Mamparn Pty Ltd v Ministry of Transport [2004] NSWADT 32

CITATION: Mamparn Pty Ltd v Ministry of Transport [2004] NSWADT 32 DIVISION: General Division APPLICANT PARTIES: Mamparn Pty Ltd RESPONDENT Ministry of Transport FILE NUMBER: 043027 HEARING DATES: 9/02/2004 & 11/02/2004 SUBMISSIONS CLOSED: 02/11/2004 DATE OF DECISION: 02/12/2004

BEFORE: Hennessy N - Magistrate (Deputy President) APPLICATION: Stay of proceedings MATTER FOR DECISION: Preliminary matter LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Passenger Transport Act 1990 Farquharson v NSW Department of Transport [1999] NSWADT 36 CASES CITED: Pinnacle Homes (Sydney) Pty Limited v Director-General, Department of Fair Trading [2001] NSWADT 222 Williamson v Director-General, Department of Transport [2000] NSWADT 16 APPLICANT REPRESENTATION: R Lancaster, counsel RESPONDENT D Jordan, counsel ORDERS: Stay granted on the following conditions:; 1. That Mamparn Pty Ltd not operate any vehicle unless it has undergone the required preventative vehicle maintenance; 2. That Mamparn Pty Ltd not operate any vehicles in breach of a defect notice applicable to that vehicle; pending the determination of this matter.

INTRODUCTION 1 This is an application by Mamparn Pty Ltd to stay a decision of a delegate of the Director-General of the Ministry of Transport to cancel two accreditations, namely, a Regular Passenger Service Accreditation (14920) and a Long Distance, Tourist & Charter Service Accreditation (15029). The main basis for the decision was that Mamparn Pty Ltd had operated vehicles and conveyed passengers without having defect notices in relation to those vehicles cleared by an authorised person or Heavy Vehicle Inspection Station (HIVS). As a result the Director-General could not attest that the directors and managers of Mamparn Pty Ltd are fit and proper persons, or have sufficient responsibility, to be accredited public passenger operators. Secondly it is asserted that the directors and managers of Mamparn Pty Ltd have not demonstrated the capacity to meet the relevant government standards relating to the safety of passengers and the public or vehicle maintenance. 2 Mr Miller, his wife Helen Miller and Mr Miller's parents are the directors of Mamparn Pty Ltd trading as Millers Coaches. The company provides bus services to six local schools in the Hunter area and also provides chartered bus services to various local organisations, such as bowling clubs. Mamparn Pty Ltd employs ten bus drivers and two mechanics. A book keeper is engaged part time as an independent contractor. RELEVANT LEGISLATION 3 Under s 10 of the Passenger Transport Act 1990 (the Act) the Director-General has power to cancel an accreditation. That section states that: Having regard to the purpose of an accreditation, the Director-General may at any time vary, suspend or cancel any person's accreditation. The purpose of an accreditation is set out in s 7(2)-(5) of the Act which state that: 4 Section 7(2) sets out the purpose of an accreditation: (2) The purpose of an accreditation under this Division is to attest: (a) that the accredited person is (or, in the case of an accredited corporation, the designated directors and managers of the corporation are) considered to be of good repute and in all other respects fit and proper to be responsible for the operation of a public passenger service, and (b) that the accredited person has demonstrated the capacity to meet the government's standards of: (i) financial viability, and (ii) safety of passengers and the public, and (iii) vehicle maintenance, to the degree and in the manner required in respect of services of the kind specified in the accreditation. 5 The Tribunal has jurisdiction to review a decision to cancel of an accreditation under s 52 of the Act and under s 38 of the Administrative Decisions Tribunal Act 1997 (ADT Act). Power to grant a stay and Tribunal's approach 6 The Tribunal's power to grant a stay of a decision is set out in s.60 of the ADT Act in the following terms: (1) Subject to this section, an application to the Tribunal for a review of a reviewable decision does not affect the operation of the decision under review or prevent the taking of action to implement that decision. (2) On the application of any party to proceedings for an application for a review of a reviewable decision, the Tribunal may make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of a determination of the application. (3) The Tribunal may make an order under this section only if it considers that it is desirable to do so after taking into account: (a) the interest of any person who may be affected by the determination of the application, and (b) any submission made by or on behalf of the administrator who made the decision to which the application relates, and (c) the public interest. (4) … 7 Previous decisions of the Tribunal have set out the overall effect of s.60 and the process for determining whether or not a stay should be granted. In Pinnacle Homes (Sydney) Pty Limited v Director-General, Department of Fair Trading [2001] NSWADT 222 at [4] the President Judge O'Connor stated as follows: The process to be gone through is first to address the criteria in s.-s.(2) and then to go on and address the criteria set out in s.-s.