LONGVILLE v NEW ZEALAND TRANSPORT AGENCY [2019] NZHC 1445

LONGVILLE v NEW ZEALAND TRANSPORT AGENCY [2019] NZHC 1445 [24 June 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-000725[2019] NZHC 1445BETWEEN DESMOND KRIS LONGVILLEApplicantAND NEW ZEALAND TRANSPORT AGENCYRespondentHearing: 13 June 2019Appearances: S Khan for ApplicantK V Mills and K M Fitzgibbon for RespondentJudgment: 24 June 2019JUDGMENT OF WYLIE JThis judgment was delivered by Justice WylieOn 24 June 2019 at 4.00 pmPursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors/counsel:Fortune Manning, AucklandMeredith Connell, AucklandIntroduction[1] The applicant, Desmond Longville, is a transport operator. The respondent,the New Zealand Transport Agency (the NZTA), has revoked Mr Longville's transportservice licence, number 18699. It has also declined an application made by DKLProjects Ltd (DKL) – a company with which Mr Longville is associated – for atransport service licence. Both decisions have been appealed to the District Court.They are for call in that Court on 19 July 2019. Mr Longville has also applied for ajudicial review of the decision to revoke his transport services licence, but not of thedecision declining the grant of a licence to DKL.[2] On 26 April 2019, Peters J considered an urgent interim application, made byMr Longville without notice but on a Pickwick basis. The application sought an orderpursuant to s 15(2)(c) of the Judicial Review Procedure Act 2016. Peters J orderedthat Mr Longville's licence was to continue in force pending further order of the Court.She also directed that the NZTA was to refrain from taking any further action to revokethe licence, again pending any further order of the Court. She directed that the matterwas to be called in the judicial review list on 2 May 2019.1[3] NZTA then filed a notice of opposition to Mr Longville's application. Thematter came before Palmer J on 2 May 2019. He put in place a timetable to set theapplication down for hearing. He continued the interim relief granted by Peters J, oncondition that the transport services licence be operated only by Mr Longville, and notby DKL.2[4] Mr Longville is asking the Court to continue the interim order pending finaldetermination of either his application for review, or his appeal against the revocationof his licence in the District Court. The NZTA is opposed to the order sought.1 Longville v The New Zealand Transport Agency HC Auckland CIV-2019-404-725, minute of 26April 2019.2 Minute of 2 May 2019.Relevant factual background[5] A number of affidavits have been filed. What follows is very much a truncatedsummary of the factual background.[6] Mr Longville has held a transport services licence for approximately 30 years.In the late 1990s he became involved in the earth moving and demolition business andhe formed a company for this purpose. It got into financial difficulties and it ceasedto trade. In around 2013 Mr Longville started afresh trading as DKL. The companycarries out demolition and earth moving services for which a transport services licenceis required. It does not however hold a licence in its own right. Rather, it has operatedunder Mr Longville's licence. Mr Longville now, and rather belatedly, accepts thatDKL requires a transport services licence in its own name if it is to operate thetransport service itself.[7] Mr Longville is the sole director of DKL and he has acted as its generalmanager. I do not know whether he is also its sole shareholder.[8] DKL operates heavy motor vehicles to transport demolition equipment to, anddetritus from, construction sites. It operates 12 heavy motor vehicles and hasapproximately 50 vehicles and items of plant. It is a member of the AucklandDemolition Contractor Panel for Housing New Zealand. It also has a contact withWaste Management Ltd to carry treated solid waste in the Auckland area. In 2018,DKL had revenue in excess of $5.6 million, with a wage bill of some $1.3-$1.6 million.Mr Longville asserts that DKL is a significant contributor to the local economy, andthat it had 27 employees.[9] Mr Longville says that he was unaware that DKL had to hold a transportservices licence in its own name until May 2018. He says that this was only madeclear to him after a police officer, who had carried out a roadside inspection of one ofDKL's vehicles, contacted him and explained the position. NZTA, for its part, saysthat it had previously advised Mr Longville of the relevant licensing requirements,first in 2015, and again in 2016. It has produced copies of the relevant correspondence.Mr Longville seeks to explain this correspondence away. In any event, in May 2018,Mr Longville caused DKL to apply for a transport services licence.