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High Court of New Zealand Decisions |
Last Updated: 29 March 2018
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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
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CIV-2017-409-001002 [2018] NZHC 558
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BETWEEN
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TRAVLON COACHLINES (2005) LIMITED
Applicant
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AND
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NEW ZEALAND TRANSPORT AGENCY
Respondent
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Hearing:
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14 March 2018
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Appearances:
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J L S Shaw and C A Holmes for the Plaintiff B Hawes and K South for the
Defendant
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Judgment:
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28 March 2018
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JUDGMENT OF NATION J
[1] The applicant (Travlon) is a passenger service business based in Lincoln near Christchurch. It has been operating since 2005. The largest part of its business is the carrying of school children during school terms and school holiday programmes. It also provides bus services throughout the South Island for tourists, groups and other passengers.
[2] Travlon is a family company. The shares are held by Mr Alexander Bruce and his wife. They and Mr Bruce’s sister are employed in the office along with two other office employees. The company has also, in the recent past, employed a contracted mechanic and three other full-time employees in its workshop. It employs approximately 30 drivers on a permanent or casual basis.
TRAVLON COACHLINES (2005) LTD v NEW ZEALAND TRANSPORT AGENCY [2018] NZHC 558 [28
March 2018]
[3] On 18 December 2017, the New Zealand Transport Agency (NZTA) issued a notice revoking Travlon’s licences with effect from 31 December 2017. Travlon filed judicial review proceedings. On 22 December 2017, on a without notice application, Travlon obtained an interim injunction delaying the revocation decision coming into effect until Travlon’s application for interim relief could be heard and determined on notice. The on notice hearing took place on 14 March 2018.
[4] In this judgment, I decide whether there should be a continuing delay in the revocation decision coming into effect.
The legal context
[5] The Land Transport Act 1998 (the LTA) sets out the NZTA’s key objective and function as ensuring there is a safe land transport system, in part, through licencing those operating a passenger service.1 The primary responsibility of the holder of a licence, such as those granted to Travlon, is to ensure “every vehicle to be used in the service is maintained in a fit and proper condition and that the requirements of any Act, regulation, or rule made for this purpose are met”.2
[6] A transport service licence (TSL) may be revoked by the agency if it is satisfied that:3
(a) the holder of the transport service licence is not a fit and proper person to be the holder of a transport service licence; or
(b) any person having control of the service, or any person who has an involvement in the operation of the service, is not a fit and proper person to have control of, or be involved in, the operation of the service.
The mandatory considerations for the agency in applying the fit and proper person test include the interests of public safety.4
1 Land Transport Act 1998, ss 4 and 30J.
2 Land Transport Act 1998, s 30A.
3 Land Transport Act 1998, s 30S.
4 Land Transport Act 1998, s 30C(1)(a).
[7] The revocation procedure is set out in Part 4A, Subpart 5. The NZTA must take the initial step of notifying the licence holder of the proposal to make a decision that a licence holder is no longer a fit and proper person to hold a TSL. That notification must be in writing.5 The affected person can make submissions which must be considered by the agency before making a final decision.6
[8] There is a right to appeal a decision revoking a TSL to the District Court. The revocation decision remains in effect pending an appeal by virtue of s 106(3) which provides:
Every decision of the Agency appealed against under this section continues in force pending the determination of the appeal, and no person is excused from complying with any of the provisions of this Act on the ground that any appeal is pending.
The District Court has no power to stay a decision pending an appeal.7
[9] Decisions of the NZTA are susceptible to challenge by way of judicial review as they comprise a “statutory power of decision”.8
[10] The leading authority is Carlton and United Breweries Limited v Minister of Customs.9 In that case, Cooke J, in the Court of Appeal, described the approach to be taken in the following terms:10
Of course I am not suggesting that there should be any general rule that a prima facie case is necessary before interim relief can be granted under s8. In general the Court must be satisfied that the order sought is necessary to preserve the position of the applicant for interim relief – which must mean reasonably necessary. If that condition is satisfied ... the Court has a wide discretion to consider all the circumstances of the case, including the apparent strength or weakness of the claim of the applicant for review, and all the repercussions, public or private, of granting interim relief.
5 Land Transport Act 1998, s 30Y.
6 Land Transport Act 1998, s 30X.
8 Judicial Review Procedure Act 2016, s 4.
9 Carlton & United Breweries Limited v Minister of Customs [1986] 1 NZLR 423 (CA).
10 At 430.
[11] In Foreman Automotive Ltd v New Zealand Transport Agency, Katz J stated:11
In summary, the approach involves two steps. First, the Court must consider whether the statutory threshold is met (that orders are necessary to preserve the position of a party). Secondly, the Court has a wide discretion as to whether the grant of relief is appropriate. The exercise of that discretion will usually involve considering all of the circumstances of the case. In this case the key considerations are the strength of the judicial review claims, the particular statutory context, and the private and public repercussions of granting relief.
[12] Here, the NZTA, through its counsel’s submissions, acknowledge Travlon has met the statutory threshold for the Court to grant interim relief. The issue is whether, having regard to all the circumstances of the case, the Court should do so.
Background
[13] Travlon had been operating with a required passenger TSL from October 2005. In 2014, the NZTA granted Travlon the privilege of a 12 month certificate of fitness (CoF) inspection regime for its passenger vehicles rather than the six monthly default CoF inspections.
NZTA’s notice of proposed revocation
[14] In its notice of proposed revocation of 26 October 2017, the NZTA said Travlon had a history of operating substandard and unsafe large passenger service vehicles (LPSVs), despite a number of interventions by the agency directed at improving compliance and safety.
[15] It noted that, prior to January 2012, the maintenance and scheduled servicing of the company’s LPSVs was carried out by a commercial provider. From January 2012 the major responsibility for scheduled servicing, maintenance and safety of the company’s LPSVs had been assigned by the company to an independent contractor, Mr James Coakley. Company records showed that from February 2015 a large number of pre-CoF checks or vehicle safety assessments detected significant faults which meant the vehicles would have failed a CoF inspection, particularly so in respect of
safety-related faults such as brakes, suspension or tyres. In the NZTA’s view, this demonstrated the lack of an effective and efficient regular vehicle inspection and/or a comprehensive fault-reporting and remediation regime, creating a risk to public safety.
[16] The NZTA’s vehicle specialists doubted Mr Coakley’s competence to manage Travlon’s servicing, maintenance and safety work.
[17] Travlon’s maintenance and safety performance came under close scrutiny after one of their buses crashed in the Otira Gorge on 31 December 2015. Travlon’s employed driver of the coach lost control of the vehicle, it failed to take a corner, rolled over while travelling at 70 kilometres per hour and struck an oncoming car. Thirteen bus passengers and the occupants of the oncoming vehicle were injured.
[18] The bus was inspected by the agency’s vehicle specialist on 3 January 2016. He identified significant defects with various brakes, consistent with them not having been adjusted correctly, although Mr Coakley had recorded that he had “cleaned, adjusted and checked” the brakes on 5 November 2015 and 29 December 2015.
