Stevryn Holdings Limited v Waka Kotahi New Zealand Transport Agency
[2021] NZHC 2099
•12 August 2021
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2021-409-000354
[2021] NZHC 2099
BETWEEN STEVRYN HOLDINGS LIMITED
Applicant
AND
WAKA KOTAHI NEW ZEALAND TRANSPORT AGENCY
Respondent
Hearing: On the papers Judgment:
12 August 2021
JUDGMENT OF NATION J
[1] The applicant (Stevryn) operates a road freight transport business with four vehicles. It has five full-time employees and one part-time employee.
[2]On 4 September 2020, the respondent (Waka Kotahi) served Stevryn with:
(a) a notice of requirement for certificate of fitness inspections of vehicles at intervals of three months; and
(b) a notice of improvements needed.
[3] Waka Kotahi served Stevryn with a notice of proposal, dated 11 December 2020, to revoke Stevryn’s Transport (Goods) Service Licence number 0319893 on grounds, in summary, that:
(a) Stevryn was not a fit and proper person to hold its licence for the purposes of the Land Transport Act 1998; and
STEVRYN HOLDINGS LTD v WAKA KOTAHI NEW ZEALAND TRANSPORT AGENCY [2021] NZHC 2099 [12 August 2021]
(b) the sole director at the time was not a fit and proper person to be in charge of Stevryn.
[4] On 1 February 2021, the then sole shareholder and director of Stevryn stepped down from his position. His son (Mr MacDonald), who has worked in different roles in the transport industry since 1992, became the sole director and shareholder of Stevryn. He was appointed as director on 1 February 2021.
[5] On 10 February 2021, Mr MacDonald emailed submissions to Waka Kotahi, on behalf of Stevryn, in response to the notice of proposed revocation of licence.
[6] On 2 August 2021, Stevryn received a notice of final decision to revoke Stevryn’s Transport (Goods) Service Licence to take effect from 12.00 midnight on 12 August 2021. The notice letter was dated 30 July 2021.
[7] Stevryn disagrees with the revocation decision. It has filed in the District Court an appeal against the revocation decision.
[8] In the High Court, Stevryn has filed a statement of claim for judicial review, an application for interim relief on notice, and an application for interim relief without notice.
[9] This judgment concerns the application for interim relief without notice and is made on the papers.
[10] I have read the various notices served on Stevryn by Waka Kotahi and seen the information the agency had, which was of serious concern to Waka Kotahi. I have carefully read the reasons for the decision revoking Stevryn’s licence. I have also considered the information provided by Mr MacDonald in his affidavit as to the background to Stevryn’s present situation, the various difficulties it has faced with its transport operations, its financial challenges, and Mr MacDonald’s efforts to deal with those challenges since taking over control of the business.
[11] There are grounds for review set out in the statement of claim, at least some of which appear to be seriously arguable, including that:
(a) the decision placed undue weight on factors that do not directly relate to public safety (it referred to unpaid fines and road user charges);
(b) the decision took account of irrelevant factors, including unfounded factual assertions. (The decision appears to have been influenced by the fact that, in the presence of a Waka Kotahi inspector, a driver took an unwarranted vehicle onto a public road. There is an implicit rejection of the explanation given at the time, and now supported by affidavit, that the vehicle was taken onto the road for the purpose of turning it around so it could be driven into the workshop to undergo repairs; and
(c) the decision failed to take account of all relevant factors, namely efforts the company was making to improve its operations so as to meet the expectations of Waka Kotahi.
[12] It would seem from Mr MacDonald’s affidavit that Stevryn is at a crucial point in determining whether it has a future as a transport business and what that business will be. The company is in the process of refinancing debt. It is looking to move from its present business premises. It has received advice from an appropriate expert associated with the Road Transport Association New Zealand that it may need to down-size the number of vehicles it operates, potentially to have fewer but a more modern and better quality of vehicle. There is some prospect of it re-establishing a business relationship with a former customer. This could provide business for the company that would assist in ensuring long term financial sustainability.
[13] Since taking over control of Stevryn’s business, Mr MacDonald has made a number of improvements to operation matters. He has administrative assistance from someone with previous experience in the transport industry who has been able to implement and/or recommend improvements to administrative procedures that, if followed, would lead to better maintenance of vehicles and better compliance with transport regulations. Vehicles are being fitted with Navman e-road units so the performance of trucks and drivers can be better monitored. Waka Kotahi acknowledge that maintenance of vehicles has improved since the requirement for more frequent certificate of fitness checks was implemented. With the change in ownership and
control of the business, they no longer referred to their concerns over the previous person in charge of the business as grounds for revocation.
[14] The issues of concern to Waka Kotahi remain serious but Stevryn says it is committed to addressing those concerns and has taken steps to do so.
[15] If the revocation of licence takes effect, it will effectively bring the business to an end. It is unlikely the attempts to refinance company debt would be successful. Most, if not all, of the five full-time employees and part-time mechanic would have to be made redundant.
[16] The company has approximately 49 bookings for transport jobs between 11 August 2021 and 30 September 2021. Not only would it lose the income from those jobs, it could also lose future business from the people or businesses that have made those bookings.
[17] On the basis of what I have read, my assessment is that the safety issues are not of such immediate or intense concern that Stevryn’s business operations must immediately be brought to an end, If they do continue, Stevryn will have to ensure that all vehicles are safe to operate and are operated in accordance with the relevant rules.
[18] I consider, if the revocation of licence was to take effect at midnight on 12 August 2021, Stevryn’s rights of appeal and to seek judicial review of the decision would be rendered nugatory.
[19]On the application for interim relief without notice, I make orders:
(a) prohibiting Waka Kotahi from taking further action that is or would be consequential on the decision to revoke the applicant’s transport service licences until the on notice application for interim relief has been heard and ruled on by this Court;
(b) Stevryn’s Transport (Goods) Service Licence number 0319893 is deemed to continue in force until the on notice application for interim relief is determined;
(c) the on notice application for interim relief is to be set down for hearing (half day) on the soonest date the Court can make available after 15 October 2021;
(d) Stevryn is to file further affidavits, informing Waka Kotahi and the Court of how the business has been able to improve the standard of its business operations in accordance with Waka Kotahi’s expectations, between 11 and 13 October 2021;
(e) leave is reserved to Waka Kotahi to apply, on 48 hours’ notice, for a review of these orders if, as a result of any events or inspections that take place between now and the hearing of the on notice application, Waka Kotahi obtains new information that suggests there are further reasons for concern as to the safety of Stevryn’s transport operations; and
(f) costs on this application are reserved.
Solicitors:
Wynn Williams, Christchurch
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