[10] On 2 July 2018, NZTA gave notice to Mr Longville advising that it proposedto decline DKL's application and also to revoke Mr Longville's transport serviceslicence. Mr Longville made detailed submissions in response through his solicitors.Those submissions were not accepted and the notices conveying the decisions referredto in [1] above were served on Mr Longville on 17 April 2019.[11] Mr Longville argues that, if he can retain his licence, his operation will nolonger be unlawful, because he has changed his operating model. He says he is nowthe registered owner of all the vehicles which previously belonged to DKL, and thatany work requiring a transport services licence is carried out either by him personally,as a sub-contractor to DKL, or by drivers he has hired from DKL. NZTA says thatMr Longville has not provided sufficient evidence to demonstrate that his currentbusiness model is being carried out as he asserts. It says that, in the absence ofappropriate evidence, the Court cannot be satisfied as to the lawfulness of thearrangements proposed.Statutory framework/relevant case law[12] Relevantly, s 15 of the Judicial Review Procedure Act provides as follows:15 Interim orders(1) At any time before the final determination of an application, the courtmay, on the application of a party, make an interim order of the kindspecified in subsection (2) if, in its opinion, it is necessary to do so topreserve 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 thatis, or would be, consequential on the exercise of the statutorypower:(c) declaring that any licence that has been revoked or suspendedin the exercise of the statutory power, continues and, wherenecessary, that it be deemed to have continued in force.[13] The purpose of s 15 is to give protection on an interim basis to an applicantwho may otherwise be unfairly prejudiced by the delays involved in obtaining a finaldetermination of his or her application for review.3 There must be a "necessity", ascontrasted with a simple desire, to preserve a position.4 It is not appropriate to addany gloss to the word "necessary" or to attempt to define it in other words.5 It is clearfrom the section that the Court has a wide residual discretion to grant interim reliefeven if an order is necessary to preserve the position of an applicant.[14] A factor which will likely be relevant to the exercise of the discretion will bethe availability or otherwise of a right of appeal in respect of the impugned decision.[15] Here, s 106 of the Land Transport Act 1988 provides that any person who isdissatisfied with any decision made under the Act by the NZTA in respect of the grant,issue, revocation or suspension of a land transport document sought or held by thatperson, may appeal to the District Court against that decision. The District Court isgiven power to confirm, reverse or modify the decision appealed against. Relevantly,s 106(3) provides as follows:(3) Every decision of the [NZTA] appealed against under this sectioncontinues in force pending the determination of the appeal, and noperson is excused from complying with any of the provisions of thisAct on the ground that any appeal is pending.[16] In the present case, and as noted, Mr Longville filed an appeal against therevocation of his licence in the District Court at Auckland on 30 April 2019.[17] The effect of s 106(3), was considered by the Court of Appeal in Director ofCivil Aviation v Air National Corporate Ltd.6 In that case, the Director of CivilAviation had suspended an air operator's certificate held by Air National CorporateLtd. Air National had appealed the Director's decision to the District Court and alsofiled an application for review. It sought interim relief under what was then s 8 of theJudicature Amendment Act 1972 until the review application was determined. Interimrelief was granted by the High Court. On appeal the Director accepted that the interimorder sought by Air National was necessary to preserve its position. The Court noted3 Woodhouse v Auckland City Council (1984) 1 PRNZ 6 (HC).4 Bishop v Central Regional Health Authority HC Palmerston North N47/97, 11 July 1997.5 Carlton & United Breweries Ltd v Minister of Customs [1986] 1 NZLR 423 (CA).6 Director of Civil Aviation v Air National Corporate Ltd [2011] NZCA 3, [2011] NZAR 152.that the relevant statutory provisions and accepted that the High Court had hadjurisdiction to make the interim order. The Court stated as follows:[30] courts do need to be cautious in this context. As we have said, theeffect of statutory provisions such as s 106(3) of the Land Transport Act isto deprive the District Court of the power to grant a stay on an appeal incircumstances