Lal -v- Director-General, Department of Transport [2001] NSWADT 74

CITATION: Lal -v- Director-General, Department of Transport [2001] NSWADT 74 DIVISION: General Division APPLICANT PARTIES: Sashi Lal RESPONDENT Director General, Department of Transport FILE NUMBER: 003255 HEARING DATES: 03/04/2001 SUBMISSIONS CLOSED: 04/03/2001 DATE OF DECISION: 05/10/2001

BEFORE: Hennessy N (Deputy President) APPLICATION: Passenger Transport Act - taxi operator - cancellation of accreditation - Taxi operator - cancellation of accreditation MATTER FOR DECISION: Principal matter LEGISLATION CITED : Passenger Transport Act 1990 CASES CITED: Berry v Director-General, Department of Transport [2000] NSWADT 71 APPLICANT REPRESENTATION: N Mayell, barrister RESPONDENT A Wozniak, solicitor ORDERS: 1. The decision of the Director General to cancel Ms Lal's accreditation to operate a public passenger service is affirmed.

Introduction 1 On 18 July 2000 the Director-General of the Department of Transport (the Director-General) cancelled Ms Lal's accreditation to operate up to 28 taxis. The decision was made following compliance checks on the taxis undertaken by officers of the Department of Transport (the Department) on 13 April 2000. Among other things, the Department found that Ms Lal had operated a public passenger service using vehicles maintained at a sub-standard level. 2 On 24 July 2000 Ms Lal applied to the Tribunal under s52 of the Administrative Decisions Tribunal Act 1997 (the ADT Act), for a review of the decision to cancel her accreditation. Ms Lal applied for the Director-General's decision to be varied to allow her to be given a Level 1 accreditation. That accreditation would allow her to operate 1-3 licensed vehicles as a public passenger service. Relevant legislation and jurisdiction 3 The Director General has power to suspend or cancel an accreditation under the Passenger Transport Act 1990 (the Act). Section 10(1) states that: (1) Having regard to the purpose of accreditation, the Director-General may at any time vary, suspend or cancel any person's accreditation. 4 Section 4 of the Act sets out the objectives of the Act. It includes the objective: (e) to encourage public passenger services that meet the reasonable expectations of the community for safe, reliable and efficient passenger transport services. 5 The Act establishes a scheme for both accreditation and driver authorities. Accreditation enables a person to carry on a public passenger service, that is a service which carries passengers for a fare or other consideration. Ms Lal held both an accreditation to operate taxis and an authority to drive taxis. Her authority to drive taxis is not affected by the decision to cancel her accreditation. 6 Section 7 sets out the purpose of accreditation: (1) A person who: (a) carries on a public passenger service by means of a bus or other motor vehicle; guilty of an offence unless the person is an accredited service operator for that service. Maximum penalty: 1,000 penalty units. (2) The purpose of 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. (3) Standards for the purposes of subsection (2) (b): (a) may be prescribed by the regulations; or (b) to the extent that they are not so prescribed, may be determined and published by the Director-General and made available to interested persons. (4) Any person wishing to obtain from the Director-General a copy of a standard published under subsection (3) (b) must pay the fee (if any) prescribed by the regulations. (5) Standards published under subsection (3) (b) may be re-determined by the Director-General from time to time, and are to be re-published and made available as occasion requires. 7 Under s 7 of the Act, the purpose of accreditation is to "attest" that the operator is of good repute and in all other respects fit and proper to be responsible for the operation of a public passenger service. In addition, the person must meet specific government standards relating to certain matters including vehicle maintenance. 8 The Tribunal has jurisdiction to hear this case under s 52(1) of the Act which states that: Any person whose application under Part 2 has been refused, or whose accreditation or authority has been varied, suspended or cancelled may apply to the Administrative Decisions Tribunal for a review of the refusal, variation, suspension or cancellation. 9 The powers of the Tribunal when reviewing a reviewable decision are set out in s 63(3) of the ADT Act. That section states: (3) In determining an application for the review of a reviewable decision, the Tribunal may decide: (a) to affirm the reviewable decision, or (b) to vary the reviewable decision, or (c) to set aside the reviewable decision and make a decision in substitution for the reviewable decision it set aside, or (d) to set aside the reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal. Issue 10 The issue for the Tribunal is whether the Director General made the correct and preferable decision in cancelling Ms Lal's taxi operator's accreditation. (See s 63(1) ADT Act). The Director General found that Ms Lal had not demonstrated the capacity to meet the government's standards for the safety of passengers and the public, or sufficient responsibility and aptitude to provide services in accordance with those standards. The Director General also found that Ms Lal's performance as an operator had deteriorated. Documentary evidence 11 The documentary evidence presented