(3). The Tribunal to date has tended to take the view that where a licence holder is operating under a licence, it may be appropriate for the Tribunal to make orders staying any decision that might prevent the licence holder from continuing in business so as to secure the effectiveness of the determination of the application for review but that is not really the end of the matter. It is still necessary then to go on and consider the other criteria. 8 Judicial Member Rice elaborated on the meaning of "secure the effectiveness of the hearing" in Williamson v Director-General, Department of Transport [2000] NSWADT 16 at [15] and [17]: A stay will guard against situations where the Tribunal sets aside the decision under review, only to find that while waiting for the decision the Applicant has, because of the effect of the original decision, ceased trading or is unable to restart operations. In such circumstances the Tribunal's decision would, in the terms of s 60 not be an effective one. . . . As well, a financial determination will not be effective if but for a stay, the applicant would be likely to suffer `irreparable loss'. 9 Consequently, the Tribunal must first ask itself the threshold question of whether the effect of granting a stay will be to secure the effectiveness of a determination of the application. If that is the case, then the Tribunal must go on to take into account the interest of any person who may be affected, submissions by the administrator and the public interest in determining whether or not it is desirable to stay the decision pending a hearing. EVIDENCE 10 The documentary material before the Tribunal consisted of: · the application for review and the stay application; · Notice to Show Cause dated 9 October 2003; · Submissions made by Mamparn Pty Ltd on 31 October 2003 in response to Notice to Show Cause; · Statement of Reasons; · application for an internal review of a decision; · the Internal Review Decision from the Ministry of Transport dated 2 February 2004; · the Notice of Cancellation dated 19 December 2003 and Statement of Reasons; · a statement of Mr Gary Miller (managing director of Mamparn Pty Ltd) dated 9 February 2004; · Findings from Mamparn Pty Ltd Audit conducted 2 September 2003; · Vehicle Defect Notice in relation to Vehicle MO4448. 11 Mr Phillip Sullivan, Manager of Contract Compliance for the Newcastle region of the Ministry of Transport, gave oral evidence. Secure the effectiveness of the hearing 12 The applicant submitted that if a stay was not granted, the company may not be able to restart its business because other contractors would be engaged to provide the services that Mamparn Pty Ltd was currently providing. However, Mr Sullivan gave evidence that as the Minister's delegate and the signatory to all the school bus contracts in his region, he could virtually guarantee that the applicant would be re-contracted to provide the school bus services it was currently providing if the Tribunal ultimately set aside the decision to cancel its accreditation for Regular Passenger Services. Mr Sullivan is not responsible for contracts relating to the Long Distance, Tourist and Charter Service accreditation. 13 Given Mr Sullivan's evidence it is highly likely that the applicant's school bus contracts would be re-signed if the Tribunal set aside the respondent's decision. As the school bus contracts form 90% to 95% of the applicant's business, a stay is not necessary to ensure that Mamparn Pty Ltd can re-start its operations if the Tribunal ultimately makes a decision in its favour. 14 The second basis on which the applicant submitted that a stay was necessary to secure the effectiveness of the hearing was that it would suffer irreparable loss if a stay were not granted. The applicant cannot operate bus or charter services unless a stay is granted. Consequently if a stay is not granted, it would lose the benefit of income it would otherwise have received, pending the determination of the substantive application. As the Tribunal has no power to award damages to an applicant if a decision is set aside, that loss would not be recoverable. In those circumstances, I am satisfied that one outcome of granting a stay would be to prevent irreparable loss and thus "secure the effectiveness" of the hearing. Interests affected 15 There was no dispute that the interests of several people will be affected if a stay is not granted. The directors of Mamparn Pty Ltd, whose only income is derived from the business, will receive no income during the relevant period. Employees would need to be made redundant. Those employees would look for other work and may not be able to return to work for Mamparn Pty Ltd if the substantive application is successful. The assets of the company may need to be sold to continue to service debts. 16 There would be no impact on bus travellers because Mr Sullivan gave evidence that with 24 hours notice, arrangements could be made with other private contractors to service all of the schools currently serviced by Millers Coaches. Administrator's submissions and public interest 17 In Farquharson v NSW Department of Transport [1999] NSWADT 36 (17 May 1999) the Tribunal stated at paragraph [32] that: The Tribunal must balance various aspects of the public interest (as best they can be judged in the confined and urgent environment of a stay application). One is the public interest in maintaining in force an administrator's decision. The nature of the regulated activity must be considered and the way it impacts on the life of the community. Heed must be given to the objectives of the relevant primary legislation. Weight must also be given to the public interest in relieving individuals from the