where otherwise it would have had that power. Too ready aresort to s 8 runs the risk of undermining such prohibitions and creating anincentive for appellants to launch judicial review proceedings simply to accessthe High Court's s 8 jurisdiction. At the very least, this will be a relevantconsideration to the exercise of the discretion. The Court of Appeal was dealing with the matter on an urgent basis, and it expresslynoted that this view was only its preliminary view. The Court nevertheless noted thatthe Director had been required to assess whether, given the information before him,and his knowledge of Air National's performance, it was necessary in the interests ofsafety to order suspension of Air National's licence. The Court did not consider thatAir National had demonstrated that it had a strong case that the decision to suspend itslicence was not reasonably open to the Director or was irrational. Accordingly, it heldthat the interim order made under s 8 should not have been granted.[18] In Foreman Automotive Ltd v New Zealand Transport Agency,7 Katz J, insummarising the approach to the grant of interim relief in such cases, stated as follows:[24] In summary, the approach involves two steps. First, the Court mustconsider whether the statutory threshold is met (that orders arenecessary to preserve the position of a party). Secondly, the Court hasa wide discretion as to whether the grant of relief is appropriate. Theexercise of that discretion will usually involve considering all of thecircumstances of the case. In this case the key considerations are thestrength of the judicial review claims, the particular statutory context,and the private and public repercussions of granting relief.[53] Parliament has set where the balance should be struck in "ordinary"cases. Public safety is paramount unless and until the Agency is shownto be wrong. It was to avoid undermining this statutory regime thatthe Court of Appeal in Air National urged caution in cases such asthis. This is a significant factor against the granting of interim reliefin this case.7 Foreman Automotive Ltd v New Zealand Transport Agency [2013] NZHC 1167, [2014] NZAR260.[19] In a more recent decision – McCrostie Trucking Ltd v New Zealand TransportAgency8 – Gendall J accepted that the applicant in that case had an arguable case forjudicial review, and that revocation would be likely to cause hardship in the interim.However, the Judge declined to grant interim relief. He stated as follows:[50] Previous cases make it clear that interim relief of this nature will onlybe given in exceptional circumstances. Parliament's prohibition oninterim relief pending a District Court appeal shows that the NZTA'sdecisions are to be given great respect by the courts.[51] I do not consider that the hardship the Company faces as a result ofthe revocation of its Licence and its chances of success in its judicialreview are sufficient to outweigh the risk its continued operation posesto public safety. Therefore, interim relief is not appropriate.Analysis(a) Is interim relief necessary to preserve Mr Longville's position?[20] Mr Longville submits that a refusal to grant interim relief would becatastrophic for him, DKL and its employees. He has deposed that DKL would likelyfail before the substantive judicial review proceedings and the District Court appealscould be heard.[21] NZTA accepts that revocation of Mr Longville's licence will have an impacton DKL's functioning. It acknowledges that there is a potential loss of employmentto DKL's employees. It also acknowledges Mr Longville's evidence that variouspersonal guarantees he has given o DKL's performance will likely be called up. Itnevertheless argues that the impact will not be as severe as Mr Longville asserts.[22] Having considered the available evidence, I accept that an interim order isnecessary to preserve Mr Longville's position. The evidence is that Mr Longville andDKL are inextricably intertwined. For that reason, I consider DKL's position as well,even though it is not the applicant seeking judicial review. DKL has already had toterminate the employment of five of its drivers as a result of the uncertaintysurrounding the business's future. I accept that if the interim orders are not continued,DKL will have to terminate the employment of most of its other employees, because8 McCrostie Trucking Ltd v New Zealand Transport Agency [2018] NZHC 2736.its road transport business will have to come to an end. The evidence is that the roadtransport business is critical to the survival of DKL, and that the use of subcontractorsto carry out the transport work would make the business unprofitable and put DKL'svarious contracts at risk. Mr Longville has given personal guarantees to supportDKL's various financial obligations. He has deposed that he cannot personally meetthe obligations of DKL pending a final decision either on appeal or review.