Pektas v Victorian Taxi Directorate [2002] VCAT 379

3. The Applicant is the principal of a firm called "Map Limousines" and is also a partner in a paging service controlling 30 other hire cars called "Executive-Quantum Corporate Cars". He has held a taxi licence for 10 years from 1986 to 1996 and since that time, has held one metropolitan hire licence and has operated under the businesses name I have mentioned Map Limousines, as well as his other paging business which he now operate in partnership with Mr Demir, who gave evidence before this Tribunal.

4. A special purpose vehicle is defined in the Transport Act by Section 86 to mean:

"a commercial passenger vehicle classified as a special purpose vehicle by the licensing authority under Section 145 of the Act."

"The licensing authority may classify vehicles into different categories having regard to the type of vehicle and the commercial passenger service to be provided and in respect of which categories different types of licences may be granted and may at any time during the currency of a licence change the classification of a vehicle and the type of licence."

6. The Respondent being the licensing authority has so classified a vehicle in a document headed "Victoria Taxi Directorate Special Purposes Vehicle Licences Information for Applicant" and that inter alia, states as follows:

"A special purpose vehicle is similar to a hire car except it is licensed only for a specific purpose, for example wedding parties, and debutante balls. Hiring rates must be by agreement with the hirer prior to the commencement of the journey. All hirings must be pre-booked through the operational addresses approved by the Directorate."

7. A number of licences similar to licences that are sought in this application were granted by the Respondent without reference to the Tribunal in years 2000 and 2001. Mr Demir who I have already mentioned and gave evidence before this Tribunal, was the recipient of two of those licences. That is, they were granted for use of the Applicants to those applications with a condition that they should only be used to transport members, staff, guests etc of the particular corporation. In Mr Demir's case there were two corporations mentioned.

8. However prior to the decision being made in this case the Respondent realised that it has made a mistake in granting those licences. Evidence was given before this Tribunal by Ms Kambouris, Licensing Officer of the Respondent. She said after the Respondent realised that the type of licence that is requested here by the Applicant did not fit into their classification of special purpose vehicle they decided not to grant any further licences of that type. In fact Mr Hurley who appeared for the Respondent said the classification of "Special Purpose Vehicle Licence" should relate to the type of journey and not to the people who are occupying the vehicle, in other words for a wedding journey, for a debutante ball journey or a tourist journey. Here the condition sought is closely related and indeed almost similar to the type of work that normal metropolitan hire cars do in transporting corporate executives. I agree with Mr Hurley's submission.

9. This matter was considered by the Tribunal in the matter of Shaghaghi v Victorian Taxi Directorate which was a decision of Deputy President Davis given on the 12 April 2002 and was unreported. There the Deputy President was dealing almost with identical facts to what is before me today. She said as follows:

"22. It is clear that the Directorate's recent change of policy in relation to the grant of SV licences has disadvantaged the Applicant. It is also clear that this change of policy represents a return to the policy which governed the grant of SV licences prior to 2000, that is, to a policy that treats the classification of MH and SV licences as being premised on a distinction between MH licences and SV licences which is based on the special purpose of the journey in relation to SV licences. In this framework, the "special purpose" could not be comprised, without more, of transporting designated corporate clients.

23. The task of the Tribunal upon review is to make the correct or preferable decision. As this Tribunal does not have a supervisory role over all the functions of the Directorate, including its role in making classifications of commercial passenger vehicles pursuant to s.145, such a task is to be conducted within the framework of the policies of the Directorate. I consider that the correct and preferable decision to make, based on the classification and policy adopted by the Directorate prior to April 2000 and since October 2000, is to affirm the decision of the Directorate.............."

10. I agree with what the Deputy President has had to say and with the reasons she set out in that decision. The conditions sought to be imposed by the Applicant here do not in anyway relate to the type of journey, which is what I have found to be the meaning of "special purpose". They merely relate to the proposed passengers having some relationship to a particular corporation. That is not the purpose of a special purpose vehicle licence.

11. Therefore under those circumstances the Applicant cannot succeed in this application because what he has applied for here is something outside what is the classification of a special purpose vehicle licence. However in case I am wrong about that and because it has been argued before me, I should consider whether in any event the Applicant would have succeeded bearing in mind the provisions of Section 143 of the Act. Section 143 of the Act sets out matters that a Tribunal must consider before it grants or refuses commercial passenger vehicle licence. That section reads as follows:

"(1) Before granting or refusing to grant any application for a licence to which section 141A or 142 applies the licensing authority shall have regard primarily to the interests of the public generally including those of persons requiring as well as those of persons providing facilities for the transport of passengers, and without restricting the generality of the foregoing requirement shall take into consideration--

(a) the advantages of the service proposed to be provided, the saving of time which would be effected thereby, and the convenience (including the advantage arising from journeys not being broken) which would be afforded to the public by the provision of that service;

(b) the existing transportation service for the conveyance of passengers upon the routes or within the area proposed to be served in relation to-

(i) its present adequacy and probabilities of improvement to meet all reasonable public demands;

(ii) the effect upon that existing service of the service proposed to be provided; and

(g) the character, qualifications and financial stability of the applicant; and

(h) any other relevant matters which the licensing authority considers will affect the interests of the public."

