Rams Logistics Ltd v Director of Land Transport

[2025] NZHC 326

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-000291

[2025] NZHC 326

UNDER

the Judicial Review Procedure Act 2016

IN THE MATTER

of a decision made pursuant to the Land Transport Act 1998

BETWEEN

RAMS LOGISTICS LTD

First Applicant

BIPENDRA DHEERAJ RAM
Second Applicant

AND

THE DIRECTOR OF LAND TRANSPORT

Respondent

Hearing:

26 February 2025

Appearances:

S Khan and M Orange for Applicants

J P Papps and R J J Wales for Respondent

Judgment:

26 February 2025

Reasons:

27 February 2025

REASONS JUDGMENT OF VENNING J

This judgment was delivered by me on 27 February 2025 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Fortune Manning, Auckland

Chapman Tripp, Auckland

RAMS LOGISTICS LTD v THE DIRECTOR OF LAND TRANSPORT [2025] NZHC 326 [26 February 2025]

Introduction

[1]                  Rams Logistics Limited (Rams) operates a large trucking business. To do so it needs a Transport Service Licence (TSL). TSL’s are issued by the Director of Land Transport, the nominal head of the New Zealand Transport Agency (NZTA). On 28 January 2025 the Director issued a decision revoking Ram’s TSL effective from 11 February 2025.

[2]                  Rams and its Director, Bipendra Ram, seek to judicially review the Director’s decision but, in the meantime, and pending a hearing on its substantive application they sought interim orders preventing the Director from enforcing the revocation and enabling Rams to continue operating. Interim interim orders to that effect were made on 10 February pending this hearing. The application for interim relief was opposed by the Director.

[3]                  After hearing argument, I issued a results judgment granting the interim relief until the substantive fixture on 18 March 2025, with reasons to follow. These are the reasons.

Background

[4]                  Rams employs 52 staff and owns over 40 vehicles. Rams has contracts with NZ Post, Foodstuffs and Goodman Fielder. It is NZ Post’s third largest transport contractor and delivers post and mail to remote towns across the North Island daily. Rams also supplies supermarkets across the North Island.

[5]                  However, over a period of time Rams has failed to pay Road User Charges (RUC) due on the operation of its fleet of trucks. It owes a significant RUC debt to NZTA. Mr Ram accepts it owes NZTA a large RUC debt, although he disputes the quantum NZTA claims of $1,046,441. Mr Ram says that the debt arose initially during COVID when fuel and labour costs skyrocketed but transport businesses had to continue operating because they performed a critical function. Although Ram’s costs increased dramatically the rates it was receiving for its work stayed the same. It became difficult to pay the RUC. Mr Ram also says a glitch in the company's accounting software meant PAYE filings were not made for a period. As a

consequence, Rams incurred a large debt to the Inland Revenue Department (IRD), which it is now paying off at $100,000 per month. That has further constrained its cash flow and ability to repay the RUC debt. A liquidation petition issued by the IRD has been adjourned to 28 March 2025.

[6]                  The Director does not accept Ram’s explanation for its RUC debt. Rhys Bright, a team manager, has sworn an affidavit in opposition to this application and to the substantive judicial review application. In that affidavit Mr Bright sets out the history of Rams’ default in relation to the RUC charges. His evidence discloses that the debt was incurred over a lengthy period and despite arrangements to pay it in the past, it has increased.

[7]                  The Director considers that because of its continued and ongoing failure to pay its RUCs Rams is not a fit and proper person to hold a TSL and for that reason issued the notice revoking Ram’s TSL.

Jurisdiction for interim orders

[8]                  Rams seeks interim relief under s 15 of the Judicial Review Procedure Act 2016:

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:

(b)prohibiting or staying any proceedings, civil or criminal, in connection with any matter to which the application relates:

(c)declaring that any licence that has been revoked or suspended in the exercise of the statutory power, or that will expire by the passing of time before the final determination of the application, continues and, where necessary, that it be deemed to have continued in force.

(3)However, if the Crown is a respondent,—

(a)the court may not make an order against the Crown under subsection (2)(a) or (b); but

(b)the court may, instead, make an interim order—

(i)declaring that the Crown ought not to take any further action that is, or would be, consequential on the exercise of the statutory power:

(ii)declaring that the Crown ought not to institute or continue any proceedings, civil or criminal, in connection with any matter to which the application relates.

(4)An order under subsection (2) or (3) may—

(a)be made subject to such terms and conditions as the court thinks fit; and

(b)be expressed to continue in force until the application is finally determined or until such other date, or the happening of such other event, as the court may specify.