(b) The discretion – is the grant of interim relief appropriate?[23] Mr Khan, appearing on behalf of Mr Longville, referred to NZTA's decision.He argued that it is based on Mr Longville's traffic infringement and fines history. Hesubmitted that there is no allegation that Mr Longville has failed to maintain his orDKL's vehicles to a safe standard. He noted that there are no issues raised with logbooks, or the working times of drivers, and that there have been no serious accidentsinvolving drivers engaged by Mr Longville or DKL. He submitted that the risk topublic safety is minimal. He referred to the timeframe – noting that Mr Longvillemade application for a transport services licence for DKL in May 2018, that theapplication was only advanced on 2 July 2018, and that the final decision was notmade until 17 April 2019. He noted the delay, and argued that if public safety was ofparamount concern, the NZTA would have moved rather more quickly.[24] Ms Mills, for the NZTA, pointed to s 30C of the Act, which requires it, whendetermining whether someone is a fit and proper person to hold a transport serviceslicence, to have regard to any offending by the person in respect of transport relatedmatters, including any infringement notices. She did not accept that Mr Longville's(and DKL's) convictions for speeding, and for operating vehicles not up to inspectionstandard, does not impact on public safety. She argued that it cannot be a requirementthat the NZTA must wait for a serious accident or injury to incur before it can takecompliance action.[25] I have considered the application for review. Mr Longville pleads:(a) that NZTA took into account irrelevant considerations, and that itimproperly elevated public safety concerns beyond the actual riskposed by the offences committed;(b) that the NZTA failed to properly engage with him prior to taking actionto revoke his licence, and that it breached its own prosecution policyand the requirements of natural justice;(c) that NZTA's decision to revoke his licence was a disproportionateresponse to the matters relied on by NZTA, and unreasonable in all thecircumstances; and(d) that NZTA relied on an incorrect interpretation of "the chain ofresponsibility provisions" said to be contained in the Land TransportAct, and that NZTA's approach to the public safety risk was an error oflaw.[26] NZTA takes issue with each of these various grounds of review, although it isyet to file a statement of defence to the statement of claim.[27] I am not persuaded that the application for review is entirely without merit. Tomy mind, some of the grounds advanced are arguable. While Mr Longville does havesome 60 traffic infringements, they cover the period 1986-2018. Many are historical,although some are much more recent. Issues of manifest unreasonableness may arise.[28] That Mr Longville has also appealed the decision to revoke his licence is notfatal to his application for relief. The fact that an appeal on the merits is available doesnot necessarily preclude an application for review in appropriate cases, although it hasto be acknowledged that the availability of an appeal may well be a relevant factor inthe exercise of the discretion whether or not to grant relief if one or other of thegrounds of review can be made out.9[29] The matter of most concern is public safety. I accept the submissions made byMs Mills that it was incumbent on the NZTA to consider Mr Longville's history ofoffending in respect of transport related matters. I also accept that infringementnotices for speeding, for not having evidence of inspections of vehicles, and forvehicles not being up to certificate of fitness standard, impact on public safety. It is9 RL v The Chief Executive of the Ministry of Social Development [2009] NZCA 596 at [21].however also relevant that NZTA maintains (or at least until recently has maintained)an operator rating system, and that Mr Longville's most recent operator rating wasfour stars, which indicates a good level of compliance. Mr Longville's overall scoreon the operator rating system issued by NZTA in July 2018 was 1.9680. The score fora four star rating is between 0.50000 and 2.1041. In the period that the operator ratingsystem information covers, Mr Longville achieved an 85 per cent pass rate for allcertificate of fitness inspections. While NZTA has more recently stated that theoperator rating system should not be relied on as a measure of safety and compliance,and that in some cases, a rating score may not accurately reflect the operator's safetyand compliance, in my judgment, the fact that Mr Longville has recently achieved agood level of compliance assists him. So also do the various steps that he and DKL'smanager, Kenneth Gardiner, depose have recently been taken to improve safetyconcerns.