[19] Mr Coakley currently faces a charge of “injuring by an unlawful act” in circumstances where, if death had been caused in this crash, he would be guilty of manslaughter. The charge is defended.12
[20] The NZTA’s notice referred to advice it had received from a recognised expert, Professor Raine, that the brakes had not been adjusted in the 29 December 2015 service. However, it also referred to a report obtained by Travlon from another expert, Dr Stevenson, who said it was the driver’s descent strategy which was the primary cause of the accident. Dr Stevenson believes that the driver had over-worked the service brakes, causing them to overheat and fade to the point of failure, and that it was likely the brakes were within appropriate adjustment limits shortly before the crash.
12 The hearing will be before a Judge sitting without a jury. Nothing in this judgment must prejudice Mr Coakley’s right to a fair trial. Documents produced by the NZTA in these proceedings indicate that, at least in part, the case against Mr Coakley relies on an expert opinion which is acknowledged to be based on certain assumptions that will be subject to serious challenge.
[21] Because of concerns arising out of the inspection of the crashed vehicle, NZTA officers and a Police vehicle safety officer inspected 27 of the company’s LPSVs between 1 and 3 March 2016. Faults were identified in 18 of the vehicles inspected. The NZTA’s vehicle specialist issued a report as to the results of this inspection, concluding:
The number of defects found could indicate a number of issues within the company that need to be considered – mechanical staff require training; not enough mechanical staff for the number and type of vehicles being operated; not enough time required to work on and service vehicles and a lack of structured maintenance and repair systems. If Travlon Coachlines (2005) Limited are to continue to operate, a number of things need to be changed or improved. There needs to be a structured preventative maintenance programme put in place, including regular service checks and inspections. More detailed service records need to be kept, including work done, date and mileage when work is completed and who completed the work.
[22] In a letter of 4 April 2016 to Travlon referring to this report, the NZTA emphasised the requirement for Travlon to properly maintain the vehicles as required by s 30A(1). It warned that, if there were future defaults, Travlon’s position would also be reviewed by a commercial transport manager. The company’s vehicles were placed back on a six monthly CoF inspection schedule and it was told there would be another fleet audit within three to six months.
[23] The warning was repeated in a letter of 3 May 2016, when the NZTA reported on its analysis of company records, checking compliance with various requirements, mainly as to driver logbooks and compliance with driving time safety restrictions. It also provided Travlon with a nine-point action plan to assist it to comply with those obligations. That action plan required Travlon to ensure that all vehicles were maintained in a fit and proper condition at all times by 30 June 2016.
[24] There was a further audit of 33 of the company’s LPSVs on 5 and 6 July 2016. Faults were identified in 22. Ten vehicles did not meet the standard for the issue of a CoF and were issued with full or conditional non-operation orders. The NZTA’s conclusion was that, although 11 vehicles had no faults, overall there was little or no improvement in the condition of the vehicles between the two fleet inspections.
[25] Associated with this audit, the NZTA’s officer’s report concluded:
The heavy motor vehicle (HMV) inspections in this recent audit has identified that the management is still failing to ensure its HMV’s are maintained at all times to a “fit and proper condition” as stipulated by Section 30A(1)(a) of the Land Transport Act 1998. In general terms the fleet audit showed that the vehicles operated by Travlon Coachlines (2005) Limited are being operated below a safe standard while in service. The level of knowledge of mechanical staff contracted to maintain the fleet is believed to be impacting on the company’s ability to fulfil its legal obligations under Section 30A(1)(a) of the Land Transport Act 1998.
[26] With a letter of 3 August 2016, the NZTA placed Travlon’s LPSVs on a three- monthly CoF regime and advised Travlon to consider obtaining external advice to ensure the provision of an appropriate level of vehicle servicing.
[27] At a meeting on 11 August 2016, Mr Bruce of Travlon advised the NZTA of a number of initiatives which had been taken to improve vehicle maintenance and safety. On 21 August 2016, Travlon provided the NZTA with a copy of a plan formulated for the company by an external provider, Safe and Sound Solutions, to assist in achieving that objective.
[28] On 22 February 2017, another of Travlon’s buses crashed on the Akaroa Highway. Twenty-six passengers received injuries ranging from minor to serious. The driver of the car into which the LPSV crashed was severely injured. The driver was reported to have been slumped over the steering wheel prior to the crash. The LPSV was closely examined after the crash. Various faults were found with the vehicle including issues with the right front brake, which a vehicle specialist said should have been identified at its last brake service on 25 January 2017 when Mr Coakley indicated he had checked and adjusted the brakes before it was placed back in service. It is not suggested these faults contributed to the crash.
[29] As a result of the crash and the inspection of this bus, there was a third high- level inspection of 20 of Travlon’s LPSVs on 6 and 7 April 2017. Faults were identified in 14 of the vehicles. Four did not meet the standard for the issuing of a CoF and were issued with full non-operation orders. Overall, the NZTA said there was little or no improvement in the condition of the vehicles between the second and third fleet inspections.
[30] The vehicle specialist’s report included the following comments:
Faults found in the above vehicles I would expect to be discovered during servicing by a competent heavy vehicle automotive engineer.
And:
In general terms, the fleet audit showed that the vehicles being operated by Travlon were being operated below a safe standard while in service and that the mechanic in charge of bus maintenance [Mr Coakley] is operating at a skill level well below that expected of a competent heavy vehicle mechanic. In my opinion the types of faults being found, and the number of faults found, demonstrate major failings in the mechanical servicing and maintenance of the Travlon fleet.
The company, through its service provider, is failing to ensure its heavy motor vehicle fleet is being maintained at all times to a ‘fit and proper condition’ as stipulated by s.30A(1)(a) of the LTA.
What did concern me was the number of recurring serious defects identified during the three audits. Following education and advice provided by the Agency on the importance of routine scheduled maintenance, I would not have expected to identify the number of serious faults that I did during audits two and three.
From the serious defects located in all three audits and the subsequent inspection of CDA416 following the Akaroa crash, my conclusion was the service provider did not have the level of mechanical knowledge required to fulfil its legal obligations under s.30A(1)(a) of the LTA.
[31] The notice indicated the NZTA was concerned as to the attitude which Travlon’s principal was taking as to the agency’s concerns. The notice referred to Mr Bruce’s criticism of the report following the second audit as “lacking perspective” and being “all negative, nothing positive”, of his deciding not to implement all the recommendations of Safe and Sound Solutions after August 2016, and of his telling the agency that he believed the NZTA vehicle specialist had not correctly tested at two of the four buses which were issued with non-operation orders after the third audit.
[32] In his summary, the senior adjudicator, Mr Peter Stevenson, stated in the notice that he believed, on reasonable grounds, that Travlon had failed to comply with specified over-arching legal obligations applying to the safe and legal operation of passenger service vehicles in a passenger service and this created a risk to the public. He was not confident that, if it continued to hold its licence, Travlon would comply with the requirements of s 4 of the Act. He concluded that he was not then satisfied the company was a fit and proper person to hold a transport service licence and did
not believe that it was in the interests of public safety for it to be allowed to continue holding a licence enabling it to carry on a passenger service.
