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IN THE HIGH COURT OF FIJI
STATE
v
TRANSPORT CONTROL BOARD
EX PARTE
NOCO DEVELOPMENT COMPANY LIMITED
High Court Judicial Review
Shameem, J
25 May, 2000
HBJ 49/99
Judicial Review - consideration of factors whether application delayed -meaning of undue: excessive, extreme, unjustifiable or going beyond what is appropriate - whether legitimate expectation of proper public hearing when issue pre-empted by earlier hearing - Road Transport Act ss64, 65, 66(2), 70 - High Court Rules O. 53 r. 4(1)
Applicant company applied for renewal of a road service licence and award of new road service licence. As there was a receiver appointed over the company, the respondent, with the applicant's consent allowed Latchan's Express Services Limited to service the Noco bus route on behalf of the applicant. The company was due to enter into joint venture with Latchan's. The Transport Control Board summarily dismissed the renewal application on the basis that the applicant's busses were not serviceable, based on a letter and representation at meeting that they do not wish to continue. It subsequently dismissed an application for a new road service license. Matters were not properly put before a public hearing, and decision made on basis of incorrect information.
Held - (1) There was a justifiable delay in lodging application for judicial review where there was no hardship to the respondent and no adverse effect to good administration by a delay of 5 months.
(2) The applicant was entitled to a legitimate expectation that the application would be considered at a public hearing.
(3) Failure to give the applicant an opportunity to be heard on issues led to findings of fact which are disputed and thus decision reached was procedurally unfair.
Judicial Review succeeds.
Cases referred to in judgment
appl Harikisun Limited v Dip Singh & Ors ABU0019./95S
cons Pacific Transport Company Ltd v Mohammed Jalil Khan & Transport Control Board ABU0021/96S
foll State v TCB ex parte S. Nair Transport HBJ020/96S
ref Attorney-General of Hong-Kong v Ng Yuen Shiu (1983) 2 AC 629 PC
ref Attorney-General of New South Wales v Quin (1990) 170 CLR 1
ref Council of Civil Service Unions v Minister for the Civil Service (1985) AC 374
foll Fraser v State Services Commission (1984) 1 NZLR 116
Davenesh P Sharma for the applicant
Vodo Tuberi for the respondent
25 May 2000.
JUDGMENT
Shameem, J
This is an application by Noco Development Company Ltd., to judicially review a decision of the Transport Control Board on 9th July 1999 dismissing the Company's application for a renewal of its road service licence. The application also seeks to review a decision of the Road Transport Board of the 31st of August 1999, dismissing the Applicant's application for a new road service licence.
The application seeks an order of certiorari to quash the decisions on the grounds that the Board acted unreasonably, arbitrarily and in breach of the Applicant's legitimate expectations.
The application is supported by the affidavit of Bruce Geoffrey Sutton sworn on 8th December 1999, receiver and manager of the Applicant Company.
Leave was granted by consent on 18th January 2000. The Respondent filed an affidavit in reply dated 28th January 2000. The further affidavit filed by the Respondent, of Iniasi Vodo Tuberi, sworn on 28th February 2000, annexed the relevant minutes of the Transport Control Board, relating to the Applicant's application for renewal, and issue of a road service licence.
The final affidavit of Bruce Geoffrey Sutton which was sworn on 16th March 2000, was filed on the same day.
The matter was heard on 2nd May 2000. The facts of this case as disclosed by the affidavits, and which are not in dispute, are as follows. The Applicant is a company which ran bus services for the Noco region. On 19th August 1999, a receiver was appointed to the Company by the Fiji Development Bank.
On 2nd June 1997, the Respondent, with the Applicant's consent, allowed Latchan's Express Services Ltd., to operate the Road Service Licence on behalf of the Applicant, although the licence remained in the Applicant's name. The two companies were intending to enter into a joint venture agreement to service the Noco bus route.
The Applicant had a loan agreement with the Fiji Development Bank, and the Company informed the Bank in November 1998, that it intended to enter into a joint venture with Latchan's.
On 28th June 1999 the Applicant's road service licence was due for renewal, and the Applicant made an application accordingly.
On 14th June 1999, in a meeting between the Respondent and the Fiji Development Bank, the Bank was told that the application would be considered at the Board's meeting on 28th July 1999.
On 7th July 1999, the Respondent summarily dismissed the Applicant's application for a renewal of the licence. An application for a new road service licence was made on 20th August 1999.