to the Tribunal comprised two Departmental files relating to Ms Lal. File 1 includes documents dating from Ms Lal's first application in 1992, including: (i) history (ii) audit reports of the 7 August 1998, 20 May 1999, 13 April 2000; (iii) general correspondence between the Director General and Ms Lal; (iv) counsel's submissions to the Department of 10 July 2000 on behalf of the applicant to show cause why her accreditation's should not be canceled. (v) Ms Lal's applications for accreditation and variation of accreditation, dated 13 April 1992 (Level 1), 28 February 1995 (Level 2), 26 November 1997, 30 September 1999. Annexed to each accreditation applications are: · statements made by financial institutions or accountants attesting to Ms Lal's financial viability; · statements and references written by Approved Industry Representatives attesting to Ms Lal's good repute within the industry; and declarations made by Ms Lal that she understands and will comply with, among other things, the standards of vehicle maintenance required of an operator of taxis. 12 File 2 includes: (i) defect notices arising from random inspections; and (ii) "2 X 6" inspection notices. 13 Ms Lal did not tender any separate documentary evidence or give any oral evidence. The Department's files included many documents provided by Ms Lal in support of her past applications and in defence of reductions to the number of taxis she was accredited to operate. Counsel for Ms Lal referred the Tribunal to the submissions he prepared on 10 July 2000 relating to the internal review process. 14 The documentary evidence revealed that Ms Lal has been in the taxi industry for 20 years. She started driving taxis in 1980. When the accreditation scheme was developed, Ms Lal applied for accreditation as an operator. 15 On the 21 April 1992, after satisfactorily completing the Taxi Operator Accreditation Course, the Director-General granted Ms Lal an unconditional Level 1 accreditation to operate 1-3 licensed taxis. The Director General renewed this accreditation on 18 July 1994. 16 Ms Lal applied for a second operating accreditation on 28 February 1995. The Director General gave Ms Lal an unconditional Level 2 accreditation on the 3 March 1995. This enabled her to operate more than three licensed taxis. 17 In mid-June 1996 and late 1997, some of the taxis operated by Ms Lal (T283 and T4157) were inspected at random by Department officials and immediately taken out of service. 18 Ms Lal applied for a third operating accreditation on 26 November 1997. The Director-General approved her application to operate up to 40 licensed taxis on 27 November 1997. 19 Between December and July 1998, many more taxis operated by Ms Lal were inspected by Departmental officials. Again, some were immediately taken out of service. For example, vehicle T9060 was taken out of service on 24 December 1997 and vehicle T9052 was taken out of service on 10 June 1998. 20 A field audit was conducted by officers of the Department on 7 August 1998. At the time of the audit, Ms Lal was operating 26 taxis, although she was accredited to operate 40. The Audit Report produced on 14 August 1998 indicates that although no taxis were available for inspection, there were a large number of defect notices on file. It was also noted that Ms Lal's maintenance reporting was inadequate and, in some instances, inaccurate. An officer of the Department interviewed Ms Lal on 14 September 1998. 21 On 7 August 1998, the Director General reduced Ms Lal's operating accreditation to a maximum of 20 licensed taxis. The reason for reducing the number of taxis Ms Lal could operate was that she had not fully complied with s 7(2)(b)(iii) of the Act. (See paragraph 7 above.) 22 Following this reduction in the number of taxis Ms Lal was accredited to operate, Departmental officials randomly inspected taxis in Ms Lal's fleet. Some vehicles were given defect notices for minor defects. Others, for example vehicle T9019, had major defects. On 13 August 1998, vehicle T9019 was put on what is known in the industry as "6 X 2" inspection. A "6 X 2" inspection regime means that a vehicle has to be inspected every 2 months, instead of every 3 months, for 6 months. 23 A subsequent field audit was conducted on 20 May 1999. At the time of this audit, Ms Lal was operating all the 20 vehicles her accreditation allowed. An Audit Report dated 20 May 1999 indicates that Ms Lal's operation was subject to the audit because of the previous audit and because the Roads and Traffic Authority (RTA) had put a number of her vehicles on "6 X 2" inspections. No vehicle was available for inspection. Departmental officers found that, on the whole, vehicle maintenance records were sufficient although drivers' work sheets were being completed incorrectly. The Departmental officer concerned recommended that half Ms Lal's fleet be inspected at the RTA's facility in Botany. The file does not indicate that there was any change to her accreditation at that time. 24 Ms Lal then applied for the number of vehicles she could operate to be lifted to 40 taxis. The Director-General increased her accreditation to 28 cars on 3 November 1999 following a satisfactory Road Worthiness Assurance System report. 25 Following this increase, taxis operated by Ms Lal were randomly inspected by Department officials. On 13 August 1998, vehicle T839 was put on "6 X 2" inspection because it demonstrated major and serious defects on random inspection. 