State v Transport Control Board, ex parte Yanuca Tours Ltd [1992] FJLawRp 3; [1992] 38 FLR 33 (24 February 1992)

[1992] 38 FLR 33

HIGH COURT OF FIJI

Revisional Jurisdiction

THE STATE

v

TRANSPORT CONTROL BOARD

ex parte

YANUCA TOURS LIMITED

Byrne J

24 February 1992

Judicial Review- renewal of road service licence- applicant's legitimate expectation- procedural fairness- Traffic Act (Cap 176).

The Transport Control Board had refused to renew the Applicants road service licence which had allowed it to operate a bus route which mainly serviced tourist hotels. Ordering certiorari to issue to quash the Board's decision the High Court HELD: that it had been affected by procedural unfairness.

Cases cited:

Banks v Transport Regulation Board (Victoria) [1968] HCA 23; (1968) 119 CLR 222
Board of Education v Rice and Others [1911] UKLawRpAC 18; [1911] AC 179
FAI Insurances Ltd v Winneke [1982] HCA 26; (1982) 56 ALJR 388
Hall v Jones (1942) SR (NSW) 203

Heatley v Tasmanian Racing and Gaming Commission [1977] HCA 39; (1977) 137 CLR 487
McInnes v Onslow-Fane [197811 WLR 1520
Reg. v The Metropolitan Police Commissioner ex parte: Parker [1953] 1WLR 1150
Regina v Barnsley Metropolitan Borough Council ex parte Hook, [1976] 1 WLR 1052

Rex v. Northumberland Compensation Appeal Tribunal ex parte Shaw [1951] EWCA Civ 1; [1952] 1 KB 338
Salemi v. MacKellar (No. 2) [1977] HCA 26; (1972) 137 CLR 396
Schmidt v Secretary of State for Home Affairs [1969] 2 Ch. 149
Tokyo Mart Pry Ltd v. Campbell and Another (1988) 15 NSWLR [sic]
Twist v Randwick Municipal Council [1976] HCA 58; (1976) 136 CLR 106

Motion for Judicial Review in the High Court.

G.P Shankar for the Applicant
M.B. Patel for the Respondent

Byrne J:

Applicant" had operated a bus service under Road Service Licence No. 12/26/ 25 granted to it by the Transport Control Board ("the Board") from the War prior to 26^th of August 1991 Yanuca Tours Limited, hereinafter called "the Applicant" had operated a bus service under Road Service Licence No. 12/26/25 granted to it by the Transport Control Board ("the Board") from the Warwick International Hotel to Nadi Airport with calls being made at other hotels en route. The licence also authorised the Applicant to conduct a service between Sigatoka and The Fijian Hotel and return. The service was designed to carry pre-booked passengers mainly tourists from specified hotels at a fare which was much higher than the fare for normal stage carriage use by the general public and there is uncontested evidence that the service was generally in great demand.

On the 5^th of April 1991 the Applicant lodged an application for renewal of its licence with the Board and this was advertised in accordance with the Traffic Act Cap. 176 on the 11^th of May 1991. On the 27^th of May 1991 a Statutory Declaration by Sharda Nand, Transport Manager of the Applicant was handed to the Chairman of the Transport Control Board when the matter was called for hearing in public but was adjourned.

The application was listed for hearing on the 29^th day of July 1991 when the solicitor for the Applicant, Mr. G.P. Shankar appeared for the Applicant and informed the Board:

(a) that the Applicant relied on the Statutory Declaration of Sharda Nand;

(b) the application was for renewal of a Road Service Licence which the Applicant had lawfully and properly operated for several years prior to the 27^th of May;

(c) that the bus used by the Applicant was always operated to carry pre-booked passengers but because it was not a routine stage carriage it some times did not call when it was advised that there were no passengers at the hotels where it was required to call. Except for circumstances beyond the Applicant's control such as sudden break-down or non-availability of parts, the buses always operated.

(d) that there was no complaint by the hotels from which the Applicant operated or from the public, mainly tourists; and

(e) that the only complaint was from Coral Coach Express (Fiji) Limited a competitor operator although at different times. The Applicant denied the complaint of Coral Coach.

This allegation took the Applicant by surprise but, through its counsel it denied the Transport Officer's allegations. Counsel informed the Board that the Applicant's records would show not only that the bus operated on those two dates but it would produce copies of bus fare receipts issued to passengers on the 17^th and 18^th of July 1991. The Chairman then stated that the Board would adjourn the matter to an unspecified date so that the Applicant could forward the relevant record and receipts to prove it operated on those two dates.

It is alleged by the Applicant and not denied by the Board that the Manager of Coral Coach made submissions from the public gallery to the effect that Coral Coach would have to cease business if the Applicant was allowed to operate at its existing fare.