12. Mr Fennessy who has appeared for the Applicant, stated that I should look at the word "public" as used in Section 143(1) and that the four companies to which the Applicant is seeking to service should be looked as the public. He has said that there would be advantage to them (the corporations) in the licences being granted. On the evidence provided I would agree that there would be an advantage to those four companies. However I need to look at "the public" as a whole as well as the four companies. I agree that those four companies do form part of the public but the public interest as a whole needs to be looked and the possibility for enforcement needs to be considered. I will return in a moment to the question of enforcement, but say that my view enforcement of this condition will be extremely difficult.

13. Sub-section (b) Section 143 is what is normally referred to as a needs basis. In other words unmet demand. In this particular case the Applicant has sought to prove the unmet demand for his proposed operation by his own evidence and by the tendering of letters from all four of the corporations. The relevant parts of those letters are as follows. From Merant Corporation signed by Maurice Wolman on the 1 March 2001 it is written:

"We have contracted Mehmet A Pektas to provide all our transport needs to employees, VIP visitors and customers.

Through his business, Map Limousine Service, Mr Pektas supplies us with vehicles and drivers to meet and greet our clients, employees and consultants at the airport and takes them to their hotels or appointments."

"We also feel that in order to carry out these duties to our requirements, at least two limousines would be necessary.

Merant believes that by using Map Limousine Services the company is reducing costs and Merant runs it's business in a more convenient way."

14. Stephen Kelly the Managing Director of NECA wrote as follows. The relevant parts of his letter states:

"We have contracted Mehmet A Pektas to provide us with all our transport needs in Melbourne. Through his company, MAP Limousine Service, he provides us with vehicles and drivers to meet and greet us at the airport; to take us to our hotel, or events or meetings, around Melbourne; and to return us to the airport. This service on occasions required two luxury sedans. Use of rental vehicles could not provide us with an equivalent standard of service or convenience and have proved cost-efficient in the past."

15. Mr Burley the Chief General Manager of Allianz Australia Insurance Limited the relevant parts he writes are as follows:

"We frequently contract Mehmet (Michael) A Pektas to provide transport needs for employees and clients, particularly for our Melbourne based subsidiaries, Hunter Premium Funding and Club Marine.

Through his business "MAP Limousine Service" Michael supplies vehicles and drivers to:

* Meet and greet staff and guests at the airport, take them to their hotels, our offices and other events or meetings. We have used Michael because of the service levels and importantly his knowledge of our locations and above all, reliability!

* Pick up and transport Melbourne guests and staff from their homes and to meetings and special events.

* From time to time we have had more work than Michael can meet and therefore wholeheartedly support his application for more vehicles. Many times more than one car is required for these events."

16. Mr David Minear the Chairman of Young and Rubicam Adelaide and the Vice Chairman of Young and Rubicam Australasia. The relevant part of what he had to write are as follows:

"Success in our business very much depends on high quality employees and servicing the needs and demands of our high profile client base. As part of maintaining the highest possible standards of service, we insist on qualified suppliers that understand and deliver the same level.

Our relationship with Mehmet A Pektas and his company, MAP Limousine Service, goes back five years. Mehmet is contracted to provide the transport needs for our employees and clients.

* Guests and clients - meet and greet them at the airport, take them to their hotel, Y & R's offices and other Y & R events or meetings around Melbourne. Then take them back to the airport.

* Melbourne based guests and clients - Pick up and transport from their homes to Y & R offices and related meetings and events.

* Y & R Employees - transport employees from their homes and from Y & R offices to meetings, the airport and back.

As our business continues to grow, so do the demands we place on MAP Limousine Service. For Mehmet to continue to meet our needs, we feel that two luxury sedans are required.

Obviously there are other forms of transport available to us (eg taxis). However, we believe that Mehmet understands our needs and reflects our quality standards."

17. Mr Pektas explained the demand further by saying that a lot of these companies presently use rental cars or their own staff vehicles and that if he was granted these licences they would use his service. He further stated that these would be new customers to the hire car industry, they would not be take business from other hire cars because they are currently using rental cars or their own vehicles.