On 19th October 1999 the Respondent informed the Applicant's solicitors that the application for a new licence had been summarily dismissed on 31st August 1999. Reasons were requested and given in a letter dated 23rd November 1999.
That letter (annexed as Gyaneshwar Naidu's affidavit) stated inter alia as follows:
"We understand that you represent Mr Bruce Sutton (Receiver/Manager) of Noco Development Company Ltd., and in your letter on the above subject, dated 18th November 1999, you requested for reasons as to why
(1) Noco Development Co. Ltd's application to renew its RSL No. 12/3/145 was refused, and
(2) Noco Development Company Ltd. (Receiver and Manager) application for new road service licence was refused.
Noco Development Company Ltd.'s application for the renewal of its road service licence was received prior to the appointment of the receiver/ manager. The Company failed to satisfy the criteria under section 66 of the Traffic Act, in particular section 66(2(d) (e). At the time of the application, none of the company's buses was in roadworthy condition. The company's unwillingness to continue with the bus business could not be ignored, based on the Board's duty towards the public interest.
Secondly, the company's application for new road service licence was received after the Receiver/Manager was appointed. A company under receivership, applying for a road service licence opposes the basic criteria under the Act. The application for a new road service licence by your client was therefore summarily refused on the ground that it was frivolous, scandalous or vexatious, pursuant to section 65 of the Traffic Act."
On 30th June 1999, the Secretary to the Noco Tikina Council informed the Board that "they" were financially unable to maintain the four buses which had been taken off the road by the Road Transport Department. The Secretary suggested that Latchan Brothers be allowed to operate the route.
The Board decided not to make any decision on the issue until there was a report from the Road Transport Department.
On 9th July 1999, a flying minute was sent to all members of the Board on the issue. That minute informed the Board that a letter had been received from the Noco Tikina Council saying that all four buses were unserviceable, that the signature on the application was that of a Director of Latchan's Express, and not of Noco Development, and that Latchan's had applied to service the route. The minute recommended that the Board:
"Summarily refuse the application for renewal by Noco Development Co., as advised by SLO since their buses are not serviceable and based on the letter written on 22/6/99 and the representation made by their representative at the meeting on 30/6/99 that they do not wish to continue."
In fact the 2nd affidavit of Bruce Sutton states that the Noco Tikina Council holds 12.6% shares, the Directors being Nafitalai Cakacaka, Dhresh Latchan and Rohit Latchan. The letter written by Ratu Isoa Damudamu can therefore only be seen as a letter written on behalf of some of the shareholders of the company, and perhaps on behalf of the travelling public of Noco.
As to the application for renewal, the Board minutes of 31st August 1999 are relevant. At Annexure J of the affidavit of Gyaneshwar Naidu, the minutes of that (private) meeting, read as follows:
"It was known that Noco Development Company could not renew their Road Service Licence as all its buses were unfit for service. The buses listed on the application belong to Tebara Transport and an application on borrowed buses would not be entertained.
The application does not comply with section 66 of the Traffic Act and under section 63(1) is considered frivolous, vexatious and scandalous.
Noco Development Company is now insolvent and therefore cannot comply with section 65 of the Traffic Act which requires special attention.
On appointment, a receiver can only continue to manage the company's business as it was on the date of this appointment. On the date that the receiver was appointed Noco Development Company was no longer doing business in bus transport. The Receiver is therefore acting outside his power in applying for the Road Service Licence and in any case could not satisfy the criteria under section 66 which inter alia are financial stability, applicant's reliability and that it has the facilities at its disposal for use under the Road Service Licence.
RESOLUTION: The application was refused."
These are the facts of this case.
Delay
At the hearing of this application, counsel for the Respondent raised the issue of delay, as prohibiting the grant of certiorari.
Order 53 Rule 4(1) of the High Court Rules provides:
"Subject to the provisions of this rule, where in any case the Court considers that there has been undue delay in malting an application for judicial review or, in a case to which paragraph (2) applies, the application for leave under rule 3 is made after the relevant period has expired, the Court may refuse to grant -
(a) leave for the making of the application, or
(b) any relief sought on the application,
if, in the opinion of the court, the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person, or would be detrimental to good administration.
(2) In the case of an application for an order of certiorari to remove any .... proceeding for the purpose of quashing it, the relevant period for the purpose of paragraph (1) is three months after the date of the proceeding."
It is clear from the wording of this rule that the question of delay can be considered at both leave stage, and substantive application stage. However, as the Court of Appeal said in Harikisun Limited -v- Dip Singh and Others Civil Appeal No. ABU0019 of 1995S, the questions of substantial hardship, prejudice to rights and detriment to good administration are only relevant at the substantive hearing.
