the discretion to grant interim relief

should be exercised.  When determining that issue I take into account the Court of Appeal’s guidance in the Air National case.   Ultimately, however, the exercise of discretion needs to be considered on a case by case basis.  In my view none of the cases that have been cited come close to the situation that exists in this case.

[19]     I am satisfied that interim relief should be granted.  This reflects a number of factors.

[20]     First, there can be no question that the decision of the Agency is amenable to judicial review.  Moreover it is accepted that the threshold under s 8 has been made out.

[21]     Secondly, from the preliminary assessment that I have been able to make, I have no doubt that the plaintiff has a strong case.  That in turn reflects a number of factors:

(a)      While it is perfectly true, as Mr Lange pointed out, that the correct test was mentioned later in the proposed revocation (at paras 86 and 87), the flawed test was used at a critical point early in the decision.  I do not accept that the difference between the test used and the statutory test is minor.

(b)As  Ms  Kelly  said,  the  ground  expressed  at  the  beginning  of  the proposed decision effectively reverses the statutory test.   Instead of asking whether he was satisfied that Mr Moffatt was not a fit and proper person to hold the licence, Mr Stevenson effectively asked himself the opposite question.  The reality seems to be that at least in this part of his thought process Mr Stevenson has approached the matter as though it was an application for a new licence rather than a proposed revocation. This alone must call the decision into question.

(c)      There is also a real issue about whether on the evidence it was open to the Agency to conclude that there had been “serious[2]  safety related

[2] My emphasis.

offences”.  While there are certainly a good number of offences, the most serious seem to involve exceeding the speed limit.  The evidence indicates  that  over  38  years  of  driving  Mr  Moffatt  has  never personally had an accident and he claims that during that period only one vehicle operated by him has been involved in an accident (which was not serious).   This is not, of course, a matter that can be determined at an interlocutory stage.  But at the very least there must be a serious question to be tried.

(d)There are also allegations of lack of partiality and bias.   Numerous emails, particularly between Mr Stevenson and the police, are relied on by the plaintiff.  Views expressed by him about the decisions that have been reached by this Court are also said to indicate predetermination or bias.   Again it is not for me to determine the issues.   Suffice to say that they give rise to issues that will require serious consideration at the substantive hearing.

[22]     Thirdly, the historical content of this application is particularly relevant to the exercise of discretion.  That aspect distinguishes this case from many other cases that have been cited.  Issues concerning this licence have recently been before this Court on three occasions (two concerning the interim order and the third involving the substantive judgment of Whata J). The revocation under consideration occurred very soon  after the most  recent  decision  (about  six  weeks).   While there can  be no suggestion of abuse of the Court’s process, it seems to me that in light of this history it  would  be  unrealistic  to  expect  the  plaintiff  to  appeal  to  the  District  Court, especially when there are allegations of bias.

[23]     Finally, I balance the public and private interests.   The public interest is effectively represented by road safety considerations.   The private interest is represented by the fact that the plaintiff will go out of business if interim relief is not granted.   For reasons that I have already expressed I fail to see how there is a compelling public interest in terms of road safety, particularly bearing in that there is evidence of improved conduct over recent times.   On the other hand, to put this operator  out  of  business  (and  his  employees  out  of  work)  before  he  has  an

opportunity to have his substantive application considered by the Court would be, to say the least, unjust.

Removal into the Court of Appeal.

[24]     Given the conclusions that I have reached the application for removal into the

Court of Appeal becomes academic.

Orders

[25]     There will be an order pursuant to s 8 of the Judicature Amendment Act suspending the revocation of the plaintiffs licence until further order of the Court. This effectively represents a continuation of the situation that applied until today.

[26]     Counsel  are  to  submit  memoranda  as  to  a  proposed  timetable  for  the substantive hearing.

[27]     I record that Ms Kelly has expressed reservations about  the way I have expressed the order.   She maintains that it would be better to express the order in terms of the application.  To my mind the order is clear enough, and Mr Lange has assured me that the Agency will not be taking any steps in relation to this licence until the matter is substantively determined.

Costs

[28]     Costs   are   awarded   to   the   plaintiff   on   the   2B   scale,   together   with disbursements. There is no certificate for second counsel.

Solicitors:

Staley Cardoza, P O Box 5698, Dunedin (Counsel: Raelene Kelly, P O Box 5148, Dunedin) Raymond Donnelly, P O Box 533, Christchurch