Lee v Aerial Taxi Cabs Co-operative Society Ltd

1 This application commenced pursuant to s 127A of the Workplace Relations Act 1996 (Cth) ("the Act") on the ground that a contract between the applicant and the respondent was unfair and harsh. By later amendment the applicant claimed breach of contract, and by still later amendment claimed that the contract was an invalid restraint of trade at common law.

FACTS 2 The respondent, Aerial Taxi Cabs Co-operative Society Limited, had entered into what was called a "Taxi Network Contract" on 1 July 1997 with the Minister for Urban Affairs on behalf of the Government of the Australian Capital Territory, for the right to provide a Taxi Booking Service within a specified area, namely, the Australian Capital Territory and surrounding region - in effect, it was said that this means the right to operate a taxi radio network. The agreement covers the period up to 2002. It is not entirely clear what express advantage the respondent obtains from this agreement, as it is said not to be exclusive and envisages a further contract being issued to another contractor at any time without any liability or obligation for compensation. Nonetheless, the reality is that the respondent has conducted the only taxi network in the Australian Capital Territory for many years and, in particular, the only taxi radio network. The agreement obliges the respondent to meet various operational requirements, including: 3. The taxi booking services must operate continuously and must cover bookings from all parts of the area covered by the Taxi Network Contract. 4. Every taxi operator must be affiliated with a taxi network. A taxi operator may be a member of one taxi network only at any point in time. A taxi network may not accept a taxi operator when it is a member of another taxi network. Affiliation means: (A) the taxi uses the name of the contracted taxi network, and (B) the taxi network provides the taxi operator with a booking service and bookings. … 8. The taxi network must take all reasonable steps to ensure (and have procedures in place to reasonably ensure) that every taxi operator is accredited, and complies with all the requirements of taxi operator accreditation including the meeting of all relevant safety standards or requirements. 9. The taxi network must take all reasonable steps to ensure that all taxi drivers are authorised, receive appropriate ongoing structured training to accommodate changes to basic entry training requirements, and are at all times properly attired in the network's approved uniform. … 17. The taxi network must maintain a register of complaints, including the date, name and contact of complainant, nature of the complaint and action taken in response. … 25. The taxi network shall have in place a set of regulations/rules/By-Laws which are directed at provision of an efficient and equitable service for the public and for those affiliated to the taxi network. A taxi network's regulations will support the Motor Traffic Act 1936 and its Regulations in every respect, including the application of no more than the maximum applicable fare, and a taxi network will provide the appropriate forum for the enforcement of these procedures." 3 As the name implies, the respondent is a co-operative society, and membership is limited to those who are licensed to use at least one of his or her motor vehicles as a taxi. Part 3 of its current Rules deals with complaints from members of the public, Part 4 with discipline of members, including a Supervisory Committee to which matters are referred and an Appeal Committee, and Part 8 deals with the constitution of the Supervisory Committee. 4 Rules 14, 15, 16, 55, 56 and 70 provide as follows: "DISCIPLINE 14 (1) If a Director, the Chief Executive or a member has reasonable grounds to suspect that a member has: (a) contravened or failed to comply with a provision of these Rules or the by-laws or allowed a driver of his or her taxi to contravene or fail to comply with these Rules or the by-laws; or (b) acted in a way, or allowed a driver of his or her taxi to act in a way, that is likely to bring the Society into disrepute or contempt, or to harm the proper operation of the business of the Society or the common interests of its members; or (c) breached, or allowed a driver of his or her taxi to breach, the code of conduct for drivers of taxi cabs established by the By-laws; or (d) failed to comply with a requirement made in accordance with by-laws made for the purposes of paragraph 70(1)(d); or (e) been convicted of a criminal offence of a serious nature; he or she may refer the matter to the Supervisory Committee in writing. (2) The Supervisory Committee shall hold a meeting to consider a matter referred to it under this Rule. (3) If a matter is referred to the Supervisory Committee, a member of that Committee shall, at least 7 days before the meeting is to take place, notify the member concerned in writing: (a) of the details of the matter; and (b) of the time and place of the meeting of the Supervisory Committee at which the matter is to be considered. (4) The member may: (a) appear before the Supervisory Committee at the meeting to make submissions, and call witnesses to give evidence on his or her behalf; or (b) make written submissions in