The Chairman of the Board then informed the Applicant's counsel that the Board had a report prepared by its Transport Officer to show that the Applicant's bus did not operate on two days in July 1991 namely the 17^th and 18^th of July.

On the 6th day of August 1991 the Applicant's solicitors forwarded copies of tickets and other relevant records of the Applicant to the Board.

The Transport Officer was not called to substantiate the allegations made in his report nor did he give any evidence, nor was he cross-examined.

On or about 22^nd of August 1991 the Applicant learnt that the matter was to be put before the Board again on the 26^th of August 1991 although no reason was ascertained. The Applicant's solicitors wrote to the Board on the 24^th of August 1991 stating that they had already sent documents showing that the bus operated on the 17^th and 18^th July and mentioning the extremely short notice the Applicant had received of the hearing of the 26^th of August. Further the solicitor stated that because of a part-heard case in Lautoka the Applicant's solicitor would not be able to appear on the 26^th of August. He suggested that if the Board wanted to hear further submissions or take further evidence the Board should fix another date.

The Applicant's solicitors received no reply from the Board to their letters of 6^th and 24^th August but on the 27^th of August 1991 the Board wrote to the Applicant very briefly informing it that on the 26^th of August 1991 its application for renewal of its licence had been refused on the ground that the Board felt there was no public need for the service.

From that decision of the 26^th of August the Applicant now seeks Judicial Review. On the 6^th of September 1991 granted it leave to apply for Certiorari on the grounds:

(a) that the Board's decision refusing to renew the Applicant's licence was wrong, unlawful, unreasonable and unfair;

(b) that there was no evidence before the Board to justify its refusal to renew the Applicant's licence;

(c) that the Board's decision was bad in law that it did not give any reasons; and

(d) that the Applicant had received inadequate notice of the intention of the Board to list the matter for hearing on the 26^th of August.

On the 2^nd of October 1991 the Applicant Respondent both appeared before me through their solicitor and I then ordered the Respondent to file any affidavit in reply by the 25^th of October 1991. No such affidavit has been filed, nor have any submissions been made to me on behalf of the Respondent. By contrast, in his usual most comprehensive way, Mr. Shankar for the Applicant has provided the Court with a most helpful written submission covering twenty two pages and containing references to numerous authorities in support of the C Applicant's case. I have read all but two of the cases cited to me and the reason for my not reading these two is simply because they are not available in the Law Library. Many of them of course are familiar in as much as they relate to that subject much beloved by lawyers who practise in administrative law; I refer of course here to natural justice.

In the absence of any affidavit or submissions from the Board it would be simple for -me to dispose of this application by saying that I accept the submissions of the Applicant and grant the application for Judicial Review. However because I consider this case to be of some practical interest to bus operators and perhaps to the members of the legal profession who practise regularly before the Board I shall now give as concisely as possible my reasons for granting the Applicant Judicial Review and ordering Certiorari to go to the Board.

Essentially the Applicant argues that because it was the holder of an existing Road Service Licence and sought renewal of it, it was entitled to much more than the scant consideration its application apparently received from the Board. It is submitted that the Board was under a duty to inform the Applicant of any short-comings in its application and to give it an opportunity to be heard to answer the allegation made against it by Coral Coach Express (Fiji) Limited and by the Board's own Transport Officer. The Applicant concedes that under section 70 of the Traffic Act every application for a renewal of a licence shall be deemed to be an application for a new licence. However, it submits that, as a matter of law different considerations apply to an application for renewal as distinct from an application for a first licence. I agree with this submission. In Tokyo Mart M, Ltd v. Campbell and Another (1988) 15 NSWLR the Court of Appeal of New South Wales held that in appropriate cases, as part of the ordinary process of legislative construction, it is permissible to qualify the generality of words used in an enactment to give effect to the purpose of the enactment. In so holding the Court followed an earlier decision of the Full Court of New South Wales, Hall v. Jones (1942) SR (NSW) 203. In my view section 70 has to be read in the light of the case law applicable to the renewal of licences generally. Here it is convenient to refer to the High Court of Australia decision Banks v. Transport Regulation Board (Victoria) [1968] HCA 23; (1968), 119 CLR 222 in which the Court held that the possession of a taxi licence amounted to the possession of property. Barwick C.J. at page 231 declined to follow Lord Goddard C.J. in Reg. v. The Metropolitan Police Commissioner; Ex-parte: Parker [1953] 1 WLR 1150 at p.1154 who had held that the possession of a cab driver's licence amounted to the mere grant of a permission by a private person in respect of his own property, and as such liable to be withdrawn even at will and without reason.