Travlon’s response to the notice of proposed revocation
[33] The time for a response was, at Travlon’s request, twice extended, ultimately to 11 December 2017.
[34] Travlon’s response was set out in an affidavit sworn by Mr Bruce on 10 December 2017. His 199 paragraph affidavit was a detailed response to the notice of proposed revocation. Overall, Mr Bruce asserted the adjudicator was not justified in the conclusions he had come to.
[35] Mr Bruce challenged the way in which the various NZTA technical officers had carried out their checks of LPSVs and the conclusions they had reached. He did not accept the criticisms of Mr Coakley’s competence or performance. He said Mr Coakley was the mechanic providing mechanical advice to Travlon when the NZTA gave Travlon a five-star rating in the operating rating system (ORS) in March 2014. He said he believed Mr Coakley had 30 years’ experience of working on buses and had a good reputation. He said Mr Coakley was a major part of the team that provides maintenance on Travlon’s buses, with assistance from others as appropriate. He acknowledged that, within a few weeks of the Otira bus crash, the NZTA officer who had inspected the bus told him that, for the sake of the business, he should distance himself from Mr Coakley. He was concerned that NZTA had a degree of pre- determination as to the cause of the accident. Mr Bruce said that Mr Coakley had exhibited competency to his satisfaction. This was consistent with the approach taken by the CoF inspectors on their three-monthly inspections and the ORS rating for the company which had been mostly five-star and sometimes four-star.
[36] Mr Bruce criticised the NZTA for, in its first and second audits, inspecting vehicles that had been taken off-road pending repair and for effectively penalising Travlon when it had identified defects in vehicles and taken them off-road as a result. The first audit included LPSVs which Travlon acknowledged were unroadworthy at the time. The second audit included vehicles which were parked up for the winter.
[37] Consistent with that criticism, Mr Bruce observed in his affidavit that, it seemed to him, there was an expectation from the NZTA that either faults were fixed before they manifested themselves or that they should not exist at all.
[38] The NZTA was concerned at the number of pre-CoF inspections where faults had been identified and the number of instances where vehicles had passed CoF inspections but had work done on them shortly afterwards to correct defects. Mr Bruce considered the practices which concerned the NZTA should not logically have been used as evidence of misuse of these processes. He considered pre-CoF inspections were a legitimate procedure in vehicle maintenance to identify faults. He said that, if faults were identified, the bus was taken out of service and the fault fixed. He claimed post-CoF maintenance was carried out where vehicles had passed CoF inspections but there was advice from CoF that certain matters should be attended to on an advisory basis. He said that any time a fault was identified the bus was taken out of service and the fault fixed. The company had never knowingly put an unroadworthy vehicle on the road. When vehicles were presented for CoF inspections, they had passed.
[39] Relying on the report from Dr Stevenson, Mr Bruce did not accept that the front brakes of the bus involved in the Otira crash were out of adjustment or were due for adjustment at the time of that crash. He was critical of the way the NZTA and its experts had carried out inspections and had, in his view, failed to action safety information contained in Dr Stevenson’s report regarding the particular type of bus involved.
[40] Mr Bruce was critical of the adversarial attitude adopted by the inspector at the time of the first audit after the Otira crash and the method by which the inspector had checked certain items.
[41] Mr Bruce referred to certain shortcomings in maintenance or inspection or recording procedures which had been identified by the audits and through discussions with NZTA personnel. He asserted that Travlon had responded positively to those criticisms and recommendations. He said many of the recommendations made by Safe and Sound Solutions had been implemented and he explained that certain recommendations had not been implemented because of the particular nature of the
Travlon operation. For instance, he said Travlon had not relied on their part-time drivers to carry out brief pre-use inspections but had chosen to have those inspections carried out by full-time yard staff employees. He said that, in retrospect, it was an omission not to have discussed such modifications to the Safe and Sound Solutions proposals with NZTA. The intent of the refinements made was to enhance the safety of the daily checks by having consistent people doing it.
[42] Mr Bruce did not accept the NZTA had been correct in identifying defects with the brakes in the bus which had been involved in the Akaroa Road crash on 22 February 2016. He said the findings were not consistent with it having a current CoF or with the experience of another driver who had driven the vehicle on the morning before that crash.
[43] Mr Bruce said he disputed the assessment made in the third audit of buses and the assigning of full non-operational orders for certain buses. He gave reasons for his opinion.
[44] Mr Bruce said that Travlon had engaged in the audit process in good faith. Many of the issues arising from the audit inspections were because of the discrepancy between audit findings and those of certified vehicle inspectors carrying out CoF assessments. He said, for most of the relevant period, Travlon had a predominantly five-star ORS rating and had its vehicles independently reviewed three-monthly through the CoF process. The company was committed to complying with the law and to continuing to improve its service.
Notification of NZTA’s decision
[45] The NZTA responded in a letter of 18 December 2017 to Travlon’s lawyer. In that letter, the adjudicator acknowledged receipt of the affidavit of submissions and said he had carefully considered them but was not persuaded from the proposal. The adjudicator advised the company’s lawyer that, to assist the company to accommodate any current contractual tour operations, the decision to revoke would take effect from midnight on 31 December 2017. This was also formally recorded in a notice of decision to revoke. Travlon was advised of its right to appeal.
Subsequent proceedings
[46] Travlon filed a notice of appeal with the District Court on 21 December 2017.
[47] On 22 December 2017, Travlon filed in the High Court a statement of claim and an application for judicial review. In that statement of claim, Travlon pleaded:
(a) The NZTA has not given sufficient consideration to the submissions made in respect of the notice and it has failed to address the substantive points raised by the Plaintiff;
(b) The NZTA has failed to take into account relevant considerations as raised by Travlon in submissions:
(i) the ORS inspection record rating held by Travlon demonstrating the safety of its fleet and the compliance with the certificate of fitness obligations;
(ii) the outcome of various certificate of fitness inspections of company vehicles finding no issues;
(iii) the standard vehicle safety reviews undertaken by Travlon;
(iv) the pre-certificate of fitness inspection process;
(v) the findings of Travlon’s independent expert, Dr Timothy Stevenson, in relation to the Otira Gorge crash;
(vi) the steps taken by Travlon following any adverse findings or compliance issues; and
(vii) the steps taken by Travlon to ensure the safety of its fleet and its compliance with its legal obligations.
(c) The NZTA has taken into account irrelevant considerations including issues that have no impact on a vehicle’s safety and certificate of fitness issues which were subsequently resolved;
(d) The NZTA has acted contrary to the requirements of natural justice by failing to provide sufficient reasoning in respect of the notice; and
(e) The decision by the NZTA is, in all the circumstances, unreasonable.
[48] On the same day, Travlon applied without notice for interim relief. It was successful and obtained orders prohibiting the NZTA from giving effect to its revocation decision pending the on notice hearing.