[9]                  Rams relies on s 15(2)(c). Rams argues that the interim orders are necessary to protect its position pending the substantive hearing of the judicial review proceeding, and the Court should exercise its discretion in its favour and conclude that the orders sought are appropriate.

Director’s opposition

[10]              The Director opposes the application. He notes that Rams has also appealed to the District Court against the decision under s 106 of the Land Transport Act 1998 (LTA). He says the issues which Rams seeks to raise in this judicial review proceeding will be considered and dealt with by the District Court in the appeal. Further, s 106(3) of the LTA confirms that any decision continues in force pending the appeal and no person is excused from complying with the provisions of the LTA on the ground an appeal is pending. The Director says that Ram’s application for judicial review is effectively an attempt to avoid the “no stay” provision in s 106.

[11]              The Director also argued that in any event, the merits of Rams’ application were weak, and the balance of convenience did not support the orders being made.

Applicable principles

[12]              The principles to apply on an application such as this are settled. In Carlton and United Breweries Ltd v Minister of Customs Cooke J set out the two-stage test for interim relief:1

In general, the Court must be satisfied that the order sought is necessary to preserve the position of the applicant for interim relief—which must mean reasonably necessary. If that condition is satisfied, as the Chief Justice was entitled to find that it was here, the Court has a wide discretion to consider all the circumstances of the case, including the apparent strength or weakness of the claim of the applicant for review, and all the repercussions, public or private, of granting interim relief.

[13]In Longville v NZTA Wylie J said:2

[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. There must be a “necessity”, as contrasted with a simple desire, to preserve a position. It is not appropriate to add any gloss to the word “necessary” or to attempt to define it in other words. 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.

Are interim orders necessary?

[14]     Mr Khan referred to the case of Boss Transport Ltd v NZTA.3 Boss Transport’s TSL was revoked because it had allegedly been operating vehicles that were not up to certificate of fitness standard, its drivers were breaching work time and logbook rules and the company had incurred 179 traffic infringements. Despite that, Cull J granted an interim order reinstating its TSL pending the hearing of its judicial review application. She accepted that without the relief, the decision would require Boss to close its business and cease operating which would put its employees out of work. Cull J emphasised that serious penalties and consequences such as revocation must be reserved only for truly serious cases.

[15]     Mr Khan submitted that similar serious consequences would follow in the present case if the interim orders were not maintained. Mr Khan advised that Ram’s

1      Carlton and United Breweries Ltd v Minister of Customs [1986] 1 NZLR 423 at 430 (CA).

2      Longville v NZTA [2019] NZHC 1445 (footnotes omitted).

3      Boss Transport Ltd v NZTA [2019] NZHC 522.

proposal to sell its fleet of vehicles to free up capital (to clear its debts) and then to lease them back to enable it to continue operating was still under consideration by a financier.

[16]     Mr Papps noted that, while the Director accepted Rams could not lawfully carry on its current operations unless the interim orders were granted, he did not concede interim relief was necessary to preserve Rams’ position. Even though a substantive hearing has been granted for the judicial review on 18 March (less than three weeks away), he submitted that it was not clear Rams had a financially viable position to preserve. Mr Papps referred to the debt owed to the IRD, the liquidation proceeding by the IRD, and that it did not appear Rams had been successful, over the last many months, in obtaining finance or to make other arrangements to resolve its debt position.

[17]     Mr Papps may well be right, in that Rams’ financial position may ultimately prove untenable. However, at this stage the Court is not prepared to say that the proposals which Mr Ram is pursuing to resolve its issues will not be successful.

[18]     Finally on this point, the Director submitted it was implicit in the language of s 15 that any position to be preserved should be lawful. Rams’ ongoing operation of the vehicles that have overrun their RUC licence would mean that it was continuing to carry on its business in a non-compliant manner. However, that is a matter that can be addressed by a suitable condition to any interim order.

[19]     On the evidence before the Court, I accept that unless an interim order is made granting the relief sought by Rams then it will have to close its operations immediately. As a consequence, its 52 staff will be unemployed, at least temporarily. Rams will also face further hardship in that it will have to sell the 40 vehicles it owns in a fire sale situation. There will also be disruption to third parties including NZ Post and its customers, particularly rural customers and at the least serious inconvenience to some of the Foodstuffs’ supermarkets across the North Island.

[20]     I accept that the interim relief sought is necessary to preserve Ram’s position pending a substantive hearing of its application for judicial review.