26 On 13 April 2000, 23 of the 24 vehicles operated by Ms Lal at that time were inspected at the RTA's Botany facility by both Department officials (in relation to the appearance of the vehicles) and the RTA (in relation to the mechanical order of the vehicles). The Department found such faults as dirty boot and cargo areas, missing information and fare labels and inoperative air-conditioning. The RTA found such defects as inoperative lights and oil leaks. 27 On 19 June 2000 the Director General's delegate informed Ms Lal that he was considering cancelling her accreditation for the reasons set out in an attached Statement of Reasons. The delegate concluded that the investigations of 13 April 2000 "and a review of your operator file have revealed a high level of non-compliance in the areas of Operator Accreditation Standards and Roadworthiness Assurance Guidelines". 28 By letter of 6 July 2000, the Department gave notice of its intention to cancel Ms Lal's accreditation. Ms Lal was given 14 days to "show cause" why her accreditation should not be cancelled. 29 Mr Mayell, counsel for Ms Lal, responded on his client's behalf on 10 July 2000. He submitted that: (i) the RTA and Department officials had conducted a biased inspection, indicated by the issue of defect notices for very minor defects; (ii) maintenance work and recording is kept at an appropriate standard; (iii) Ms Lal has had 20 years experience in the taxi industry and is a fit and proper person within the meaning of the Act; (iv) Ms Lal would suffer considerable financial and professional hardship if her licence is cancelled. 30 In addition, Mr Mayell made specific submissions on taxis T9052, T7311, T9044, T2209, T2999, T7416, T9124, T9048, T836, T4607 and T3268. In some cases he submitted that the defects had been corrected since the 13 April 2000. On others, he disputed the findings of the RTA and Department officers. 31 On 18 July 2000, following an internal review of the decision, the Director General's delegate wrote to Ms Lal affirming the original decision.. The reasons given for the cancellation were: (i) the number and frequency of defects found on vehicles operated by Ms Lal; (ii) Ms Lal's failure to provide quarterly inspection reports to the Network; (iii) doubt as to the accuracy of Mr Lal's Maintenance Records - Inspection dates not supported by the date recorded on the Inspection Reports; (iv) the need for the RTA to include 15 of Ms Lal's vehicles on their "6 X 2" Inspection Program; (v) the decline in Ms Lal's performance as an accredited operator although she claiming [sic] to have 20 years experience in the taxi industry. 32 The Director General also commented that: I note that Ms Lal's mechanics claim they were unable to locate some faults found by the RTA and considered only minor adjustment was required to others. Perhaps if they had been more diligent, the faults found by the RTA would have been rectified in the first instance. 33 Ms Lal lodged an application in the Tribunal on 24 July 2000. Oral evidence 34 Oral evidence was given by John Goodwin for the Director General. Mr Goodwin is a motor mechanic who has been employed with the RTA for 22 years. He said that on 13 April 2000, he and Mr Malone from the Department, inspected several vehicles operated by Ms Lal. He was responsible for the mechanical side of the inspection and Mr Malone was concerned with the appearance of the vehicles. 35 Mr Goodwin gave specific evidence on a stand-by taxi which he inspected on that day. He said that he checked the suspension unit of the wheel and found that the front right wheel was "hopping". Following further investigation he concluded that the wheel was insecure because it had been fitted with the wrong wheel studs. Minor defects detected on other vehicles included the absence of an "LPG gas" sticker. Mr Goodwin gave evidence that he wrote an inspection report which recorded both major and minor defects. 36 On cross-examination, Mr Goodwin conceded that the absence of an LPG Gas sticker might seem minor but he recorded all faults regardless of how minor they were. He said that he performed his inspection of the vehicles in accordance with his normal procedure. Mr Goodwin said that this procedure reflected the RTA guidelines and relevant regulations. Mr Goodwin said that he had no further involvement with vehicles operated by Ms Lal after 13 April 2000. Findings of Fact 37 The majority of facts alleged by the Director General were not in dispute. However, Mr Mayell on behalf of Ms Lal, submitted that by Mr Goodwin conducted in an over-zealous, perhaps pedantic inspection of Ms Lal's vehicles on 13 April 2000. Although some of the defects noted were minor, the inspections were conducted in a routine and appropriate manner. Reasoning and decision 38 Section 7 of the Act sets out a number of requirements before a person can be accredited to operate public passenger vehicles. The absence of one of these requirements will mean that the person cannot be accredited. 39 The requirement which was the focus of these proceedings was whether Ms Lal had demonstrated the capacity to meet the government's standards of safety of passengers and public and vehicle maintenance. Whether or not she is of good repute, or a fit and proper person to be accredited to operate a taxi service, would only need to be addressed if the other more specific requirements are met. Number and seriousness of maintenance defects 40 Mr Wozniak, for the Director General, submitted that the standard expected of operators is even higher than the high standard expected of drivers. This is reflected in the penalty of 1000 penalty units ($110,000) placed on those operating a service without the proper accreditation. 