[49] Dunningham J directed the on notice application for interim relief was to be served on the NZTA without delay and, if opposed, was to be set down for hearing as soon as practicable in the new year.
[50] On 22 December 2017, counsel for the NZTA advised the Court that the on notice interim relief application was likely to be opposed. The registrar began discussing potential hearing dates with counsel for both parties. A formal notice of opposition to the interlocutory application was filed on 13 February 2018. Potential hearing dates of 13 March 2018, then 15 May 2018 and 27 February 2018 were discussed with counsel. On 13 February 2018, counsel for the NZTA filed a memorandum with the Court asking that the matter be given priority. On 6 March 2018, he filed the further memorandum, at that stage assuming the date of hearing for the opposed application was to be in May 2018.
[51] In the memorandum, counsel advised that a Travlon bus had been stopped and inspected on 5 March 2018 when it was carrying 30 school children. The Police vehicle safety officer had identified what he considered to be serious problems with the bus. He issued it with a non-operation order, that is a notification that the vehicle was considered unsafe and ordered to be off the road and not driven at all until rechecked and issued with a valid CoF.
[52] As a result of this memorandum, an urgent conference of counsel was convened before Dunningham J and the matter was set down for hearing on 14 March 2018.
[53] On 12 March 2018, the NZTA filed lengthy detailed affidavits and documentation from its senior adjudicator Mr Peter Stevenson, a vehicle inspector Mr Maurice Fleury, and a commercial transport officer Mr Neville Hyland.
[54] Mr Stevenson responded to Mr Bruce’s submissions as to the notice of proposed revocation with supporting documents.
[55] In his affidavit sworn on 8 March, Mr Fleury explained and justified the rationale and significance of adverse findings that had been made by other NZTA
inspectors. He had assisted with the audit of Travlon’s bus fleet on 5 July 2016 and justified the findings that had been made in the report as to that audit. He had also examined the bus involved in the Akaroa crash. He assisted in the inspection of Travlon’s fleet on 6 and 7 April 2017. In his affidavit, he justified the findings that had been made. In that affidavit, Mr Fleury said he has 48 years’ experience in the light and heavy motor vehicle maintenance and inspection field. He has been employed as a vehicle specialist for the NZTA since October 2013. He said it was very rare to discover any vehicle defects with the main safety items such as brakes, steering and suspension, as was found in the third audit of Travlon’s bus fleet. His conclusion was that Travlon’s main vehicle service contractor (Mr Coakley) was not competent at identifying vehicle defects. He considered this was a risk to public safety.
[56] In a further affidavit sworn on 12 March 2018, Mr Fleury commented on the findings made during the Police inspection of the bus carrying school children on 5 March. He explained why there was a serious problem with the right rear brake drum and why he considered that problem should have been picked up in routine maintenance undertaken on the bus the previous weekend. He also referred to a temporary repair strategy which had been adopted with a brake component and said that modification was not permitted in the agency’s vehicle inspection and repair manual. Contrary to the advice given to Travlon by Mr Henry, Mr Fleury said that, with that modification, the vehicle would not have been permitted to pass a CoF inspection in a way that might have been acceptable for a light motor vehicle.
[57] Mr Hyland is a commercial transport officer for the NZTA based in Christchurch. He had assisted in the three audits of Travlon’s buses and the inspection of the bus involved in the Akaroa crash. In his affidavit, he described working with Mr Bruce after the first audit to improve the standard of Travlon’s bus maintenance and servicing, in particular the action plan setting out the NZTA’s requirements. He was disappointed with the inspection results of the second audit, having regard to the assistance and resources which he had provided to Travlon since March 2016. As a result, he considered Travlon had failed to ensure its vehicles were maintained at all times to a fit and proper condition, as required by s 30A(1)(a). Thus, Travlon failed to comply with the most important requirement in the action plan. It appeared to Mr
Hyland that Travlon had put its administration in order but that it was failing comprehensively in respect of its workshop and vehicles.
[58] Mr Hyland said the NZTA was reassured by Travlon engaging Safe and Sound Solutions and implementation of that plan would go a long way towards addressing issues of non-compliance relating to the operation of unsafe or defective vehicles. The NZTA had decided to allow Travlon to get on with its business but that it would monitor progress in the interests of safety.
[59] Mr Hyland said the results of the third fleet inspection from 6-7 April were extremely disappointing, as was Travlon’s failure to implement all Safe and Sound Solutions’ recommendations.
[60] Mr Bruce swore an updating affidavit on 12 March 2018. It was partly in response to the affidavits filed for the NZTA but there was obviously limited scope for him to deal with them. With regard to factual issues raised in those affidavits, he referred back to his response to the proposed notice of revocation. Mr Bruce said that he was committed to ensuring Travlon operated a safe and reliable passenger transport service.
[61] Mr Bruce said that Travlon had now ended its relationship with James Coakley as its contracted mechanic.
[62] Mr Bruce said Travlon had engaged Dennis Robertson, Chief Executive Officer of the Road Transport Association of New Zealand (RTANZ) to:
(a) undertake a fleet risk appraisal of Travlon to better target vehicles for programmed maintenance;
(b) engage a vehicle specialist to assess the day to day maintenance regime and fleet safety system;
(c) undertake a peer review, assess the regime going forward, and assess the competence of those involved to manage this process and the required safety outcome; and
(d) make recommendations on how to achieve and maintain a safety system to meet the requirements of the Land Transport Act.
[63] He said that, as a result of the RTANZ review, Travlon had completed a risk management calculation table identifying the most risk adverse buses to assist in prioritising them. Mr Bruce, in his affidavit and as conveyed to the Court through counsel’s submissions, undertook to implement any recommendations that were made by Mr Robertson and RTANZ.
[64] Mr Bruce said he had organised for the New Zealand Automobile Association (AA) testing station on Shands Road to undertake heavy vehicle condition checks on Travlon’s fleet. As at close of business on 12 March 2018, five buses had gone through this check. His intention was to have ten buses inspected each week to ensure the whole fleet had been inspected once within the next four week period. He said maintenance and repair issues requiring specialist attention would be referred to an appropriate specialist business, such as Truck Alignment and Repair in Hornby. Buses requiring minor attention would be seen to by an experienced mechanic they had contracted, Mr John Henry. Mr Henry had also agreed to assist Travlon in inspecting its fleet and to assist with these mechanical repairs. His checklist was to be the same as that the AA would go through in undertaking the heavy vehicle condition checks.
[65] Travlon also filed an affidavit from Dennis Robertson, sworn on 13 March 2018. He has been CEO of RTANZ since 2011. Between 1996 and 2009, he worked for the NZTA. He confirmed that he met with Mr Bruce on 28 February 2018 and RTANZ would be assisting Travlon, as Mr Bruce had indicated in his affidavit. He referred to Mr Henry as an experienced qualified mechanic. He considered the steps which Travlon had recently taken to address the NZTA’s concerns were comprehensive and would ensure the safe and compliant operations of Travlon’s fleet in the interim until an appropriate mechanic was hired by the company. RTANZ had made its specialist recommendations and they were available for implementation. Mr Robertson said he was committed to working with Travlon to ensure its operation and safety requirements were consistent with the expectations of the NZTA.