relation to the matter. (5) If, after considering those submissions and all other evidence in relation to the matter that is available to the Supervisory Committee, the Committee is satisfied that the member has: (a) contravened or failed to comply with a provision of these Rules or the by-laws or allowed a driver of his or her taxi to contravene or fail to comply with these Rules or the by-laws; or (b) acted in a way, or allowed a driver of his or her taxi to act in a way, that is likely to bring the Society into disrepute or contempt, or to harm the proper operation of the business of the Society or the common interests of its members; or (c) breached, or allowed a driver of his or her taxi to breach, the code of conduct for drivers of taxi cabs established by the By-laws; or (d) failed to comply with a requirement made in accordance with By-laws made for the purposes of paragraph 70(1)(d); the Supervisory Committee may do one or more of the following: (e) recommend to the Board that the member be expelled; (f) fine the member an amount not exceeding $1,000; (g) suspend the provision of radio services to that member, to the relevant taxi cab or to all taxi cabs of the member for a period not exceeding 4 weeks; (h) reprimand the member; (i) require the member to attend all or part of the Aerial Taxi Cabs Co-Operative Society Limited Driver Training Course for refresher training. (6) If, after considering those submissions and all other evidence in relation to the matter that is available to the Supervisory Committee, the Committee is satisfied that: (a) the member has been convicted of a criminal offence; and (b) the offence is of such a serious nature as to warrant the member's expulsion; the Committee may recommend to the Board that the member be expelled. (7) The Supervisory Committee shall, as soon as practicable after it has made a decision, cause the member to be notified in writing of the decision and of the reasons for the decision. (8) Any fine imposed on a member shall be paid: (a) within 14 days of being notified of the decision of the Committee; or (b) if the member appeals against the decision in accordance with Rule 15 and the Appeal Committee confirms the decision of the Supervisory Committee, within 14 days of being notified of the decision on appeal. (9) If a fine is not paid within the period, the Supervisory Committee may suspend the provision of radio services to the member's taxi cab or cabs until the fine is paid. (10) Any other punishment imposed on a member is, if the member appeals against the decision in accordance with Rule 15, not to be effected unless the Appeal Committee confirms the decision of the Supervisory Committee. (11) If: (a) the Supervisory Committee is satisfied that a member has contravened the By-laws by making or attempting to make unauthorised modifications to a mobile dispatch terminal owned by the Society; and (b) the member has previously been punished under these Rules for a contravention of the same kind; Subrule (5) applies as if the reference in paragraph (5)(g) to a period not exceeding 4 weeks were a reference to a period not exceeding 3 months. (12) The Supervisory Committee must notify a member who has referred a matter to the Supervisory Committee under subrule (1) of the results of the referral. APPEALS 15.(1) A member aggrieved by a decision of the Supervisory Committee under Rule 14 may, within 7 days after being notified of the decision, notify a Director or the Chief Executive in writing that he or she wishes to appeal against that decision. (2) A notification of an appeal shall state the grounds on which the appeal is to be made. CONSTITUTION OF APPEAL COMMITTEE 16.(1) If a Director or the Chief Executive receives notification under Rule 15 that a member is to appeal against a decision of the Supervisory Committee, the Director or the Chief Executive shall notify the Chairman of the member's intention. (2) The Chairman shall, as soon as practicable, nominate: (a) a Director; and (b) 2 other persons, neither of whom is a member or an officer or employee and each of whom has had experience in: (i) business; or (ii) public administration; or (iii) arbitration of disputes; or (iv) legal matters; to constitute an Appeal Committee to hear the appeal. SUPERVISORY COMMITTEE 55.(1) There shall be a Supervisory Committee consisting of three members of the Society, none of who are Directors and when available one nominee appointed by the Motor Registrar. A person who has brought the society into disrepute on more than one (1) occasion, thereby rendering himself a person unfit to conduct business on behalf of the members, will be ineligible to be elected to or to retain a position on the Supervisory Committee. (2) Persons who, at the commencement of these Rules, held office as members of the Supervisory Committee under the rules that were in force immediately before the commencement of these Rules continue, subject to these Rules, to hold office for the remainder of their terms of office. (3) Each member of the Supervisory Committee shall be elected for a period commencing on the day of the holding of the Annual General Meeting at which he or she was elected and ending on the day of the holding of the second Annual General Meeting after that election. (4) If one