Salters Cartage Limited v Accident Rehabilitation and Compensation Insurance Corporation

Decision No 159 /99 IN THE DISTRICT COURT DCA 231/98 HELD AT AUCKLAND BETWEEN SALTERS CARTAGE LIMITED Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION Respondent Date of Hearing: 1 June 1999 -- -- -- Date of Judgment: 22 June 1999 Counsel: Mr W Mccartney for Appellant Mr D Tui for Respondent RESERVED JUDGMENT OF JUDGE J D O'DONOVAN Solicitors: For Appellant Johnston Pritchard Fee & Partners DX CP24022 Respondent Background This is an appeal from the decision of Review Officer Mrs CJ Claridge Perry dated 7t May 1998. The issue can be helpfully summarised by reference to the following passages from the decision of the Review Officer:- "This application arises from the decision of the Corporation to assign the applicant company to the premium classification unit 96340 "waste disposal services"." "At the review hearing Mr Salter stated that his company was in the business of waste oil processing and not waste disposal. The company's revenue came when the oil was collected, not for the disposal of oil...." "Mr Salter pointed to the category of 25200: Petroleum and coal product manufacturing (recovery of lubricating oil and grease from used petroleum waste products) as the category he felt most appropriately described his company's business activities." "....However, Mr Salter emphasised that the company was not in the business of waste collection but of recovery, as without the recovery there would be no collection....." "For the corporation, Mr Lawson referred to his earlier submissions and emphasised that the corporation had identified two separate activities, that of waste disposal services and petroleum and coal product manufacturing, and this being the case, because of the lack of separate accounting for the two different activities, the higher premium classification, in this case that of waste disposal services, had to apply ....." The following further passage from the decision succinctly states the issue with which the review officer was concerned: "In summary, the position is that Salter's Cartage believes that it is in the business of oil recovery and not waste disposal. While their IJUDICIAL\ODONOVADECISION\SaltervACC.doc 2 business is part of the chain of disposal which the Milburn scheme was set up to achieve, nevertheless the business in which the company itself engages is recovery. Collection of waste is carried out, but this is subservient to the recovery business. The corporation's position is that Salter's cartage is a business comprising the two activities of waste disposal services and petroleum and coal product manufacturing, and as no separate records exist, the higher premium classification has to apply." The review officer concluded that the collection of the waste oil, "while it is clearly done for the purpose of recovery, is nevertheless ..... a separate activity in its own right." The Hearing Before Me ---- -- Two preliminary matters arose. These were as follows: 1 The review hearing commenced on 2 March 1998. At the conclusion of the hearing on that day the review officer requested the corporation's representative to provide her with some additional information as to which businesses were classified as waste disposal and which were classified as oil recovery and how the corporation distinguishes between the two. When the hearing resumed on 6 May 1998 it was expected that that information would be available but it was not in fact supplied, the corporation taking the view that privacy considerations prevented it disclosing the information which, in any event, it said, it was not obliged to provide. Mr Salter took the view that he had been unfairly disadvantaged as a result of the corporation adopting this approach to the matter. IJUDICIAL\ODONOVANDECISION\SaltervACC.doc 3 2 Again on 2 March 1998 at the conclusion of the hearing on that day Mr Salter left the hearing room but observed that the corporation representative had remained behind and was engaging the review officer in conversation. Mr Lawson formed the view that the conversation was about the case and, quite properly in my view, expressed concern that any such conversation should take place in his absence. Dealing with these matters in turn it seems to me: --- -- 1 It is regrettable that the corporation was not able to see its way clear to provide the information requested which in my view would have been helpful in assisting the review officer in deciding the matter. I agree with appellant's counsel that in effect what was being directed was discovery and in the absence of any right to claim privilege the respondent was obliged to provide the information and it may have been appropriate for a subpoena to issue to compel compliance with the review officer's request. Counsel submitted that the respondent's attitude was such that the Court would be justified in allowing the appeal on that basis alone. For my part, with respect, I doubt that that would be an appropriate way to approach the matter. The view that I take is that this case has to be decided on its own merits having regard to the evidence and the legal principles and that not much assistance is gained from an examination of the way in which the corporation has IJUDICIAL\ODONOVINDECISION\SaltervACC.doc dealt with the issue of classification in other cases not involving this appellant. As I observed at the hearing, the fact is that the corporation might very well have been wrong in all the other cases and it was not appropriate that the Court in this case should seek to determine that issue . 