[66] Mr Henry swore an affidavit on 13 March 2018. He confirmed that he had been engaged by Travlon to assist, as Mr Bruce had indicated. He said he was a trade certified mechanic with over 50 years’ trade experience. In a letter attached to his affidavit, he said he had been rung by Travlon’s mechanic on 4 March 2018. He said the mechanic was looking for a slack adjustor, a part associated with a brake on the bus. He did not have that part. He advised the mechanic to adjust the brake, drill the head of the slack adjustor bolt and fit a lock wire through it. He said this was a method of dealing with the problem within the transport industry and that it would result in the front brakes passing on a brake roller test for the CoF. He referred to a problem with the right rear brake drum being insecure. He acknowledged it was not a good problem to have on a bus or on any braking system but was of the view that it would have been difficult to pick up the problem before it arose.
Submissions for Travlon
[67] Mr Shaw emphasised the good standing that Travlon had with the NZTA before the Otira crash, as reflected in the NZTA allowing it to have CoF inspections carried out at 12 month intervals. He said, as a result of that crash, Travlon’s operations had come under intense scrutiny and the relationship between Travlon and NZTA had become “vexed”.
[68] Mr Shaw submitted that, whatever criticisms the NZTA may have had as to Travlon’s response to its concerns in the past, what it wanted to happen was being achieved with the remedial steps Travlon was now taking to deal with maintenance and safety issues. Mr Shaw said that Travlon had been proceeding on the basis that, with an anticipated hearing date for the interim application in May, there would have been time for the company to receive the RTANZ recommendations and show they were acting on them.
[69] Mr Shaw submitted that it was clear from the proposed notice of revocation that Travlon’s dependence on Mr Coakley in maintaining Travlon’s bus fleet was at the heart of the NZTA’s concerns and that issue had now been squarely addressed.
[70] Mr Shaw submitted that the defects identified by a Police inspector with the vehicle on 5 March 2018 did not create safety risks with regard to that bus and the
evidence showed that, when a driver told Mr Bruce there appeared to be a problem with the brakes, Mr Bruce ensured they were checked by Mr Coakley. Mr Coakley sought appropriate advice from Mr Henry and fixed the problem in a way which ensured the brakes could operate safely and which was sufficient for the vehicle to pass a CoF test.
[71] Mr Shaw highlighted the fundamental change in Mr Bruce’s approach with the departure of Mr Coakley from the Travlon business. He highlighted the consequences that Travlon would face if the revocation were to take effect. He submitted that, if interim relief was not continued, Travlon would effectively have to close its business and cease operating. In reality, Travlon would economically struggle to revive its business after the appeal or judicial review proceedings had been brought to an end or if and when it was able to obtain the required licences on a fresh application.
[72] Mr Shaw submitted that the NZTA’s concerns about past incidents should be given less weight because there was a real and genuine dispute over the factual judgments NZTA inspectors had made. In its revocation decision, the NZTA had failed to engage with those disputes, acknowledge them and justify the determinations it had arrived at. Mr Shaw also submitted the incidents were now all in the past and a new regime was being put in place to respond to the NZTA’s concerns.
[73] Mr Shaw noted there were only two incidents that had caused concern since the third audit of Travlon’s buses in April 2017 and before it issued its notice of proposed revocation. Firstly, there was an incident in June 2017 where the Police issued a notice of an infringement after a roadside inspection. The Police however took no further action after Travlon provided evidence from the AA that the roadside inspection was erroneous. Secondly, on 20 September 2017, a bus was checked by the Police who found that it was not up to CoF standard because of worn universal joint bearings on the drive-shaft. In his response, Mr Bruce said the Police had asked that the universal joint be checked. He said the company did this, found no fault and a new CoF was obtained for the bus on 27 September 2017 after AA testing.
[74] In reply submissions, Mr Shaw said, to the extent historical matters were at issue, they should be put in perspective having regard to the 12 month CoF regime
that had operated until April 2016, the favourable ORS rating which the NZTA had provided for Travlon which, at the very least, resulted in Travlon receiving mixed messages from the NZTA as to the adequacy of its maintenance and safety regime, and the favourable pass rate for Travlon’s vehicles on CoF inspections.
[75] Mr Shaw submitted that the Court should not attach much weight to the extensive affidavits that had been filed for the NZTA just prior to the hearing. He submitted that this would compound the breach of natural justice caused by the NZTA failing to engage with Travlon over the issues which Mr Bruce had raised in response to the notice of proposed revocation.
Submissions for the NZTA
[76] Mr Hawes characterised Travlon’s performance after the Otira crash as being one of chaos. He submitted that, against the background of all that had occurred over the last two years, the last minute changes that were being put in place provided little comfort as far as safety was concerned. There was still considerable uncertainty as to what would ultimately be achieved. He said the maintenance failures identified on the three fleet audits were at the heart of the NZTA’s concerns, as was Travlon’s failure to respond positively to the pressure which the NZTA had applied to it to make improvements, and the assistance and encouragement which the NZTA had provided in this regard.
[77] Mr Hawes highlighted Mr Stevenson’s opinion, as apparent from his affidavit, as to the extraordinary amount of regulatory time the NZTA had spent scrutinising the Travlon fleet, the company’s failure to heed warnings (particularly so after Mr Hyland’s personal involvement between March and July 2016), the NZTA’s concerns at Travlon not implementing all the Safe and Sound Solutions’ recommendations, and Mr Fleury’s evidence that the number of defects found on the third audit was extraordinary. He highlighted the way in which Travlon had failed to act on the NZTA’s concerns over Mr Coakley’s competence and the seriousness of the defects identified in the bus which was examined and ordered off the road on 5 March 2018. He stressed the significance of this, given that it occurred when Travlon knew it was
able to operate only through the interim relief that had been obtained on 22 December 2017.
[78] Mr Hawes said the NZTA’s decision to revoke had been made in accordance with the procedure provided for by the LTA. He stressed the need for caution in interfering with the decision that had been made when there was no provision in the LTA for a licence revocation to be suspended pending an appeal and when that revocation decision was all to do with safety. He submitted that, if Travlon is able now to make improvements to provide the guarantees which the NZTA requires, that should be dealt with by it making fresh applications for licences. This would enable the NZTA to assess what systems have been put in place and how, in the long term, it can ensure Travlon will meet all its safety obligations as the holder of passenger TSLs.
Discussion
[79] I accept the Court should exercise caution in interfering, even on an interim basis, with the decision of the NZTA revoking TSL’s of the sort that are essential to Travlon’s business. The NZTA is an agency with specialist expertise. Caution is required because the agency’s decisions focus on ensuring licenced passenger services are safe for all who use them.
