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

STAN SEMENOFF LOGGING LIMITED v NEW ZEALAND TRANSPORT AGENCY [2019] NZHC 541 [22March 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-000480[2019] NZHC 541UNDER the Judicial Review Procedure Act 2016IN THE MATTER of decisions made pursuant to the LandTransport Act 1998BETWEEN STAN SEMENOFF LOGGING LIMITEDPlaintiffAND NEW ZEALAND TRANSPORT AGENCYDefendantHearing: 22 March 2019Appearances: S Corlett and EID Fox for the PlaintiffR McCoubrey and J Phillips for the DefendantJudgment: 22 March 2019JUDGMENT OF WOOLFORD JSolicitors: Meredith Connell (Office of the Crown Solicitor), AucklandBrookfields Lawyers, Auckland[1] On 15 March 2019, the New Zealand Transport Agency ("NZTA") revoked theTransport (Goods) Services Licence ("licence") issued to Stan Semenoff LoggingLimited ("SSL") with effect from Friday, 22 March 2019.[2] On 20 March 2019, SSL filed a statement of claim under the Judicial ReviewProcedure Act 2016 challenging the NZTA decision, seeking a declaration that thedecision 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 finaldetermination of its application for judicial review, NZTA be prevented from revokingits licence. SSL has also filed an appeal in the District Court at Auckland against theNZTA decision.Background[3] SSL is a logging haulage company based in Whangarei. It is the largest logginghaulage company in Northland and is responsible for 50 per cent of Northland's woodflow and log haulage. SSL's sole business involves the transportation of loggingmaterial 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 hascontracts with over 25 companies, including suppliers and logging operatorsthroughout Northland.[4] According to NZTA's decision, it conducted an audit of SSL in 2016 becauseof 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 logbooks, 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 partof the analysis of the eight driver's log books, GPS records and timesheets in the 2017 audit.(c) Alleged speeding compliance issues NZTA had identified by SSL'soperator rating system (ORS) score, traffic offence reports, speedcamera reports and GPS data; and(d) NZTA's view that there was a "high percentage of vehicles failing onbrake system faults".[6] On the same day, NZTA also served on SSL a notice of its proposal to revokeSSL's licence. NZTA proposed to revoke SSL's licence on the basis that the twodirectors of SSL, Stan Semenoff and his son, Alexander Semenoff, together with thegeneral manager of SSL, Daron Turner, were not fit and proper persons to have controlof the transport service.[7] In response, on 14 September 2018, SSL wrote to NZTA making submissionsin response to the notice. In particular, SSL identified that:(a) The ORS run by NZTA provided an accurate assessment of anoperator's risk to road safety, with SSL's ORS scores demonstratingthat it had continually improved since the 2016 audit and was currentlyconsidered to have a "good level of compliance".(b) That speeding had been addressed by the installation of equipmentpreventing acceleration beyond 90 kilometres an hour on 95 per cent ofits fleet, and by emphasising the importance of not speeding at healthand 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 highlyrespected people within the health and safety space and loggingindustry.[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 identifiedperiods where vehicles were stationary in the forest and opined, that as drivers wererequired to comply with the Approved Code of Practice for Safety and Health in ForestOperations (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 didnot contain any actions haulage drivers were required to take in theforest. Therefore, NZTA's conclusion, in the alternative analysis, thatdrivers could not be taking rest times was incorrect; and(b) Of the eight drivers whose log books were analysed by NZTA in the2017 audit and in the alternative analysis, seven of them no longerworked for SSL.[10] On 15 March 2019, NZTA gave notice of its decision to revoke SSL's licencewith effect from midnight on 22 March 2019. The revocation decision was on thefollowing grounds:(a) The persons in control are not fit and proper persons having regard topublic safety as there was:(i) An alleged absence of reliable systems or processes within SSLto ensure compliance with the Land Transport Act 1998.(ii) Alleged "pervasive log book issues among the drivers" of SSLevidencing this was not being addressed, with the "attitude torest 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'sgood ORS rating, it is a "limited tool" which does not include all offences in creatinga rating. NZTA also did not consider it relevant that seven of the eight drivers fromthe 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 thatSSL's licence was to be revoked on the basis that persons in control ofSSL were not fit and proper persons.(b) In making the revocation decision, NZTA had failed to take intoaccount relevant considerations.(c) In making the revocation decision, NZTA took into account irrelevantconsiderations; and(d) NZTA's finding that the persons in control are not fit and properpersons. It is a decision that no reasonable decision-maker could havereached given the evidence before it.