drastic effects, such as loss of livelihood that can often flow from an adverse administrative decision pending its re-consideration by the external tribunal. The ability of the external tribunal to dispose of the substantive application quickly is also an important matter relevant to whether a stay should be granted. As has frequently been noted, the discretion is a wide one. 18 The respondent submitted that a stay should not be granted because the continued operation of the applicant's business posed a risk to public safety. There were two bases for the cancellation of the accreditations. The first was that the applicant operated vehicles which were subject to Defect Notices before having those defect notices cleared. The second was that the applicant failed to adequately maintain its bus fleet in accordance with government standards. This failure related to the fact that the service intervals were often longer, and in some instances double, the government requirement of 5,000 kilometres. 19 In relation to the servicing of buses, there were thirteen instances of buses not being serviced at the required interval during the period from August 2001 to August 2003. The worst example was that during the period from 14 April 2003 to 24 June 2003 vehicle registered MO 3323 travelled 14,994 kilometres before any preventative vehicle maintenance was carried out. 20 On 22 April, 29 April and 15 August 2003 defect notices were issued in relation to certain vehicles operated by Mamparn Pty Ltd. All these defects were "minor" apart from one "major" defect. A defect can be "Formal Warning", "Minor", "Major" or "Major Grounded." The major defect related to Vehicle registered MO4448. Mr Sullivan agreed that the Defect Notice allowed that vehicle to be driven up until midnight on 15 August 2003. Part of the respondent's case was that the vehicle had been driven in contravention of the notice during the afternoon of 15 August 2003. The Tribunal hearing the substantive application will ultimately resolve the dispute on that issue. The respondent's submission was that even if the vehicle was able to be driven on 15 August 2003, it was driven on three subsequent occasions prior to 1 September 2003 when the defect was cleared. 21 In relation to the so-called "minor" defects, the respondent's case is that four vehicles were driven on a total of eight occasions before the defects had been cleared. Mr Miller's response was that on three of those occasions another vehicle, not subject to a defect notice, was used. Mr Miller also sets out his explanation as to why the vehicles were used on certain occasions even though the defect notices had not been cleared. 22 The respondent submitted that there was no evidence of any steps taken by Mamparn Pty Ltd to remedy these safety issues after they were brought to Mr Miller's attention. According to the respondent, the conduct of Mamparn Pty Ltd reflects a culture of non-compliance with safety standards and a systematic failure to provide a safe bus service. That conduct is not in accordance with one of the objects of the Act which is to "encourage public passenger services that meet the reasonable expectations of the community for safe, reliable and efficient passenger transport services." 23 The applicant submitted that no evidence had been led of the safety implications of any failure to service buses at the required intervals. Similarly, there was no evidence of the level of risk, if any, to public safety of driving vehicles with major or minor defects. There was a factual dispute about whether some of those vehicles had been driven. In addition Mr Miller had provided explanations as to the reason for other vehicles which were subject to defect notices being driven. I have also noted that each of the defects was eventually cleared. Consequently there was no evidence that buses with defect notices are currently being driven. Conclusion 24 There is no doubt that the financial interests of the directors and employees of Mamparn Pty Ltd will be adversely affected if a stay is not granted. A hearing has been set down for 23 March 2004. If a stay is not granted, the directors and employees would forego any income from the business until that time. 25 Against that, the Tribunal must weigh any risk to public safety that granting a stay would produce. The respondent's concern was that the applicant has not conducted itself in a way which conforms to the standards required of accredited operators in relation to safety matters. By implication, if that conduct continues, there may well be adverse consequences for the safety of passengers and other road users. I am not satisfied that there is an appreciable risk to public safety of Mamparn Pty Ltd continuing to operate until the hearing in approximately six weeks time. There was no suggestion that Mamparn Pty Ltd would continue to operate buses in breach of defect notices, nor is there any evidence of the level of risk to public safety of not carrying out services at regular intervals. However, in the interests of public safety I propose to grant a stay pending the determination of this matter subject to the following conditions: 1. That Mamparn Pty Ltd not operate any vehicle unless it has undergone the required preventative vehicle maintenance. 2. That Mamparn Pty Ltd not operate any vehicles in breach of a defect notice applicable to that vehicle. The substantive application is listed for hearing on 23 March 2004 at Court House, Maitland at 10.15a.m.