[80] Parliament has also made it clear, through s 106(3) of the LTA, that the lodging of an appeal would not, of itself, delay a licensee having to comply with the NZTA’s decision. Section 106(3) was however enacted when Parliament had, through s 8 Judicature Amendment Act (now the Judicial Review Procedure Act), provided for a licenced operator, such as Travlon, to challenge the decision made by the NZTA and for the Court to make interim orders providing for interim relief of the sort Travlon is seeking. It is clear, however, from s 106(3), that the mere lodging of an appeal will, of itself, not be a sufficient reason for allowing interim relief.
[81] The NZTA did not engage with Travlon over Mr Bruce’s response to the notice of proposed revocation but has done so through the extensive affidavits and associated documents so recently sworn by Messrs Stevenson, Fleury and Hyland. On an application for interim relief, their evidence and that of Mr Bruce and Travlon’s witnesses has not been tested through cross-examination. Nor have I had the
opportunity or time to carefully consider all the documentation that witnesses on both sides provided to support opinions and assertions made in their affidavits. I do however make certain observations relevant to the decision I must make on the current application.
[82] I acknowledge that Travlon’s record of failed inspections, particularly from the three fleet audits, appears to provide a good basis for the NZTA’s lack of confidence in Travlon’s maintenance system and Mr Coakley’s competence for the role he had to play in that system.
[83] There must have been significant risks in the past through the defensive and adversarial attitude which Mr Bruce adopted in response to shortcomings in the Travlon operation, as identified by the NZTA. This may well have resulted from the adversarial position the parties were in after the Otira bus crash. It was the antithesis of what might be expected in a business where safety issues should be paramount and the open acknowledgement of problems and defects was essential to ensuring a licenced passenger service would be safe. It does not appear from Mr Bruce’s response to the proposed notice that he was committed to promoting a “just culture”13 amongst staff, drivers and yard staff employed by Travlon in a way that would put the need for safety at the forefront of the way Travlon conducted its business.
[84] Consistent with that, it is significant that the steps which Travlon has recently taken to meet the NZTA’s concerns have been taken so belatedly.
[85] Travlon was told after the first fleet audit of 1 March 2016 that the results of that audit, from a safety perspective, were unacceptable. It was also recommended that Travlon review and improve its maintenance systems immediately and Mr Keating of the NZTA said he was available to provide any advice that might assist with this. Travlon was told that, if future audits indicated non-compliance with transport legislation, the audit file would be referred to the Commercial Transport
13 For a discussion as to what this means and why it is important in a passenger transport business where safety is paramount, I refer to my judgment in Heli Holdings Ltd v The Helicopter Line Ltd [2016] NZHC 976.
Manager for his consideration. If that happened, the NZTA would consider Travlon’s entire history.
[86] After the second audit, Travlon was told it would be on a three monthly CoF regime for its vehicles. Mr Hyland says Travlon was told that detection of any further instances of the company operating unsafe or defective vehicles could result in a review of the fitness and propriety of both the company and the person in control to continue to hold a TSL. That warning was mentioned and referred to in a letter of 3 August 2016 from NZTA to Travlon, signed by a commercial transport manager.
[87] The termination of Travlon’s relationship with Mr Coakley must have occurred after 4 March 2018. Mr Bruce said that, on 4 March 2018, he instructed Mr Coakley to inspect the front brakes, diagnose the problem and fix it after being told by a driver on Friday 2 March 2018 that the bus was pulling to the right when the brakes were being used. Mr Bruce’s initial meeting with Mr Robertson of RTANZ took place on 28 February 2018.
[88] I accept that, if the revocation were to take effect immediately, the consequences for Travlon, its shareholders and its employees would be serious. I accept its evidence that the peak period for its tourist business is from December through to March and April. It is through the extra revenue it obtains over that period that it is able to obtain the cashflow which permits it to operate over a full year. I accept the immediate revocation of licences would put the employment of the approximately 30 drivers, who are regularly employed or contracted by the company, at risk. I also accept that a significant part of the company’s business involves the carrying of school children. It must be of value to schools and families who rely on that service.
[89] The NZTA acknowledged how the revocation of Travlon’s services could have consequences for those using the service through providing for its decision of 18 December 2017 to come into effect on 31 December 2017 and through the suggestion made in these proceedings that it might have been possible for another licenced passenger service operator to effectively take over the operations of Travlon. In suggesting that as a reasonable possibility, it appears that, through another licenced
operator, the NZTA anticipated that many of the drivers and LPSVs currently used in Travlon’s business could continue to be involved in providing the passenger service currently available through Travlon.
[90] As a result of the first fleet audit, other aspects of Travlon’s operation were audited, mainly concerning driver compliance with safety work-time restrictions. It is apparent from Mr Hyland’s affidavit that Mr Bruce and Travlon responded promptly in providing most, if not all, of the documents and records he wanted. He found there had been a number of breaches of work-time and logbook requirements. He says he did not consider the breaches established a deliberate plan to work excessive hours or an intention to mislead, or that the breaches required prosecution. Rather, he believed they indicated a casual approach on the part of Travlon’s management and drivers, and a lack of understanding of all requirements and how to comply with them. Mr Hyland discussed his concerns with Mr Bruce and drew up an action plan for completion on or before 4 August 2016. Mr Hyland said that, after the second audit of Travlon’s LPSVs on 5 and 6 July 2016, it appeared Travlon had largely put its “back room” (administration) in order, but was still failing comprehensively in respect of its workshop and vehicles.
[91] The NZTA was reassured by Travlon’s engagement of Safe and Sound Solutions and Mr Bruce’s expressed commitment that it would implement its recommendations. Mr Hyland was concerned after the second audit that the recommendations had not been fully implemented and that Travlon still appeared to be trying to organise its processes. Mr Hyland did however produce with his affidavit correspondence from Mr Bruce indicating that Travlon had not simply ignored all the recommendations, but had made some improvements and was endeavouring to respond to Mr Hyland’s continuing concerns in this regard.
[92] Mr Bruce was interviewed by a commercial transport manager from the NZTA on 19 May 2017 with his lawyer present. In that interview, Mr Bruce said he was confident of the safety of Travlon’s operation and the adequacy of its system because of what he said were its daily documented checks, documented monthly checks and the three-monthly CoF regime which (contrary to an earlier stance) Mr Bruce said they wanted to continue with. Mr Bruce said the safety of the fleet was not just in the hands
of one person but also relied on those with expertise to carry out the required tests. He made specific criticisms of the way bus brakes had been checked in the last audit and said he believed at least two of the four buses that had been red-stickered were not tested correctly.
[93] Mr Hyland prepared a comprehensive report for the agency’s adjudicator on 22 July 2017. In that report, Mr Hyland set out the history of the NZTA’s dealings, which Mr Stevenson relied on in his notice of proposed revocation. He and the commercial manager invited the adjudicator to consider whether:
[94] There is no evidence that Travlon was made aware this step had been taken or that the NZTA was, at that point, still actively considering the revocation of Travlon’s licences. It is also of some significance to the current application that the matters referred to in Mr Hyland’s report did not raise issues of such urgency or importance that the adjudicator felt it necessary to make a decision over what action should be taken before October 2017 and extended the time for Travlon to respond.