member of the Supervisory Committee retires on the day on which an Annual General Meeting is held, one member shall be elected in his or her place, and if two members of the Supervisory Committee retire on that day, two members shall be elected in their place. (5) The Board may appoint a member (not being a Director) to fill a casual vacancy on the Supervisory Committee. (6) A member appointed to fill a casual vacancy on the Supervisory Committee will retire when the member he or she replaced would have been required to retire. (7) A retiring member of the Supervisory Committee is eligible for re-election. (8) A member of the Supervisory Committee may resign his or her office by notice in writing given to the Chairman. (9) The members of the Supervisory Committee shall be paid an honorarium. (10) All necessary expenses incurred by the members of the Supervisory Committee in the business of the Society shall be refunded to them on presentation of a statement of the expenses so incurred. ELECTION SYSTEM FOR ELECTION OF MEMBERS OF SUPERVISORY COMMITTEE 56.(1) The Board is to determine a system for the election of members of the Supervisory Committee, and is to notify members of that system in the notice of the Annual General Meeting at which members are to be elected. (2) If: (a) one position of member of the Supervisory Committee remains to be filled; and (b) after the counting of all votes, the votes in favour of two candidates are equal, one of them is to be elected on the toss of a coin. BY-LAWS 70.(1) The Board of Directors may make by-laws not inconsistent with these Rules, the Act or the Regulations to facilitate the proper, efficient and orderly functioning of the Society and, in particular, relating to: (a) the specification of vehicles to be used as taxi cabs; or (b) the qualifications required for drivers of taxi cabs; or (c) a code of conduct to be observed by drivers of taxi cabs (including members), which may include provisions relating to: (i) standards of dress; and (ii) penalties for breaches of that code of conduct, including suspension of access to the radio system; or (d) requiring a member who employs a driver who has been found, in accordance with the by-laws, to have breached the code of conduct for drivers of taxi cabs established by the by-laws: (i) to discontinue the employment of the driver; or (ii) to discontinue the employment of the driver for a period determined under the by-laws; or (e) the procedure to be used in relation to the operation of the radio equipment, the allocation of radio hirings and the use of taxi ranks. (2) The by-laws that were in force immediately before the commencement of these Rules continue in force as if they had been made under subrule (1)." 5 Pursuant to this last Rule, By-laws are in force ("the By-laws"). By-law 16 is as follows: "16. Drivers are required to sign an agreement to abide by the Rules and By-laws of Aerial Taxi Cabs Co-operative Society Limited (Aerial) prior to driving a taxi operating in Aerial's fleet. Operators who allow drivers to drive their taxis without first having signed the agreement will be responsible for the driver's actions and may have their taxi(s) suspended from the radio network as a result of the driver breaching a Rule or By-law." 6 The By-laws provide a set of working rules governing the operation of the network and the radio control of it, including a complaints and discipline system with provisions for a supervisory committee and an appeals committee. The By-laws apply to all drivers, whether they are also operators or not. The principal relevant provisions are as follows: "DISCIPLINE SUPERVISORY COMMITTEE 18. There shall be a Supervisory Committee in accordance with the Rules of the Society which state in part:- "There shall be a Supervisory Committee consisting of three members of the Society, none of whom are Directors and when available one nominee appointed by the Motor Registrar" 19.a. Any driver who allegedly contravenes or fails to comply with any provision of the Rules or the By-laws may be informed by the dispatcher. The driver may be offered the option of taking two penalty points immediately or have the matter referred to the Supervisory Committee as hereinafter provided. b. Any driver summoned to appear before the Supervisory Committee will be notified in writing at least seven (7) days prior to the proposed hearing and be given details of any alleged breach of the Rules or By-laws to be discussed at the hearing. The driver may choose to either appear in person at the hearing to answer any charges, may call witnesses to give evidence on his behalf, or make written submissions to the Committee. Failure to appear before the Supervisory Committee or make written submission without reasonable excuse will incur suspension from the Radio Network and cancellation of PIN number. In the event of a subsequent non-appearance, the Supervisory Committee will have the discretion to suspend the driver until he appears or to make a decision on the alleged incident based on the information available. c. If the Supervisory Committee is satisfied that a driver has contravened or failed to comply with a provision of the Rules or the By-laws the Supervisory Committee may-: (1) Reprimand the driver and/or (2) Require the driver