Revocation of a Transport Service Licence

In our previous article, we talked about the “fit and proper person” test and why it was important for you to be “fit and proper” to keep your transport service licence (TSL). This article deals with the revocation of a TSL.

Revocation usually follows a determination by the NZTA that the holder of the TSL or any “persons in control” are no longer a “fit and proper person”. In most instances, when the NZTA feels that there are issues with the licence holder, they engage with the licence holder to try and address the issues. The three main issues that we regularly come across are vehicle maintenance and safety issues, driver and company offending and infringements and fatigue management, including worktime and log books. NZTA encourages operators to implement policies that will address the issues and monitor the operators over a period of time to see if the policies are rendering results. Previously, a low ORS score would attract attention and would lead to NZTA engaging with an operator to improve their scores. The ORS is no longer being used by NZTA. There is therefore no standard indicator as to what is deemed unacceptable. It is now in NZTA’s discretion when and what to take issue with.

When engagement does not work, or is not up to the satisfaction of NZTA, NZTA may then proceed with revoking a TSL. The Land Transport Act 1998 (the Act) provides a procedure that NZTA must follow before revoking a TSL. The procedure depends on the reason for proposing to revoke a TSL. If the proposed revocation is on the basis that someone other than the licence holder is not a fit and proper person, then the Agency must specify the steps that NZTA require to be taken if the licence is not to be revoked. This may include a requirement that the person concerned cease all involvement in the service within a specified period. If the TSL holder complies with the requirements, then the TSL cannot be revoked. This situation usually includes notices where NZTA is of the opinion that a company is fine however the Director is not. NZTA may require that the director cease all involvement with the Company.

If NZTA proposes to make a decision to revoke a TSL, for any reason, it has to give notice in writing:

  1. To the person directly affected by the proposal;
  2. Inform that person of the grounds for the proposed decision;
  3. Specify a date by which submissions may be made to NZTA in respect of the proposed decision. This date must not be less than 21 days after the date on which the notice is served;
  4. If appropriate, specify the date on which the proposed decision will, unless NZTA otherwise determines, take effect. This date cannot be a date earlier than 28 days after the date the notice is given;
  5. Notify the person of the person’s right of appeal in the event of NZTA proceeding with the proposed decision;
  6. Specify such other matters that NZTA has taken into consideration when making the decision to issue the proposal.

We strongly advise anyone who is in this situation to take immediate legal advice from someone who has knowledge of such matters. NRC members are able to call us for a free chat if they are in this situation, and we strongly recommend that you take advantage of this service. Time is of the essence once a proposal has been served.

The NZTA was always approachable and operators were able to work with NZTA to resolve the issues that were identified in the proposals. However, the recent shift of NZTA towards a tougher stance on “compliance” has seen an erosion in that approach. It is therefore advisable that during this process you determine what is required to be done, what the Act and other legislation provides as your duties and how you will address those to satisfy NZTA’s concerns. Personal and financial circumstances in most cases are irrelevant. Any submission to NZTA must be made after obtaining your full file from NZTA so that you are aware of all the issues and interactions that they have considered. It is only when you have a full picture of what NZTA is considering, that you can counter the concerns that they have. These may include policies to deal with employees, maintenance policies and even fleet management or upgrades. If you have addressed all these issues properly and adequately you will not only have a better chance of the matter not going any further, but to deal with it if it does.

So what happens when NZTA is not satisfied with your submissions and actions over the submission period? They issue a Notice of Revocation. This has to be in writing and should notify you of:

  1. NZTA’s decision; and
  2. the date on which the decision will take effect; and
  3. the right of appeal

We have mentioned the right of appeal twice so far. Any person who is dissatisfied with any decision by NZTA in respect of the grant, issue, revocation, or suspension of a TSL may appeal to the District Court against that decision. The court can confirm, reverse, or modify the decision appealed against. However, every decision of NZTA appealed against continues in force pending the determination of the appeal. That means that if your TSL is revoked, it remains revoked unless the District Court determines otherwise. This process can take over three months. You cannot operate a transport service with the TSL that has been revoked.

Another option is to challenge NZTA’s decision in the High Court by filing a judicial review application. This is an application to the High Court, asking a Judge to review the actions or decisions of NZTA in revoking your licence. This challenges the basis of the decision on the grounds that NZTA have acted outside the powers given to them by the law. The advantage of a judicial review application is that the High Court has powers to issue an injunction against the revocation of the TSL until the High Court has determined the application. There have been successful injunction applications, on the basis of judicial review proceedings, this year. The number of such applications to the High Court have increased considerably since NZTA’s new policy came into force late last year. We have acted for clients who have successfully applied to the High Court to stay a revocation pending a hearing. These applications can be costly and onerous on the operators.

Although no operator wants to find themselves in this position, we are now starting to see more and more operators going through this process. Between 3 May 2019 and 13 August 2019, there have been 7 operators who have lost their TSL and not obtained an injunction in the High Court. They may still be going through the appeal process, but this data is not yet available. There are at least 5 operators who have been granted relief by the High Court and are still going through the Court process. If you are issued with a proposal, it is imperative that you seek advice.

Questions? Need more information?

Fortune Manning advises the transport industry on all aspects of the law, including licensing issues, legislative changes, privacy and employment matters. If you would like to find out more about the issues discussed above, or any other legal issue, give the team at Fortune Manning a call on 0800 4FM LAW (0800 436 529).