[95] It is also significant that the NZTA, after reviewing the history of its dealings with Travlon, decided not to seek a declaration that Mr and Mrs Bruce were not fit and proper persons to be in control of a transport service. In his submissions, counsel for the NZTA highlighted this in noting that, with revocation of Travlon’s licences, it would be open to Travlon, under the effective control of Mr and Mrs Bruce, to apply for new licences if and when they have implemented the recommendations of Mr Robertson and the RTANZ.
[96] I also note that, after the third audit of Travlon’s LPSVs on 6 and 7 April 2017, and before the NZTA issued its notice of proposed revocation, there were only two recorded instances of the Police inspecting Travlon vehicles and reportedly finding faults. In the notice, the adjudicator referred in some detail to a traffic offence notice that had been issued on 29 June 2017 with regard to a bus carrying school children.
The adjudicator further noted that the inspector issued a non-operation notice in the interests of safety and the Police charged Travlon with operating an LPSV not up to CoF standard. He said the notice had been waived after the Police were provided with evidence that the defects had been rectified. Mr Bruce said in his response that, immediately after the inspection, the bus was taken to the AA testing station. Their assessment was that the Police officers’ observations were in error. The Police were supplied with that information and the offence notice was waived. Mr Bruce said this was discussed in detail with the Police commercial vehicle unit on 24 November 2017.
[97] In his notice, the adjudicator also referred to the Police, on 20 September 2017, inspecting a LPSV and finding it not up to CoF standard because of worn universal joint bearings on the drive shaft. He referred to a report the Police had prepared in respect of this inspection but did not say that any offence notice had been issued as a result. In his response, Mr Bruce said the company had never seen or been sent a copy of the Police report. He said that, immediately after the incident, the driver reported that the Police had asked that the universal joint be checked. He said that Travlon did this and found no fault. He said a new CoF was obtained for the bus on 27 September 2017 with no faults found and produced the in-service inspection report from AA Vehicle Testing at 47 Shands Road confirming this.
[98] I also have some regard to Travlon’s ORS rating. I accept that, for reasons referred to by Keane J in Cheyenne Haulers Ltd v New Zealand Transport Agency, the ORS rating is not a perfect indicator as to the safety of a licensee’s operations.14 Importantly, Mr Hawes pointed out that the results of the three fleet audits did not form part of the ORS calculation.
[99] Mr Hawes also submitted Travlon had manipulated the ORS system through distorting the effect of passing CoF tests. He suggested it had done this through having Mr Coakley carry out pre-CoF checks to ensure the vehicles would pass CoF tests and also implicitly through obtaining CoF passes on the basis that certain work on vehicles would be carried out after the CoF inspections. He described that as there being such subsequent work carried out “inexplicably”.
14 Cheyenne Haulers Ltd v New Zealand Transport Agency HC Auckland CIV-2001-404-2456.
[100] In that regard, I note that, in the report for the adjudicator of 21 July 2017, Mr Hyland said that pre-CoF checks were common industry practice, that the purpose of a pre-CoF inspection was to identify any faults which would fail a CoF inspection and to enable an operator to complete any necessary repairs prior to the actual CoF inspection. He said a positive pass on the CoF inspection would, in turn, reflect a positive result in the ORS system. It does not appear that the NZTA or operators in the business generally saw anything sinister in this. Arguably, it must reflect how the CoF regime, in conjunction with the ORS assessments, helps promote higher standards and increased safety with the maintenance of vehicles.
[101] Although counsel described the work done after CoF inspections as being inexplicable, Mr Bruce, in his interview of 19 May 2017, said the work was carried out because Travlon had asked the CoF inspectors to advise of any work that might be required, not work which was necessary to obtain the CoF but as part of advisable ongoing maintenance. He said there was no understanding between Travlon and the CoF inspector in the business it was using that there would be no recording of CoF faults on an examination as long as the defects were repaired in due course after the CoF inspection. In his response to the notice of proposed revocation, Mr Bruce explained, in apparently compelling terms, that he understood the NZTA had investigated suspicions in this regard and had found nothing untoward in the way the Rangiora business carried out the CoF tests.
[102] Despite his submission as to the caution which I should exercise in considering the ORS rating for Travlon, Mr Hawes, for the NZTA, explained to me:
The ORS is a tool used by the agency in New Zealand Police to identify potentially higher risk operators of particular vehicles for further investigation and assistance to improve their safety practice, and for auditing and targeting purposes.
An ORS rating is between 1-5 stars based on how the operator has been assessed in safety-related events over a given 24 month timeframe. Specifically, the ratings are based on the types of faults found at CoF and roadside inspections, and traffic offences and infringements which impact upon road safety. Those faults or offences are weighted relative to their impact on road safety, so that more dangerous faults and offences will lead to a poor rating.
[103] The ORS rating thus suggests that at least the record of CoF inspections and Police roadside inspections were not of such a nature as to give rise to significant safety concerns.
[104] An ORS rating must have some relevance in assessing the significance of those matters and also whether there was any justification for Mr Bruce’s confidence in Travlon’s ability to maintain a safe bus fleet, as conveyed to the NZTA in his interview of 19 May 2017.
[105] I accept the focus of the NZTA’s concerns in revoking Travlon’s licences was the company’s reliance on Mr James Coakley and his competency for the tasks required of him. It is of concern that, in his response to the proposed notice, Mr Bruce indicated he did not know what Mr Coakley’s formal qualifications were, yet retained full confidence in Mr Coakley. In considering safety risks over the immediate short term, it is nevertheless significant that Travlon no longer uses Mr Coakley, but now has available the services of Mr Henry, who has formal trade qualifications, 50 years’ experience and is regarded by Mr Johnston of the RTANZ as a competent and experienced operator. It is also significant that Travlon is now having detailed checks of all buses made by the AA with assistance from Mr Henry. Travlon has engaged Mr Johnston of the RTANZ to review the way it operates and to make recommendations as to changes it should put in place. Mr Bruce says he is committed to implementing those arrangements and has already taken certain tangible steps to do so. This does indicate there has been a marked change in Mr Bruce’s mindset and that he appreciates he has to make significant changes to the way Travlon operates if it is to continue providing a passenger transport service.
[106] In considering safety in the short term, I do however weigh against those matters the way in which Travlon failed to implement all the recommendations of Safe and Sound Solutions in late 2016 and early 2017, despite then saying it was committed to doing so. I also take into account the fact that these changes only occurred in February and March of this year and that there is still uncertainty as to precisely what the changes will be and how they will be implemented.
