STEVRYN HOLDINGS LTD v WAKA KOTAHI NEW ZEALAND TRANSPORT AGENCY [2021] NZHC 2099

STEVRYN HOLDINGS LTD v WAKA KOTAHI NEW ZEALAND TRANSPORT AGENCY [2021] NZHC2099 [12 August 2021]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2021-409-000354[2021] NZHC 2099BETWEEN STEVRYN HOLDINGS LIMITEDApplicantAND WAKA KOTAHI NEW ZEALANDTRANSPORT AGENCYRespondentHearing: On the papersJudgment: 12 August 2021JUDGMENT OF NATION J[1] The applicant (Stevryn) operates a road freight transport business with fourvehicles. 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 atintervals of three months; and(b) a notice of improvements needed.[3] Waka Kotahi served Stevryn with a notice of proposal, dated 11 December2020, to revoke Stevryn's Transport (Goods) Service Licence number 0319893 ongrounds, in summary, that:(a) Stevryn was not a fit and proper person to hold its licence for the purposesof the Land Transport Act 1998; and(b) the sole director at the time was not a fit and proper person to be in chargeof Stevryn.[4] On 1 February 2021, the then sole shareholder and director of Stevryn steppeddown from his position. His son (Mr MacDonald), who has worked in different rolesin the transport industry since 1992, became the sole director and shareholder ofStevryn. 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 revokeStevryn's Transport (Goods) Service Licence to take effect from 12.00 midnight on 12August 2021. The notice letter was dated 30 July 2021.[7] Stevryn disagrees with the revocation decision. It has filed in the District Courtan 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 withoutnotice.[9] This judgment concerns the application for interim relief without notice and ismade on the papers.[10] I have read the various notices served on Stevryn by Waka Kotahi and seen theinformation the agency had, which was of serious concern to Waka Kotahi. I havecarefully read the reasons for the decision revoking Stevryn's licence. I have alsoconsidered the information provided by Mr MacDonald in his affidavit as to thebackground to Stevryn's present situation, the various difficulties it has faced with itstransport operations, its financial challenges, and Mr MacDonald's efforts to deal withthose challenges since taking over control of the business.[11] There are grounds for review set out in the statement of claim, at least some ofwhich appear to be seriously arguable, including that:(a) the decision placed undue weight on factors that do not directly relate topublic safety (it referred to unpaid fines and road user charges);(b) the decision took account of irrelevant factors, including unfoundedfactual assertions. (The decision appears to have been influenced by thefact that, in the presence of a Waka Kotahi inspector, a driver took anunwarranted vehicle onto a public road. There is an implicit rejection ofthe explanation given at the time, and now supported by affidavit, that thevehicle was taken onto the road for the purpose of turning it around so itcould be driven into the workshop to undergo repairs; and(c) the decision failed to take account of all relevant factors, namely effortsthe company was making to improve its operations so as to meet theexpectations of Waka Kotahi.[12] It would seem from Mr MacDonald's affidavit that Stevryn is at a crucial pointin determining whether it has a future as a transport business and what that businesswill be. The company is in the process of refinancing debt. It is looking to move fromits present business premises. It has received advice from an appropriate expertassociated with the Road Transport Association New Zealand that it may need todown-size the number of vehicles it operates, potentially to have fewer but a moremodern and better quality of vehicle. There is some prospect of it re-establishing abusiness relationship with a former customer. This could provide business for thecompany that would assist in ensuring long term financial sustainability.[13] Since taking over control of Stevryn's business, Mr MacDonald has made anumber of improvements to operation matters. He has administrative assistance fromsomeone with previous experience in the transport industry who has been able toimplement and/or recommend improvements to administrative procedures that, iffollowed, would lead to better maintenance of vehicles and better compliance withtransport regulations. Vehicles are being fitted with Navman e-road units so theperformance of trucks and drivers can be better monitored. Waka Kotahi acknowledgethat maintenance of vehicles has improved since the requirement for more frequentcertificate of fitness checks was implemented. With the change in ownership andcontrol of the business, they no longer referred to their concerns over the previousperson in charge of the business as grounds for revocation.[14] The issues of concern to Waka Kotahi remain serious but Stevryn says it iscommitted 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 toan 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 tobe made redundant.[16] The company has approximately 49 bookings for transport jobs between 11August 2021 and 30 September 2021. Not only would it lose the income from thosejobs, it could also lose future business from the people or businesses that have madethose bookings.[17] On the basis of what I have read, my assessment is that the safety issues arenot of such immediate or intense concern that Stevryn's business operations mustimmediately be brought to an end, If they do continue, Stevryn will have to ensurethat all vehicles are safe to operate and are operated in accordance with the relevantrules.[18] I consider, if the revocation of licence was to take effect at midnight on 12August 2021, Stevryn's rights of appeal and to seek judicial review of the decisionwould 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 beconsequential on the decision to revoke the applicant's transport servicelicences until the on notice application for interim relief has been heardand ruled on by this Court;(b) Stevryn's Transport (Goods) Service Licence number 0319893 is deemedto continue in force until the on notice application for interim relief isdetermined;(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 15October 2021;(d) Stevryn is to file further affidavits, informing Waka Kotahi and the Courtof how the business has been able to improve the standard of its businessoperations in accordance with Waka Kotahi's expectations, between 11and 13 October 2021;(e) leave is reserved to Waka Kotahi to apply, on 48 hours' notice, for a reviewof these orders if, as a result of any events or inspections that take placebetween now and the hearing of the on notice application, Waka Kotahiobtains new information that suggests there are further reasons for concernas to the safety of Stevryn's transport operations; and(f) costs on this application are reserved.Solicitors:Wynn Williams, Christchurch