2 I am satisfied that nothing improper took place during the post-hearing discussion between the review officer and the corporation's representative. Nevertheless it is appropriate to comment that in this as in all cases of this nature the appearance of justice must be ---- -= maintained as well as the fact of justice. I intend no criticism of the review officer who was clearly simply responding to a request for clarification of the precise information which the corporation representative was being asked to provide. Nevertheless this example is a timely reminder to judicial officers that even in the relaxed environment of hearings pursuant to this statute it is essential that the appearance of justice and fair play be maintained. However it seems to me that despite the appropriate concern expressed by Mr Salter I am not helped in deciding the issue in this case by any further examination of this particular incident. Further Evidence Adduced At The Appeal Both parties sought and were granted leave to adduce further testimony. . In two important respects I was much assisted by this additional evidence: :JUDICIAL\ODONOVANDECISION\SaltervACC.doc 5 1 The opportunity to see and hear Mr Salter was helpful and assisted me in reaching the view that I have concerning the facts in this case. 2 In the course of giving his evidence Mr Salter produced a series of photographs of his company's premises. One large photograph provided a bird's eye of the plant. These photographs provided graphic testimony and, in my view, added considerable weight to the appellant's case. The Issue On Appeal The legal principles are clear and there was no, or little, dispute between counsel as to how these needed to be applied and the proper construction to be placed upon the statutory and regulatory provisions. I don't intend to discuss these in detail. They are helpfully dealt with, at some length, in the submissions of both counsel. The crux of the matter from the appellant's point of view is best described in paragraphs 4, 5 and 6 of Mr Mccartney's submissions dated 18 September 1998. The appellant's argument may be summarised as follows: 1 Salter's Cartage Limited's business activity is the reprocessing of waste oil and diesel. I:JUDICIAL\ODONOVANDECISION\SaltervACC.doc 6 2 That much seems to have been accepted by the review officer but she went on to find that the collection of the waste oil and diesel constituted a separate and distinct activity. 3 It was submitted that the collection of waste oil and diesel was, in terms of the 1995 and 1996 regulations, ancillary or subservient to the main activity of reprocessing, and did not form a distinct and independent activity of waste disposal. The respondent's case may be summarised as follows: 1 The appellant's activity is part of a Government sponsored oil recovery programme. It is a stand-alone scheme developed to dispose of used oil in a responsible fashion. A network of collection centres has been developed linked by a road and sea transport system. Plainly the collection of product is a highly organised and developed oil recovery programme. In short it is a collection system. Whilst it may be the case that reprocessing cannot take place until there has first been a collection, the act of collecting is a discrete process in itself. 2 The process carried out by the appellant at its plant is not a refining process or a manufacturing process but is a process whereby a small amount of value is added by a preliminary water separation system, and some contaminant removal. It is simply a physical clean up. :JUDICIAL\ODONOVADECISION\SaltervACC.doc 7 3 The review officer correctly recognised that the functions of waste oil collection and recovery were inter dependent but also correctly concluded that the activities were nevertheless separate activities. Decision In my view the issue was clearly one of fact. Was the need to collect waste oil simply ancillary to the main business of the appellant which, it was said, was essentially a refining process? Alternatively, were the two processes, collecting of waste oil on the one hand and some modest refining on the other, separate inter dependent functions of the same business? I have carefully considered the evidence. As stated above, I have been much assisted by the opportunity of seeing and hearing Mr Salter and as a result of seeing the photographic exhibits produced by him. I take the view that the business of Salter's Cartage Limited is that of recovery of petroleum products and that the collection of waste oil merely serves the recovery activity. I accept that the situation is as summarised in the following way in the decision of the review officer, namely: "..... The position is that Salter's Cartage .... is in the business of oil recovery and not waste disposal. While their business is part of the chain of disposal which the Milburn scheme was set up to achieve, nevertheless the business in which the company itself engages is recovery. Collection of waste is carried out, but this is subservient to the recovery business ...." JUDICIAL\ODONOVADECISION\SaltervACC.doc 8 No other conclusion, in my view, is consistent with the evidence. To suggest otherwise, in my view, is rather like saying that a baker who uses his own vehicle to uplit sacks of flour from a flour mill engages not only in the business of baking bread but also in the business of road haulage. The fact that one consequence of the appellant's business is to relieve other businesses of used oil does not mean, in my view, that it follows that the appellant is in the business of waste collection and disposal. Accordingly, I allow the appeal and find that the proper classification of this - - -- - business is that under 25200, petroleum and coal product manufacturing. The appellant shall be entitled to costs of $850 and travelling expenses of $30. (JD O'Donovan) District Court Judge IJUDICIAL\ODONOVANDECISION\SaltervACC.doc 9