[107] The state of the vehicle inspected by the Police and put off the road on 5 March 2018 is also significant. It is remarkable that Mr Coakley and Mr Bruce were willing to have that vehicle on the road carrying children with a temporary repair when Travlon was able to operate only through obtaining, on a without notice basis, the relief provided by Dunningham J’s orders of 22 December 2017. At first sight, the problems identified by the Police would appear to be alarming but they need to be put in perspective. One of the matters the Police commented on was the worn state of airbags. However, it has subsequently been accepted that these did not create a safety risk and the vehicle passed a CoF test with them being in the same state. Even if Mr Fleury was right, as he is likely to have been, that the temporary measure recommended by Mr Henry to deal with the brake problem identified by Mr Coakley would not have enabled the vehicle to pass a CoF test, it was also Mr Henry’s evidence that the temporary measure adopted was one that ensured the brakes would operate as required. Records produced showed that the brakes did operate as required in a brake- roller test carried out on 7 March 2018. Furthermore, with notice of the defects recorded by the Police and a further brake performance test, the vehicle was issued a CoF by AA Vehicle Testing on 9 March 2018.
[108] I next consider the merits of the judicial review proceedings and the potential for an outcome favourable to Travlon in the District Court proceedings. In his affidavit, Mr Stevenson said he was satisfied with the need for revocation by a wide margin. Despite this, on my preliminary assessment of the evidence, I do see Travlon as having an arguable case for both the appeal and the judicial review proceedings.
[109] In the judicial review proceedings, the High Court will have to consider whether there was a breach of natural justice in the way the NZTA:
(a) failed to acknowledge the substance of Mr Bruce’s response to the notice of proposed revocation or to engage with him over that response; and
(b) when confirming its notice, failed to give reasons for its decision and for rejecting the specific criticisms which Mr Bruce had made as to the way in which certain inspections were carried out.
[110] It will also be arguable that the NZTA had regard to irrelevant matters when referring to roadside inspections carried out by the Police where, on the evidence in documents presented, it was found on closer inspection that there were no such defects.
[111] There will also be an issue as to whether the NZTA took into account irrelevant considerations in treating Travlon’s use of pre-CoF inspections and the CoF inspections themselves as being inconsistent with an appropriate maintenance surveillance system for its fleet. The three-monthly CoF schedule had been imposed by the NZTA to reduce safety risk, and the successful passing of CoF tests was something which the NZTA itself took into account in arriving at an ORS safety standard for a licence holder.
[112] There will also be an issue as to whether the NZTA took into account an irrelevant consideration in treating the work done by Travlon post-CoF examination on significant items of maintenance as evidence of a maintenance surveillance failure on the part of Mr Coakley or some manipulation of the CoF system when Mr Bruce’s explanation was that work demonstrated a responsible use of the CoF inspectors for advice as to further recommended work.
[113] It is also seriously arguable that the adjudicator took into account an irrelevant consideration and failed to consider a relevant matter by referring to Travlon’s drivers failing to comply with logbook completion requirements and safety work-time restrictions without any reference to Mr Hyland’s view that, by August 2016, Travlon had got its administration procedures in order.
[114] I recognise the NZTA has sought to address these potential or actual criticisms of its decision-making process through the very detailed affidavits filed in these proceedings. Judicial review proceedings, however, normally proceed on the basis of the record of the decision-making process as it stands without bringing into account further evidence by which the decision-maker would seek to justify its decision or enlarge on the process by which it reached its decision. The evidence filed for the NZTA would however be admitted and have to be considered carefully in the context of Travlon’s appeal to the District Court.
[115] No date has been obtained for the hearing of that appeal, however, it is unlikely to proceed before the last quarter of this year. There is a real risk for Travlon if it does not obtain interim relief that any appeal would be pointless because, even if a Court is satisfied the decision should be overturned, it could well be impossible for Travlon to resurrect its business.
[116] It cannot be said that Travlon would have no prospect of success on an appeal. The appeal would proceed as a hearing de novo. Mr Hawes, for the NZTA, acknowledged that, on the hearing of the appeal, Travlon would be able to put before the District Court evidence as to improvements it had made to the way it operates in accordance with RTANZ recommendations. I accept that Mr Coakley’s competence was at the forefront of NZTA’s concerns. He is no longer working with Travlon. Travlon is saying it is committed to implementing appropriate recommendations from Mr Johnston of the RTANZ. If it does, there is the potential that Travlon could persuade the District Court that the revocation of its licences is no longer warranted and that the appeal should be allowed.
Conclusion
[117] The NZTA accepts Travlon has met the threshold for the obtaining of interim relief under the Judicial Review Procedure Act. I am satisfied there should be limited relief of the sort Travlon seeks but circumscribed both as to time and conditions.
[118] I make an order prohibiting the NZTA from taking any further action that is, or would be, consequential to its decision to revoke Travlon’s transport service licences. I also declare that the licences that have been revoked are to continue and be deemed to have continued in force. These orders are to continue in force until 31 May 2018 and are made on the following conditions:
(a) All Travlon buses used in its licenced transport operations are to undergo and pass a pre-CoF inspection at AA Vehicle Testing over the period from 1 March 2018 to 25 April 2018. The check test is to be approved by the NZTA;
(b) Where, in the opinion of the AA, a bus is not roadworthy, that bus is not to be used until the required maintenance and repairs are undertaken;
(c) Maintenance and repairs, which John Henry is competent to undertake, are to be carried out by him or under his direct supervision. When repairs and maintenance are outside his competence, they are to be carried out by an approved specialist such as Truck Alignment and Repair in Hornby;
(d) RTANZ is to forthwith complete the tasks required of it as set out in para
[62] of this judgment. Its recommendations on how to achieve and maintain a safety system to meet the requirements of the Land Transport Act are to be provided to the NZTA by 28 April 2018;
(e) Travlon, its drivers, managers and employees are to strictly comply with all Travlon’s obligations as a transport service licence holder and the rules, regulations and requirements of s 30A Land Transport Act and of the NZTA; and
(f) Leave is reserved to the NZTA or Travlon to seek, on 24 hours’ notice, any variation to these conditions, consistent with this judgment, which would further ensure the safe operation of Travlon’s buses in this interim period.
[119] Leave is also reserved to the NZTA to apply, on 24 hours’ notice, for the immediate termination of this period of interim relief if there is any breach of the conditions of these orders or any breach of Travlon’s obligations as a licence holder relevant to safety.
[120] The period for these orders to continue in force has been fixed to enable Travlon to continue in business over a peak period and to allow it to receive and act on the recommendations of the RTANZ. The revocations will take effect after 31 May 2018. Travlon will have to apply for new licences if it is to carry on in business after that time, subject to any order which might be made by the District Court on the
hearing of Travlon’s appeal or by the High Court on the hearing of Travlon’s substantive judicial review proceedings.
[121] The NZTA indicated through counsel there would be nothing to prevent Travlon making such an application but, for it to be successful, Travlon will no doubt have to satisfy the NZTA that it has made significant improvements to its operation and that it has the personnel and resources to ensure that its LPSVs are maintained in a manner and to a standard that ensures all those who use them are safe.
[122] Travlon have been partially successful with this application but my tentative view is that the parties should each bear their own costs with regard to this application. If costs are an issue, they will be dealt with on the basis of memoranda. Travlon’s memorandum must be filed within four weeks and any response from the NZTA is to be filed within a further two weeks.
Solicitors:
Wynn Williams, Christchurch
Raymond Donnelly & Co., Christchurch.
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