In this case the decisions to refuse the licences were made on 9th July and 31st August 1999. This application for judicial review was filed on 9th December 1999, five months after the decision not to renew, and four months after the decision not to grant a new licence.
I note however that reasons were not given until 23rd November 1999.
The question is whether the delay was undue, and whether it caused substantial hardship or prejudice to other persons, or is detrimental to good administration.
"Undue" means, according to the Court of Appeal in Harikisun Ltd. v Dip Singh & Others (supra) at page 8, "excessive, extreme, unjustifiable or going beyond what is appropriate."
In the circumstances, I do not think, that a delay of five months is excessive, extreme or unjustifiable. Nor do I consider that the delay has caused hardship to the Respondent or any other person. Although the Respondent has now awarded a licence to Latchan's Express, the evidence is that that company used its existing facilities to service the route and did not need to acquire further assets. Nor do I consider there to be any adverse effect, by the delay of five months, on the good administration of the Respondent Board.
In the circumstances, therefore, I consider the delay to be justifiable in the g circumstances; and I am satisfied that there is no hardship to any party or to good administration in allowing the application to be heard.
The Renewal of RSL 12/7/145
The evidence is that at a meeting on 14th June 1999 a meeting was held between the Bank and the Secretary of the Transport Board, Mr Gyaneshwar Naidu, at which the Bank was told that the application would be tabled for a public hearing on 28th July 1999.
Mr Naidu, in his affidavit does not deny this, but says (at paragraph 7) that the matter would have been part of the 28th July meeting, except that the issue was raised in a public meeting on 30th June 1999 which pre-empted, and decided the issue.
The Applicant says that this raised a legitimate expectation that there would be a proper hearing on 28th July 2000, at which the Applicant would be heard.
The minutes of the meeting of 30th June 1999, do not indicate why the Secretary to the Noco Tikina Council was allowed to speak about the application.
In Pacific Transport Company Ltd. -v- Mohammed Jalii Khan and Transport Control Board Civil Appeal No. ABU0021 of 1996S, the Court of Appeal described the principle of legitimate expectation as follows:
"Essentially it is that a person may in certain circumstances, have a legitimate expectation as to procedures to be followed by an administrative decision-maker prior to a decision being made. The expectation relates to a privilege advantage or benefit to which there is no legal right. It arises where –
(a) an express representation has been made to the person concerned, or to a group of people of which he or she is a member, that a certain procedure will be followed before a decision is made (Attorney-General of Hong-Kong -v- Ng Yuen Shiu (1983) 2 AC 629 PC, Attorney-General of New South Wales -v- Quin (1990) 170 CLR 1; or
(b) there is a longstanding practice of following a certain procedure before a decision is made (Council of Civil Service Unions -v- Minister for the Civil Service (1985) AC 374).
The privilege, advantage or benefit may be substantive in nature or only procedural. However, as Mason C.J. stressed in Quin (supra) at p.21, when applying the concept of legitimate expectation, a Court must "avoid confusion between the content of the expectation and the right to procedural fairness"."
In this case, the Applicant claims that the expectation arose in the form of (a) above. It was an expectation that the application would be considered at a public hearing.
I find on the evidence that such a legitimate expectation did arise, and that as a result, the Board failed to conduct the exercise of considering the application in a procedurally fair manner.
Procedural Fairness
Even if I had not decided that a legitimate expectation had arisen, I would have found that the refusal of the application summarily, was procedurally unfair.
The Board says that the application was refused because the buses were unroadworthy. However, it appears from the flying minute (Annexure F to Mr Naidu's affidavit) that reliance was also given to a letter by Noco Tikina Council that it did not wish to continue with the operations of the Noco bus service.
The Council does not appear to have had any authority to speak on behalf of the Applicant. If the letter was written on behalf of the public at Noco, then the Applicant had no opportunity to rebut the suggestions that the services provided were unsatisfactory.
Furthermore, the finding made by "SLO" (Senior Legal Officer) that the application was invalid, because it was signed by one Dhresh Latchan, should have been put to the Applicant. The affidavit of Bruce Sutton shows that Dhresh Latchan is a Director of the Applicant Company and clearly had powers to make the application.
The Applicant claims that the 4 buses servicing the route had been deliberately made unroadworthy by Latchan's Express, so that the Applicant's application was unsuccessful, and so that Latchan's would get the licence. Of course, Latchan's did in fact get the licence.
