Stan Semenoff Logging Limited v New Zealand Transport Agency

[2019] NZHC 541

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000480

[2019] NZHC 541

UNDER

the Judicial Review Procedure Act 2016

IN THE MATTER

of decisions made pursuant to the Land Transport Act 1998

BETWEEN

STAN SEMENOFF LOGGING LIMITED

Plaintiff

AND

NEW ZEALAND TRANSPORT AGENCY

Defendant

Hearing:

22 March 2019

Appearances:

S Corlett and EID Fox for the Plaintiff

R McCoubrey and J Phillips for the Defendant

Judgment:

22 March 2019

JUDGMENT OF WOOLFORD J

Solicitors:Meredith Connell (Office of the Crown Solicitor), Auckland Brookfields Lawyers, Auckland

STAN SEMENOFF LOGGING LIMITED v NEW ZEALAND TRANSPORT AGENCY [2019] NZHC 541 [22

March 2019]

[1]                  On 15 March 2019, the New Zealand Transport Agency (“NZTA”) revoked the Transport (Goods) Services Licence (“licence”) issued to Stan Semenoff Logging Limited (“SSL”) with effect from Friday, 22 March 2019.

[2]                  On 20 March 2019, SSL filed a statement of claim under the Judicial Review Procedure Act 2016 challenging the NZTA decision, seeking a declaration that the decision is invalid and of no legal effect and an order quashing it. At the same time, SSL filed an interlocutory application for an interim order that, pending final determination of its application for judicial review, NZTA be prevented from revoking its licence. SSL has also filed an appeal in the District Court at Auckland against the NZTA decision.

Background

[3]                  SSL is a logging haulage company based in Whangarei. It is the largest logging haulage company in Northland and is responsible for 50 per cent of Northland’s wood flow and log haulage. SSL’s sole business involves the transportation of logging material from the forest to a port in Northland. It employs approximately 55 people, of whom 48 are logging truck drivers. It maintains a fleet of 55 vehicles and has contracts with over 25 companies, including suppliers and logging operators throughout Northland.

[4]                  According to NZTA’s decision, it conducted an audit of SSL in 2016 because of its concerns with the high number of rollovers in the Northland region. In 2017, NZTA undertook a further audit of SSL, which included an examination of the log books, GPS records and timesheets of eight drivers employed by SSL.

[5]                  On 8 August 2018, NZTA wrote to SSL outlining its findings in the 2017 audit. This letter set out:

(a)The traffic offence history of SSL;

(b)Alleged log book infringements by drivers discovered by NZTA as part of the analysis of the eight driver’s log books, GPS records and time sheets in the 2017 audit.

(c)Alleged speeding compliance issues NZTA had identified by SSL’s operator rating system (ORS) score, traffic offence reports, speed camera reports and GPS data; and

(d)NZTA’s view that there was a “high percentage of vehicles failing on brake system faults”.

[6]                  On the same day, NZTA also served on SSL a notice of its proposal to revoke SSL’s licence. NZTA proposed to revoke SSL’s licence on the basis that the two directors of SSL, Stan Semenoff and his son, Alexander Semenoff, together with the general manager of SSL, Daron Turner, were not fit and proper persons to have control of the transport service.

[7]                  In response, on 14 September 2018, SSL wrote to NZTA making submissions in response to the notice. In particular, SSL identified that:

(a)The ORS run by NZTA provided an accurate assessment of an operator’s risk to road safety, with SSL’s ORS scores demonstrating that it had continually improved since the 2016 audit and was currently considered to have a “good level of compliance”.

(b)That speeding had been addressed by the installation of equipment preventing acceleration beyond 90 kilometres an hour on 95 per cent of its fleet, and by emphasising the importance of not speeding at health and safety meetings and in SSL’s text message distribution system; and

(c)The commitment to health and safety by the persons in control (evidenced by records of awards in this regard) and reputation as highly respected people within the health and safety space and logging industry.

[8]                  On 29 January 2019, NZTA wrote to SSL providing an “alternative analysis” of GPS data reviewed as part of the 2017 audit. The alternative analysis identified periods where vehicles were stationary in the forest and opined, that as drivers were

required to comply with the Approved Code of Practice for Safety and Health in Forest Operations (code), those stationary periods could not amount to rest time.

[9]On 15 February 2019, SSL responded to NZTA, noting that:

(a)The code was considered best practice, though not mandatory and did not contain any actions haulage drivers were required to take in the forest. Therefore, NZTA’s conclusion, in the alternative analysis, that drivers could not be taking rest times was incorrect; and

(b)Of the eight drivers whose log books were analysed by NZTA in the 2017 audit and in the alternative analysis, seven of them no longer worked for SSL.

[10]              On 15 March 2019, NZTA gave notice of its decision to revoke SSL’s licence with effect from midnight on 22 March 2019. The revocation decision was on the following grounds:

(a)The persons in control are not fit and proper persons having regard to public safety as there was:

(i)An alleged absence of reliable systems or processes within SSL to ensure compliance with the Land Transport Act 1998.

(ii)Alleged “pervasive log book issues among the drivers” of SSL evidencing this was not being addressed, with the “attitude to rest time” being driven by the company itself; and

(iii)SSL’s alleged “extensive transport-related offending history”, stating that speeding “appears to be tolerated”.

[11]              The revocation decision also noted that while NZTA took into account SSL’s good ORS rating, it is a “limited tool” which does not include all offences in creating a rating. NZTA also did not consider it relevant that seven of the eight drivers from the 2017 audit were no longer employed by SSL.