In the later case of FAI Insurances Ltd v Winneke [1982] HCA 26; (1982) 56 ALJR 388 the High Court, of Australia held that the holder of an existing licence to insure employers for workers compensation had a legitimate expectation either that its licence would be renewed or that it would not be refused without their having an opportunity of meeting objections. At page 396 Mason J. said:

"Our starting point then is that an applicant for renewal of a licence generally has a legitimate expectation that his licence will be renewed when the statutory power is entrusted to a statutory authority. Does the appellant here have a similar legitimate expectation that its approval will be renewed? The answer to this question depends on the nature and effect of the statutory power, the circumstances of its exercise and the fact that the power is reposed in the Governor in Council"

Earlier at p.395 His Honour said:

"The fundamental rule is that a statutory authority having power to affect the rights of a person is bound to hear him before exercising the power (Twist v. Randwick Municipal Council [1976] HCA 58; (1976), 136 CLR 106, at p. 109; Heatley v. Tasmanian Racing and Gaming Commission [1977] HCA 39; (1977), 137 CLR 487, at p. 499). The application of the rules is not limited to cases where the exercise of the power affects rights in the strict sense. It extends to the exercise of a power which affects an interest or a privilege (Banks v. Transport Regulation Board (Vic.) [1968] HCA 23; (1968), 119 CLR 222), or which deprives a person of a 'legitimate expectation", to borrow the expression of Lord Denning M.R. in Schmidt v. Secretary of State for Home Affairs, [1969] 2 Ch. 149, at p. 170, in circumstances where it would not be fair to deprive him of that expectation without a hearing (Salemi v. MacKellar (No. 2) [1977] HCA 26; (1972), 137 CLR 396, at p. 419).

Natural justice in its application to decisions affecting the grant, refusal, renewal and revocation of licences has been beset with complexities. Some of these abstract complexities have been banished from the stage or at least relegated to the wings - the shadowy distinction between judicial or quasi judicial and legislative or administrative functions, the difference between decisions which determine antecedent or existing rights and those which result in the creation of new tights and the classification of licences into those which amount to no more than a mere permission or privilege and those which create an interest in, or a right of, property. It is now authoritatively established that the exercise of a power revoking a licence will attract the rules of natural justice, certainly when the revocation results in the loss of a right to earn a livelihood or to carry on a financially rewarding activity (Banks at pp. 233-234; Regina v. Barnsley Metropolitan Borough Council; Ex parte Hook, [1976] 1 WLR 1052; McInnes v. Onslow-Fane, [1978] 1 WLR 1520). On the other hand, there has been a greater reluctance to insist upon the application of natural justice when power is exercised to grant or refuse an initial application for a licence. Generally speaking, in such a case the issues are not clearly defined; they often involve policy issues; and, though they raise the general suitability of the applicant to hold a licence, they do not often generate allegations of past misconduct."

Later on the same page His Honour quoted from de Smith's Judicial Review of Administrative Action (4th ed. 1980) pp. 223-224, in which the author, after observing that non-renewal is usually a more serious matter than refusal to grant a licence in the first place said:

"Unless the licensee has already been given to understand when he was granted the licence that renewal is not to be expected, non-renewal may seriously upset his plans, cause him economic loss and perhaps cast a slur on his reputation. It may therefore be right to imply a duty to hear before a decision not to renew when there is a legitimate expectation of renewal, even though no such duty is implied in the making of the original decision to grant or refuse the licence."

I have quoted these passages in their entirety because Mr. Justice Mason refers to many of the leading cases on the subject I am concerned with here. In one of them, McInnes v. Onslow-Fane [1978] 1 WLR 1520 Megarry VC. speaking of the differences between "expectation cases" (which include non-renewals of licences) and "forfeiture cases" (which include revocation of licences), said at p.1529:

"The intermediate category, that of the expectation cases, may at least in some respects be regarded as being more akin to the forfeiture cases than the application cases; for although in form there is no forfeiture but merely an attempt at acquisition that fails, the legitimate expectation of a renewal of the licence ... is one which raises the question of what it is that has happened to make the applicant unsuitable for ... licence for which he was previously thought suitable."

The evidence satisfies me that the Board acted in a most irregular and unfair way towards the Applicant. It seems to me that all it had before it was a complaint, without any evidence by Coral Coach Express (Fiji) Limited and a report from the Transport Officer which, as it transpired could not be justified in the light of the Applicant's documents proving that the Applicant operated its service on the 17th and 18th July 1991. Not content with this however, the Board then went further. It adjourned the matter for decision on an unspecified date and then gave the Applicant in my view an unnecessarily and extremely short notice of the date on which it was to take further submissions, namely 26th August 1991. As to this the Applicant alleges, and again there is no evidence too the contrary, that the Board adjourned three other matters involving:

(a) Akbar Buses Limited;

(b) Chamanlal Transport;

(c) Empire Bus Service;

but not the Applicant's matter on the same ground of short notice. Why the Applicant was treated differently from these three Applicants is not clear but the Board was under a duty in my view to treat the Applicant in a similar way to that in which it treated the three other bus services. This is not merely a matter of the Board having the right to decide its own procedures but rather of it having a duty to treat all four Applicants even-handedly unless very good reason can be shown otherwise. No such reasons were given to the Applicant nor has this Court been given any.