[21]     The real issue on this application is whether the Court should exercise its discretion to grant the interim relief, having regard to the apparent strength or weakness of Rams’ claim for review and all the repercussions, public or private, of granting interim relief.

Exercise of the discretion

[22]     As noted, the Director takes a preliminary point. Mr Papps submitted a significant factor against granting interim relief was the statutory regime. While the LTA provides for an appeal under s 106, once a decision is made it takes effect unless overturned on appeal. Section 106(3) provides:

Every decision of the Director 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.

[23]     In Director of Civil Aviation v Air National Corporate Ltd,4 the Court of Appeal addressed a materially identical provision in the Civil Aviation Act 1990. The Court observed that too ready a resort to interim relief under Judicial Review proceedings ran the risk of undermining the effect of the “no stay” provisions and created an incentive for appellants to launch judicial review proceedings simply to access the High Court’s interim relief in its review jurisdiction.

[24]     In Foreman Automotive Ltd v NZTA Katz J applied those observations.5 While accepting that interim relief might be justified where there were strong grounds for judicial review, she considered that where there are separate statutory appeal rights that preclude a stay then interim relief might only be available in exceptional circumstances.

[25]     However, I do not read the decision of Director of Civil Aviation v Air National Corporate Ltd as going quite that far. The Court of Appeal accepted that the Court has jurisdiction to make interim orders. The Court ultimately accepted that the “no stay” provision associated with appeal rights is a relevant consideration to the exercise

4      Director of Civil Aviation v Air National Corporate Ltd [2011] NZCA 3.

5      Foreman Automotive Ltd v NZTA [2013] NZHC 1167.

of the discretion if an application is made for interim orders. I approach the matter on that basis. Further, in this case with the substantive hearing on 18 March 2025, any stay will be limited in effect and will not frustrate the appeal process in the District Court. I return to the focus of the application which must be the merits of the proposed grounds of review, at least to the extent they can be considered at this interim stage.

[26]     Rams proposes to argue first that the Director/NZTA erred by misapplying the fitness and propriety test under s 30C of the LTA and second, that the Director/NZTA misused the powers granted under s 66 of the RUC Act by issuing notices under that section for purposes, other than those which it provided for.

[27]     Mr Khan referred to s 30C of the LTA and submitted that s30C(1) was a gateway provision. Section 30C 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

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

(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.

[28]     Ram’s argument is that, when assessing fitness and propriety any factors NZTA proposes to take into account must satisfy either the interests of public safety or the protection of the public from serious or organised criminal activity. Rams’ RUC debt does not fall into either s 30(1) category. Mr Khan intends to argue that the other, more general considerations under s 30C(2), (3) and (4) are subordinate and only engaged if the threshold in s 30C(1) is met.

[29]     Mr Papps’ response on behalf of the Director is that this very argument was considered and rejected by Gordon J in MAP Transport Ltd v The Director of Land Transport.6 In that case Mr Kahn had made the argument for MAP that as the RUC debt is a civil debt it was improper to use the regulatory regime under which the paramount consideration is public safety. Gordon J rejected that argument, noting that s 30C(2)(b) provides that the Director may take into account:7

“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

6      MAP Transport Ltd v The Director of Land Transport [2024] NZHC 2253.

7 At [73].

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”.

[30]     The Judge noted that the statutory test is a “fit and proper person” test, not simply a “public safety” test.8 Mr Khan’s response is that the case before Gordon J also included examples of the operator having incurred 15 infringement notices for other than RUC non-compliance and there had been a failure to maintain work time and logbooks as well as fatigue, so that public safety was engaged. By contrast, on the information before the Court in this case public safety was not at issue. He suggested that a more focused argument would be advanced on the gateway point in the present case.

[31]     Mr Bright suggested, and Mr Papps submitted, that in any event, there was a connection between the RUC debt and public safety because the NZTA relies on RUC payments to fund road maintenance. With respect I consider, at least at this stage, that argument is attempting to draw a rather long bow.

[32]     But even so, I consider the first of Ram’s proposed arguments faces a number of difficulties. Apart from the comprehensive reasoning of Gordon J in MAP, the wording of the sections themselves do not support Mr Khan’s argument. The sub- sections in s 30C are readily reconcilable. The considerations in s 30C(1) are mandatory, but the Director may also take into account the considerations in s 30C(2) for instance, and s 30F expressly provides for consideration of offending relating to RUCs. I understood Mr Khan to accept Rams had received at least some infringement notices (offence notices) in relation to its unpaid RUC.