41 Mr Wozniak emphasized the seriousness and magnitude of maintenance defects found in Ms Lal's vehicles since 1995. He submitted that between 1995 and 1999 vehicles operated by Ms Lal had attracted 47 defect notices. Since 1998, 15 of Ms Lal's vehicles have been placed on the RTA "6 X 2" inspection program due to dangerous defects being detected. 42 While Mr Wozniak conceded that many of the defects were minor, there were many which were so major as to require vehicles to be immediately removed from the road. Mr Wozniak also pointed out that the number of cars which had to be put on "6 X 2" regime of inspection indicated that there was a consistent deterioration in the level of maintenance which Ms Lal gave her vehicles. 43 Mr Mayell submitted on behalf of Ms Lal that many of the defects, such as the missing LPG sticker, were minor and requested that the Tribunal vary the Director General's decision to accredit Ms Lal's to operate between 1 and 3 taxis. 44 The purpose of the Act is to create and maintain a regulatory scheme which has as one of its key objectives, safe, efficient and reliable service. Some of the defects recorded in relation to taxis operated by Ms Lal were minor. But there are many examples of major defects which, if undetected, could have threatened the safety of the taxi-users and the public at large. Maintenance Record Keeping 45 Mr Wozniak submitted that Ms Lal's maintenance records showed that many of the 23 vehicles inspected by the RTA and Department on 13 April 2000 had been inspected by her mechanic within 7 days prior to that inspection. He said that in some cases, the RTA official found that cars approved by Ms Lal's mechanic, or reported as having minor defects, actually had major defects. Mr Mayell pointed out that Ms Lal is not a mechanic and that she must rely on the services of a mechanic she employs to maintain her taxis. 46 It is Ms Lal's responsibility to comply with the provision in relation to inspecting and record maintenance in relation to the vehicles she operates. She must ensure that her employees are completing those tasks satisfactorily. On the basis of all the evidence I agree that the Director General cannot attest that Ms Lal has demonstrated the capacity to meet the government's standards of safety of passengers and public and vehicle maintenance. Consequently it is not necessary to consider the further question of whether Ms Lal is of good repute and in all other respects fit and proper to be responsible for the operation of a public passenger service. Variation or cancellation 47 In his "show cause" submissions, Mr Mayell stated that cancellation would cause Ms Lal considerable hardship. He referred to the considerable financial investment she has put into taxis over 20 years in support of this submission. Hardship to Ms Lal is not a factor which the Tribunal can take into account in determining whether or not the Director General has made the correct and preferable decision. 48 In further support of his application for a variation, Mr Mayell submitted that in the three years in which Ms Lal held an accreditation to operate only 1-3 vehicles, (1992-1995) she kept her fleet at an acceptable standard of maintenance. The Department's files indicate that some vehicles were removed from the road following inspection reports in 1996. 49 Mr Mayell submitted that it was difficult for one person overseeing 24 cars to ensure every regulatory requirements is met. Mr Mayell said the his client conceded that 24 taxis were too many for her to operate and that she considered 1-3 to be a more manageable fleet. 50 In a similar case, Berry v Director-General, Department of Transport [2000] NSWADT 71, Mr Berry applied to the Tribunal to review the Director-General's decision to continue the suspension of his accreditation. The decision followed a breach of s 59 the Road Transport (Safety and Traffic Management) Act 1999. In that case, it was alleged that on several occasions Mr Berry failed to fit a vehicle monitoring device in one of his vehicles. The Tribunal affirmed the Director-General's decision to continue to suspend Mr Berry's accreditation. 51 The breaches Berry are less serious and numerous than those detected by the Department in Ms Lal's vehicles. Many of those defects threatened the safety of driver, passenger and public. 52 Mr Wozniak submitted that no direct evidence and very little in the way of submissions was put to the Tribunal to justify a variation of the decision. I agree that there was no evidence which indicates how Ms Lal proposes to comply with the standards in relation to 1-3 taxis. Apart from pointing out the minor nature of some of the defects and Ms Lal's lack of mechanical knowledge, Ms Lal offered no reasons for her failure to comply with the government's standards for vehicle maintenance. Had Ms Lal given a plausible reason for that failure and a strategy for ensuring that she could comply with the required standards in relation to 1 to 3 vehicles, I may have considered a variation to the decision. Orders 1. The decision of the Director General to cancel Ms Lal's accreditation to operate a public passenger service is affirmed.