Here the Applicant complains, in my judgment rightly, that the Board conducted an investigation or hearing into the Applicant's right to have its licence renewed in the absence of and behind the back of one of the parties and yet no opportunity was given to the Applicant to deal with the matters raised at the hearing on the 26th of August.

In one of the earlier cases in this century Board of Education v Rice and Others [1911] UKLawRpAC 18; [1911] AC 179 Lord Loreburn L.C. said at page 182:

"Comparatively recent statutes have extended, if they have not originated the practice of imposing upon departments or officers of State the duty of deciding or determining questions of various determination is sometimes a matter to be settled by discretion, involving no law. It will, I suppose, usually be of an administrative kind; but sometimes it will involve matter of law as well as matter of fact, or even depend upon matter of law alone. In such cases the Board of Education will have to ascertain the law and also to ascertain the facts. I need not add that in doing either they must act in good faith and fairly listen to both sides, for that is a duty lying upon every one who decides anything. But I do not think they are bound to treat such a question as though it were a trial. They have no power to administer an oath, and need not examine witnesses. They can obtain information in any way they think best always giving a fair opportunity to those who are parties in the controversy for correcting or contradicting any relevant statement prejudicial to their view."

These words have been quoted in numerous other cases over the ensuing years because the Courts have recognised that Lord Loreburn was here stating a basic principle of fair procedure which should be followed by administrative tribunals. In my judgment they apply clearly to the facts of this case.

As to the reason given by the Board for not renewing the Applicant's licence, namely that, there was no public need for the Applicant's service, the Applicant submits that the question of public demand or need does not apply to the Applicant's service in that it was operating a special type of bus service namely from hotels at a special fare mainly to cater for pre-booked passengers who were predominantly tourists from overseas. It is said, and I agree, that this type of service could not be said to cater for the public as a whole but a select and a limited class thereof. In any event the Applicant was given no opportunity to establish any demand by travellers on its buses and so I fail to see how the Board could be satisfied there was any or no public need for the Applicant's buses. In so holding that there was no need I consider that the Board misdirected itself.

This of course goes back to the Applicant's primary complaint here that it did not have any opportunity to put its case to the Board and I accept this and consider for that reason alone Certiorari must go to quash the Board's decision. However I do not consider that the matter ends there. In Reg. v Barnsley Council, Ex-parte Hook (1976) 1 WLR 1052 at 1057H - 1058B Lord Denning M.R. remarked:

"Now there are old cases which show that the court can interfere by certiorari if a punishment is altogether excessive and out of proportion to the occasion. In one case the Commissioners of Sewers imposed an excessive fine: and it was quashed by the Court of King's Bench on the ground that in law their fines ought to be reasonable: see Rex v. Northumberland Compensation Appeal Tribunal, Ex parte Shaw [1951] EWCA Civ 1; [1952] 1 KB 338, 350. So in this case if Mr. Hook did misbehave, I should have thought the right thing would have been to take him before the magistrates under the bylaws, when some small fine might have been inflicted. It is quite wrong that the Barnsley Corporation should inflict upon him the grave penalty of depriving him of his livelihood. That is a far more serious penalty than anything the magistrates could inflict. He is a man of good character, and ought not to be penalised thus.

On that ground alone, apart from the others, the decision of the Barnsley Corporation cannot stand. It is said to be an administrative decision: but even so, the court has jurisdiction to quash it. Certiorari would lie to quash not only judicial decisions, but also administrative decisions."

In the instant case the Board deprived the Applicant of its livelihood and I am C satisfied that such punishment was altogether excessive in the circumstances. Nothing adverse had been proved against the Applicant and yet the Board saw fit to deprive it of an income-earning capacity.

I do not propose to refer to any of the other cases mentioned by Mr. Shankar except [sic] to say that I have found them all helpful. To sum up the views I have expressed about this case I could do no better than to quote finally from one of the books Mr. Shankar refers to and a passage from which he quotes on page 13 of his submission, namely Professor Whitmore and Aronson in Review of Administrative Action (1978). There the authors say:

"It seems clear enough that the highest standards of natural justice should be attracted by the power to revoke a licence; since the revocation may involve loss of livelihood or loss of assets or, indeed, the failure of a business enterprise, the licensee should know the case he has to answer and be given every opportunity to meet that case. The position is less clear when the issue is the grant of a licence, or a registration, or an approval or consent."

I accordingly quash the decision of the Transport Control Board of the 26^th of August 1991 and order that the Board pay the Applicant's costs to be taxed if not agreed.

(Motion granted.)