This is clearly a matter which should have been put before the Board in a proper public hearing. It appears that the decision of the Board was made on the basis of information which was partially incorrect, and which ought to have been put to the Applicant to allow it to be aired properly.
Section 66(2) of the Road Transport Act provides as follows:
"In exercising its discretion to grant or refuse a road service licence in respect of any route and its discretion to attach any conditions to any such licence, the Board shall have regard to the following matters:
(a) the extent to which the proposed service is necessary or desirable in the public interest;
(b) the extent to which the needs of the area through which the proposed route will pass are already met;
(c) the desirability of encouraging the provision of adequate and efficient services and eliminating unnecessary and unremunerative services;
(d) the applicant's reliability, financial stability and the facilities at his disposal for carrying out the proposed services;
(e) the number, type and design of vehicles which the applicant proposes to use under the licence;
(f) any evidence and representation received by it at any public sitting held in accordance with the provisions of section 65 and any representations otherwise made by local authorities, public bodies or any persons carrying on transport services of any kind likely to be affected."
Section 70 provides that the same procedures apply to renewal of licences as they do to applications for new licences. Section 65 provides that when the Board receives an application which complies with section 64, and which, in the opinion of the Board "is not frivolous, scandalous or vexatious" the Board shall advertise, and conduct a hearing.
In considering the application scandalous and vexatious, the Board clearly decided that the application did not satisfy the section 66 criteria of roadworthiness. The information on which the Board relied was not only the result of the investigation by transport officers as to the condition of the buses, but also the letter from the Noco Tikina Council, which appears to have had no authority to speak for the Applicant. Furthermore, the investigation report at Annexure G to the Naidu affidavit, shows that the vehicles were unlicensed, not that they were unlicensed because they were unroadworthy.
Given the evidence of Bruce Sutton, that the buses were deliberately kept unlicensed by Latchan's Express, which then got a licence to operate the route, the decision of the Board that the application should be summarily dismissed, must be open to question.
The words "frivolous, vexatious and scandalous" are normally used in describing applications which are an abuse of the process, and are obviously unsustainable.
Although the Board undoubtedly has powers to dismiss applications on these grounds without any further investigation or inquiry, the exercise of that discretion must be based on accurate information.
In my view, the Board failed to act fairly, in summarily dismissing the renewal application, without ensuring the validity of the facts before it.
Even if the Applicant had failed to show legitimate expectation, it would have succeeded in its ground that the Board's decision to dismiss the application summarily was procedurally unfair, and based on inaccurate information.
The decision not to renew the RSL is quashed.
The Refusal of a New Licence
Section 65 undoubtedly gives the Board the power to dismiss applications without a hearing where they are frivolous or vexatious.
However, in denying the Applicant a hearing when it had been servicing a bus route for some years, the Board failed to act in a way that was procedurally fair. In Fraser -v- State Services Commission (1984) 1 NZLR 116,122 it was held that even when there is a discretion to conduct an inquiry conferred by statute, a refusal to exercise that discretion may constitute a denial of natural justice if fairness demands such an inquiry.
The basis for the refusal of a new licence, was financial instability. Counsel for the Board argued that the fact that the Company was in the hands of a receiver spoke volumes about the financial position of the Company.
Again, the application was dismissed without a hearing, and on the basis that the buses were "unfit for service", and that the Applicant was "insolvent."
As the affidavit of Bruce Sutton alleges, the Board erred in fact, on both these issues. Scott J said in The State -v- Transport Control Board, ex parte S. Nair Transport Judicial Review HBJ020/1996S, that there is no precise procedure to be followed by the Board in considering applications under section 65 of the Traffic Act. "All that was required was that the procedures adopted, were fair."
In this case, if the Board allowed the receiver of the company to answer queries on its financial position, it would have received far more accurate information about the applicant's financial stability, then relying as it did on representations made by the Tikina Council which could not speak for the Company. It would certainly have been told of the role played by Latchan's Express in the application and joint venture proposals, the circumstances in which the vehicles had been taken off the road, and the Applicant's ability to service the route.
The failure to give the Applicant the opportunity to be heard on these issues, led to findings of fact which are disputed by the Applicant.
This failure leads me to remove the decision into this court, and to quash it, on the ground of procedural unfairness.
In summary, the applications for certiorari to quash both decisions are allowed.
The Respondent must pay the Applicant's costs to be taxed if not agreed.
Applications for certiorari to quash decisions allowed.
Marie Chan
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