[30] The delay in revoking Mr Longville's licence by NZTA also tells in favour ofgranting interim relief. It suggests that public safety concerns are not as urgent asmight otherwise be thought.[31] Further, in my view, NZTA's public safety concerns can be met by a series ofconditions attaching to the grant of any interim relief. If those conditions are breached,it will be open to the NZTA to apply for a review of the interim orders.[32] I accept that the NZTA has concerns about Mr Longville's present operations.It does not accept that Mr Longville is currently complying with the Act, and it arguesthat his current operation is still unlawful. In the course of discussions, Ms Millshowever properly accepted that I could not be expected to rule on that issue given thelimited and conflicting materials before me. She also accepted that it is open to theNZTA to audit Mr Longville's operation under s 198 of the Act. Any person to whoma requirement notice is given under that section must comply with it, and if the NZTAstill considers that there is a breach of the Act, it can if necessary prosecute.[33] In summary, I am satisfied, albeit by a fine margin, that it is appropriate todirect that the interim order put in place by Peters J and amended by Palmer J remainsin place pending the final determination of either the application for review orMr Longville's appeal against the revocation of his licence to the District Court. It ishowever also appropriate to impose conditions, in the interests of public safety andreasonable expedition. Nothing in these conditions should be read as an indicationthat Mr Longville's operation of his transport licence to conduct the business of DKLis lawful. The conditions are as follows:(a) Mr Longville must notify the NZTA within 24 hours of any trafficinfringements, offences or convictions incurred, including thosereceived personally, and those received by DKL. This disclosure mustbe made irrespective of whether Mr Longville/DKL intends to apply totransfer the infringements from DKL/Mr Longville to the driverpersonally. Notification must be made by email to tsl@nzta.govt.nz.(b) Using GPS units (such as those referred to at paragraph 19 ofMr Longville's affidavit of 8 May 2019), Mr Longville must monitorthe speed of all drivers to ensure compliance with road safety rules, andreport to the NZTA within 24 hours any instances of drivers exceedingthe maximum speed limit. Notification must be made by email totsl@nzta.govt.nz. Details of the GPS system being used to monitordrivers must be provided to the NZTA within three working days of thisorder being made by email to tsl@nzta.govt.nz.(c) Mr Longville must develop and implement within 21 working days atraining course for all drivers employed by or contracting forMr Longville personally, or DKL. This training must cover theimportance of driving at a safe speed, and vehicle maintenance,including the importance of up to date certification. Mr Longville mustprovide full details of this training to the NZTA as soon as is practicableand in any event no later than 21 working days after this order.(d) Mr Longville must provide the NZTA, within three working days, witha copy of Mr Longville's and DKL's existing procedures for speed anddisciplinary measures for traffic offending. Mr Longville must alsoprovide the NZTA with details of any future planned procedures inthese areas. These documents should be provided by email totsl@nzta.govt.nz.(e) Mr Longville must provide the NZTA, within three working days, witha list of the full names and driver licence number of all driversemployed by or contracting for Mr Longville or DKL. Mr Longvillemust update the NZTA of any changes to this list within 24 hours. Thelist and any changes to the list should be provided by email totsl@nzta.govt.nz.(f) Mr Longville is to take all reasonable steps, and cooperate with theNZTA, in preparing for a hearing of the application for review, and heis to accept the first available fixture date that shall be given to him forthat application.(g) Leave is reserved to the NZTA to bring this matter back before theCourt on three working days' notice if there is any breach of theseconditions.[34] I direct that the application for review is to be placed in the Judicial ReviewList, for call, at the first reasonably available opportunity, following release of thisjudgment.______________________________Wylie J