to attend all or part of the Aerial Taxi Cabs Co-operative Society Limited approved driver training course for refresher training and/or (3) Fine the driver an amount not exceeding $1,000.00 and/or (4) Suspend the provision of the radio services to that driver and/or that operator's taxi cab or cabs for a period not exceeding four (4) weeks, and/or (5) Recommend to the Board that the driver be suspended from access to the radio network and/or (6) Impose a suspended sentence and/or (7) Recommend to the Board that the matter be referred to the Motor Registrar, and/or (8) Award the driver demerit points where the Committee considers a monetary fine to be inappropriate. The driver concerned is to be notified in writing of that decision and the reasons. APPEALS 20. The Appeals Committee will consist of: (1) A Director, and (2) Two (2) other persons, neither of whom is a member or an officer or employee of the Society and each of whom has had experience in: (a) Business; or (b) Public administration; or (c) Arbitration of disputes; or (d) Legal matters." 7 "Driver" means the driver of an Aerial Taxi Cab and includes a member. The "Supervisory Committee" is that referred to in the respondent's Rules. The "Appeal Committee" is the Committee constituted in accordance with Rule 16. Each of these bodies also has functions in relation to complaints about members. The "Chief Executive" is the Chief Executive from time to time of the respondent, and "Board" and "Director" are the Board of Directors of the respondent and a member of the Board respectively. 8 The By-laws envisage, and the evidence establishes, that a driver requires a PIN number in order to access the network. The evidence is that the applicant received a PIN number on or about 15 April 1994, having signed and submitted what was described as a driver's agreement ("the Driver's Agreement") bearing that date, together with a driver information sheet. The substantive part of the Driver's Agreement is as follows: "In consideration of being given bailment of a taxi(s) bearing Aerial taxi cab markings and belonging to a member of the Aerial Taxi Cabs Co-Operative Society Limited ("The Society") and of being permitted to use such of the Society's facilities, including its radio system, as is agreed, I hereby agree to comply with the By-laws, a copy of which I have this day received, or as amended by the Society in accordance with its Rules from time to time. I hereby consent, as part of my bailment, to any breach of those By-laws by me being dealt with under the disciplinary procedures of the Society as set out in Part 4 of the Rules of the Society which, for the purposes of this agreement, shall be interpreted as though I were a member of the Society. I further agree to abide by any decision made in accordance with these procedures and that any monetary penalty imposed may be recovered from me as a debt due to the Society in a court of competent jurisdiction." 9 At that time, the applicant was driving cab number 163. Mr Gary Whitby also signed the Driver's Agreement. 10 On 23 May 1994 the applicant entered into what was described as a taxi bailment agreement with Whitby Developments Pty Ltd in relation to taxi 163, which governed the terms and conditions upon which the driver (described as the bailee) would have possession and use of the taxi ("the Whitby Bailment Agreement"). The applicant says that he has driven taxis for approximately 20 operators since May 1994, and that the Whitby Bailment Agreement was the only bailment agreement he has entered into. The Whitby Bailment Agreement entered into by the applicant is similar to, but not identical with, the current standard bailment agreement recommended by the respondent for use by its members. 11 The applicant has driven cabs for Mr Les Wassell on nightshift on a full-time basis since 2 March 1999 pursuant to an informal oral arrangement. The arrangement is that Mr Wassell pays for the fuel, maintenance and other costs, including insurance, of operating the vehicle. After each shift the applicant gives Mr Wassell half of the takings for the shift, less any expenses paid during the course of the shift. Although Mr Wassell is able to maintain contact with the applicant during the whole of the shift, he does not interfere with or tell the applicant how to do his job provided that he complies with Mr Wassell's requirements, including a requirement that he abide by the By-laws of the respondent. Mr Wassell does not pay him any superannuation, sick leave, annual holidays or long service leave. The applicant purchased his own uniform as approved by the respondent. 12 Mr Wassell is the owner or operator of 19 taxi cabs in the Australian Capital Territory, and is a member of the respondent. He has current arrangements with some 70 drivers. He has never used the respondent's standard bailment agreement. 13 The applicant has fallen foul of the complaints and discipline system provided for by the By-laws of the respondent, and this has led to him incurring fines and also two periods of suspension, the second of which was the immediate spark for these proceedings. The applicant has some detailed objections to the manner in which he has been dealt with on various occasions, but expresses fundamental objection to the system as such.