[33]     That leaves the second proposed ground of review, which I understand has not been raised in any case to date. Section 66 of the RUC Act gives the RUC collector (the Director), the power to require Rams to produce for inspection records or other information in its possession or control. The Director/NZTA has issued several s 66 notices directed at obtaining Rams’ RUC records.

8 At [74].

[34]     Mr Khan argues that the s 66 notices were issued improperly as they were not issued for the purpose expressed in s 66 (1) of issuing an assessment under s 53(1) of the RUC Act, nor for ascertaining whether the provisions of the RUC Act had been complied with, but rather they were issued as part of the Director’s fitness and propriety assessment of Rams. Mr Khan referred to the power under s 113 A of the LTA which the Director could have invoked for that purpose. Mr Khan submitted that the different sections in the two pieces of legislation raised “practical issues and questions” as to how the Director/NZTA may carry out different functions without intermingling the different powers under the two distinct pieces of legislation which needed to be addressed at a substantive hearing.

[35]     In response Mr Papps submitted that there was nothing in s 66 to expressly forbid the use of the information obtained under that section for fitness considerations. Further, s 30C (2)(b) empowered the Director to take into account issues of non- compliance. He also referred to ss 30F and 30G of the LTA which expressly empowered the Director to consider information obtained from any source for the purpose of determining whether a person was a fit and proper person for any of the purposes of the LTA. Mr Papps argued that, given the relevance of RUC non- compliance in the fit and proper person assessment, it must be permissible for the Director to respond to any non-compliance identified by information obtained through s 66.

[36]     However, at this interim stage, I accept that the issue of the purpose behind issuing the notices in the first place is and remains potentially relevant. If the purpose of issuing the notice under s 66 was to enforce the fit and proper person sections under the LTA, as Mr Khan submitted, then arguably the notices were issued for an improper purpose. In relation to that I note that s 3 of the RUC Act confirms the purposes of that Act. None of those purposes are for compliance with the LTA or support the use of s 66 for the purposes of enforcing the fit and proper person provisions of the LTA.

[37]     It may well be that if the information obtained under a s 66 notice otherwise issued for a proper purpose under that Act discloses breaches of the RUC then the Director could take that information into account as Mr Papps submits, but the issue is the purpose of the issue of the notice in the first place as a matter of procedure. At

this preliminary stage I am not prepared to say that the proposition Mr Khan seeks to advance on behalf of Rams is not arguable.

[38]     In terms of public and private repercussions Mr Papps submitted that the size of Rams’ operation cut both ways. The public prejudice in the form of a substantial unpaid amount of RUC is correspondingly greater given the large number of vehicles involved. Next, he submitted the Director’s key concern was not the current level of RUC debt but the risk it would increase further if Rams was allowed to continue to operate. That concern can, however, be addressed by appropriate conditions as a grant of any interim relief.

[39]     I place little weight on the submission that policing the enforcement of Rams’ obligations under the RUC is a particular drain on NZTA’s resources. NZTA should have sufficient resources to ensure compliance.

[40]     Next, Mr. Papps suggested that if interim relief was granted then, given the outstanding amount of RUC charges in this case, it would be difficult for a court in the future not to grant interim relief with lesser amounts owing. But each case must of course depend on its own merits and facts. A significant factor in the present case is there is no suggestion that, apart from the failure to pay RUC there are any particular public safety concerns associated with the operation of Ram’s business. That will not always be the case.

[41]     The case of Semenoff Logging Ltd v NZTA was one where despite such concerns, an interim order was made. Semenoff was a logging haulage company in Northland.9 There were widespread logbook and work time issues. Whata J granted interim relief. On the issue of public safety Whata J considered NZTA’s concerns were justified, noting the number and duration of the non-compliances suggested a systematic problem. Nevertheless, on balance he accepted an interim order preserving Semenoff’s position was appropriate subject to strict conditions. Ram’s position for interim relief would seem to be stronger.

9      Semenoff Logging Ltd v NZTA [2019] NZHC 1133.

[42]     For the above reasons I concluded that, while the arguments that Mr Kahn proposes to advance on behalf of Rams at the substantive hearing are not perhaps the strongest, at this interim stage, and given the substantive hearing can be heard on 18 March 2025 less than three weeks away, and on the basis that appropriate conditions can be put in place to ensure Ram’s compliance with its ongoing RUC obligations, the Court should exercise its discretion in favour of granting the interim relief sought.

Costs

[43]Costs are reserved to follow the outcome of the substantive hearing.

Venning J