[13] Substantial particulars of the grounds of review have also been provided. It isunnecessary to list them, but on my initial review of them, SSL certainly has anarguable case that NZTA fell into error through the decision-making process. It isarguable that NZTA misconstrued s 30C of the Act, and in determining that the personsin control were not fit and proper persons, it relied on general alleged failures of SSLas a corporate entity without considering whether each of the individual persons incontrol 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 ofopposition and any affidavits in support of a notice of opposition.[15] However, in a brief memorandum, counsel for NZTA submits that while theCourt has the power to grant interim relief, it should only do so in exceptionalcircumstances given that s 106(3) of the Land Transport Act 1998 specifically providesthat no stay of a decision is available pending an appeal.[16] He also submits that any hardship caused to SSL through the revocation of itslicence cannot outweigh the risks to public safety occasioned by its continuedoperation.Discussion[17] Although the Land Transport Act does not contain a provision for interimrelief, that reflects the nature of an appeal. Judicial review of administrative decisionsis a completely separate jurisdiction, which relates not so much to the substantivedecision itself, but to the decision-making process. Here, SSL alleges that NZTAmisinterpreted the law, failed to take relevant considerations into account and wronglytook irrelevant considerations into account. It also alleges that the revocation decisionwas so unreasonable, no reasonable decision-maker could have made it. Theseproceedings are not an appeal.[18] I acknowledge that, although the test in s 15 of the Judicial Review ProcedureAct 2016 is whether an interim order is necessary to preserve the position of theapplicant, the Court does need to consider the risks to public safety occasioned bySSL'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 nottolerate speeding and it utilises a radar speed gun to randomly monitor driver speedson rural roads. He also points to SSL's ORS rating, which amounts to a good level ofcompliance and says that SSL has taken steps in response to NZTA's prior audits, asevidenced by the action plans it provided to NZTA.[20] In my mind, I attach some significant NZTA's own ORS rating of SSL. NZTAdescribes operator safety ratings as indicating an operator's level of compliance withLand Transport Safety legislation and therefore their safety risk, based on the resultsof safety events. Events included in operator safety ratings are certificates of fitnessinspections, 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 fallscomfortably within the overall score range of 0.5 to 2.1, which is described by NZTAas a good level of compliance. As part of that score, SSL had a pass rate in testingstations of 93 per cent, a roadside pass rate of 68 per cent and nine traffic offences inthe 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 theperiod of NZTA's 2016 audit. Despite the size of its fleet, SSL has never had any roadtraffic incidents causing injury in the period since it has been trading. I am alsoadvised that SSL has had only three non-serious accidents in which no injuries weresustained since the period of the 2016 audit, though none of the drivers responsiblepresently work for the company.[23] On the other hand, immediate revocation of SSL's licence would becatastrophic. The employment of 55 people would have to be terminated if SSL wasno longer able to operate. Contracts with suppliers and logging operators would befrustrated. Business would go elsewhere. If it was successful in its judicial reviewapplication, SSL would, nonetheless, find it extremely difficult to recover its lostbusiness.Result[24] I am of the view that SSL's application for judicial review is arguable and aninterim order is necessary to preserve its position.[25] I therefore direct that the coming into force of the notice of revocation of theTransport (Goods) Service Licence Number 0249950 issued to Stan SemenoffLogging Limited served by the respondent on the applicant is to be suspended untilfurther 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 logbook forms received, including comparing the log books to the GPSdata and/or weigh dockets for the relevant vehicle. SSL is required tonotify NZTA within 24 hours of any identified breaches of the LandTransport Act or Land Transport Rule: Work Time and Log Books2007.(b) Daily checks of the log books to be recorded on SSL's copy of the logbook and copies of these, the GPS records and corresponding pay slipsfor 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, speedinginfringements and roadside inspection failures.(d) SSL to notify NZTA within 24 hours of any speeding alarms detectedby the speed limitation systems or any instances where the GPSreports/records have identified vehicles which have exceeded 90kilometres an hour and to confirm what disciplinary action will be takenagainst the relevant driver.[27] Leave is reserved to NZTA to return to Court within 48 hours of any breachesof these conditions.[28] As also indicated, I give leave to counsel for the NZTA to file a memorandumwithin seven days of today's date, advising the Court of his instructions as toprogression of the application for judicial review and the application for interimorders._________________________Woolford J