Grounds of review

[12]In its statement of claim, SSL alleges:

(a)The revocation decision was based on an error of law in concluding that SSL’s licence was to be revoked on the basis that persons in control of SSL were not fit and proper persons.

(b)In making the revocation decision, NZTA had failed to take into account relevant considerations.

(c)In making the revocation decision, NZTA took into account irrelevant considerations; and

(d)NZTA’s finding that the persons in control are not fit and proper persons. It is a decision that no reasonable decision-maker could have reached given the evidence before it.

[13]              Substantial particulars of the grounds of review have also been provided. It is unnecessary to list them, but on my initial review of them, SSL certainly has an arguable case that NZTA fell into error through the decision-making process. It is arguable that NZTA misconstrued s 30C of the Act, and in determining that the persons in control were not fit and proper persons, it relied on general alleged failures of SSL as a corporate entity without considering whether each of the individual persons in control was, in fact, responsible for SSL’s alleged failures.

NZTA’s position

[14]              NZTA opposes the application for interim orders. It has yet to file a notice of opposition and any affidavits in support of a notice of opposition.

[15]              However, in a brief memorandum, counsel for NZTA submits that while the Court has the power to grant interim relief, it should only do so in exceptional circumstances given that s 106(3) of the Land Transport Act 1998 specifically provides that no stay of a decision is available pending an appeal.

[16]              He also submits that any hardship caused to SSL through the revocation of its licence cannot outweigh the risks to public safety occasioned by its continued operation.

Discussion

[17]              Although the Land Transport Act does not contain a provision for interim relief, that reflects the nature of an appeal. Judicial review of administrative decisions is a completely separate jurisdiction, which relates not so much to the substantive decision itself, but to the decision-making process. Here, SSL alleges that NZTA misinterpreted the law, failed to take relevant considerations into account and wrongly took irrelevant considerations into account. It also alleges that the revocation decision was so unreasonable, no reasonable decision-maker could have made it. These proceedings are not an appeal.

[18]              I acknowledge that, although the test in s 15 of the Judicial Review Procedure Act 2016 is whether an interim order is necessary to preserve the position of the applicant, the Court does need to consider the risks to public safety occasioned by SSL’s continued operation in the exercise of the Court’s discretion to grant an order.

[19]              In his affidavit evidence, Alexander Semenoff maintains that SSL does not tolerate speeding and it utilises a radar speed gun to randomly monitor driver speeds on rural roads. He also points to SSL’s ORS rating, which amounts to a good level of compliance and says that SSL has taken steps in response to NZTA’s prior audits, as evidenced by the action plans it provided to NZTA.

[20]              In my mind, I attach some significant NZTA’s own ORS rating of SSL. NZTA describes operator safety ratings as indicating an operator’s level of compliance with Land Transport Safety legislation and therefore their safety risk, based on the results of safety events. Events included in operator safety ratings are certificates of fitness inspections, roadside inspections, and certain types of offending.

[21]              The ratings are calculated in accordance with the Land Transport Rule: Operator’s Safety Rating 2008. SSL’s overall score is said to be 1.179, which falls comfortably within the overall score range of 0.5 to 2.1, which is described by NZTA

as a good level of compliance. As part of that score, SSL had a pass rate in testing stations of 93 per cent, a roadside pass rate of 68 per cent and nine traffic offences in the two year period between 1 July 2016 and 30 June 2018.

[22]              I am also advised that there has never been a fatigue related incident since the period of NZTA’s 2016 audit. Despite the size of its fleet, SSL has never had any road traffic incidents causing injury in the period since it has been trading. I am also advised that SSL has had only three non-serious accidents in which no injuries were sustained since the period of the 2016 audit, though none of the drivers responsible presently work for the company.

[23]              On the other hand, immediate revocation of SSL’s licence would be catastrophic. The employment of 55 people would have to be terminated if SSL was no longer able to operate. Contracts with suppliers and logging operators would be frustrated. Business would go elsewhere. If it was successful in its judicial review application, SSL would, nonetheless, find it extremely difficult to recover its lost business.

Result

[24]              I am of the view that SSL’s application for judicial review is arguable and an interim order is necessary to preserve its position.

[25]              I therefore direct that the coming into force of the notice of revocation of the Transport (Goods) Service Licence Number 0249950 issued to Stan Semenoff Logging Limited served by the respondent on the applicant is to be suspended until further order of the Court.

[26]              The interim order now granted to SSL is subject to the following conditions, which were proposed by NZTA and accepted by SSL:

(a)SSL is to nominate a person to conduct daily checks of the driver log book forms received, including comparing the log books to the GPS data and/or weigh dockets for the relevant vehicle. SSL is required to notify NZTA within 24 hours of any identified breaches of the Land

Transport Act or Land Transport Rule: Work Time and Log Books 2007.

(b)Daily checks of the log books to be recorded on SSL’s copy of the log book and copies of these, the GPS records and corresponding pay slips for the driver to be provided to NZTA on a weekly basis.

(c)SSL to notify NZTA within 24 hours of any traffic offences or any non- compliance detected by Police, including accidents, speeding infringements and roadside inspection failures.

(d)SSL to notify NZTA within 24 hours of any speeding alarms detected by the speed limitation systems or any instances where the GPS reports/records have identified vehicles which have exceeded 90 kilometres an hour and to confirm what disciplinary action will be taken against the relevant driver.

[27]              Leave is reserved to NZTA to return to Court within 48 hours of any breaches of these conditions.

[28]              As also indicated, I give leave to counsel for the NZTA to file a memorandum within seven days of today’s date, advising the Court of his instructions as to progression of the application for judicial review and the application for interim orders.

Woolford J