18. However in my view there is no evidence to support this fact. It would have been easy for all of these matters to be elaborated in the statements of those gentlemen which I have read; it wasn't. The only mention of rental cars in statements at all is in the letter of Mr Kelly, where he says," use of rental cars could not provide us with equivalent standard." He does not say that they currently use rental cars and it is not said that they currently use their own staff vehicles.

19. Mr Carisson from the Victorian Hire Car Association gave evidence. He is not only the chairman of the Association but he also operates he own fleet of hire cars. He gave evidence that in his experience never has there been any demand which has been unmet in terms of hire cars, that is if someone wants a hire car and if he would not be able to attend to those clients needs, then some other paging service would.

20. The Applicant gave evidence that there is some 10 to 15 occasions a year where he may have difficulty placing clients and they are the busiest times. Mr Demir gave evidence that there was some 150 occasions.

21. However I am not convinced by the evidence of either Mr Pektas or Mr Demir. In my view in particular Mr Pektas should have been able to support his assertions of these matters by booking sheets from his paging organisation "Quantum". I note that there are two other paging organisations which take work as well as four large companies. No objective material was put before the Tribunal except by Mr Carisson, and that material did not show any unmet demand whatsoever. It would have been a simple matter for the Applicant to show there was unmet demand in relation to the public in general or the four corporations which he mentioned by the production of booking sheets. That was not shown, no one was called from the four corporations, while there is a statement in one of the letters that there is some unmet demand, that statement, is unsubstantiated and I am not willing to accept that on its face value, it seems contrary to Mr Carrison's evidence which I accept in this regard.

22. Under those circumstances I am of the view that at least so far as these four companies are concerned there is adequate transport facilities provided and to grant these licences would affect the existing services because it would take business away from the existing transport providers. There has been no real evidence that the four corporations would be paying a cheaper fare than otherwise save and except that there was some evidence that there was a saving of 10% because these companies had an account with Mr Pektas. That account did not have the 10% surcharge that is apparently now common but are very unfortunately charged within the taxi and hire car industry by customers using credit cards. I am quite sure that that 10% problem could be overcome by other means other than grant these special purpose vehicle licences. For example, there could be a charge back to the account with the Applicant when the vehicle was paged out to other people.

23. Sub-paragraph (g) of Section 143 refers to character, qualifications and financial stability of the Applicant. There has been no attack on the character or qualifications of the Applicant. However the financial stability of the Applicant is unclear. There was evidence that he borrowed some money for the purchase of his metropolitan higher licence in 1996 which is now been fully repaid. I see no reason not to accept that part of his evidence. However he did produce to this Tribunal a statement showing the expected profit and loss statement for the next two years should his application be successful. I mentioned in the course of addresses to Mr Fennessy, who appeared for the Applicant, that it is "one of the worst profit and loss statements I have seen". It does not show how the workings are made, what if any presumptions are made, it is completely unclear in fact it may be no more than a set of figures that are "pulled completely out of the air" as they were presented the statement is utterly meaningless. Mr Fennessy pointed to the footnote which said "please note that the projected sources of income represented above is from the following companies" and it mentions the four proposed clients. However it does not say what was said by those companies, how many journey's were going to be made, why the business should expand a part from the fact that Mr Pektas said himself that at the moment he is only transporting the highest executives of those companies and in future he would plan on transporting all the employees.

24. Thus I am certainly not convinced as to the financial stability of the Applicant. Also I note that he needs to borrow $200,000 to buy five vehicles. I do not know whether he will be able to support that or not.

25. Sub-paragraph (h) of Section 143 is the catch phrase of all other relevant matters. In this particular instance it seems to me that if these type of licences are granted it would be virtually impossible for them to be policed and there would be no way of enforcing the conditions that they are exclusively for the use of these companies.

26. Mr Demir gave evidence that inspectors frequently pull up vehicles to make sure they are able to go to the airport, they talk to their drivers and they are very discrete when it comes to passengers. I comment here so they should be very discrete when it comes to passengers. They don't normally talk to passengers and I can understand that and I think it is very proper that they should not be cross-examining passengers that happen to be riding in a vehicle. However they do talk to drivers and the driver is required to carry the licence and special condition in the glove box of the vehicle. While it would be open to an inspector to ask the driver in a particular case; are these passengers related to the corporation's, mentioned on the licence", it is unlikely in my view that the inspector would go any further than that. If the driver was minded to carry passengers that were not related to as corporations it would not surprise me that such a driver would mislead the inspector and say they were related, in which case it would be virtually and impossible to find out whether the passengers carried were related to the four corporations. In my view conditions should not be imposed in licences which cannot be enforced and I don't see any practical way of enforcing the conditions as to what is proposed by the Applicant. That in itself in my view would be sufficient to refuse the licence.

27. Under those circumstances I will affirm the decision because in my view the application does not fit in with what is being classified by the Respondent as a "special purpose vehicle licence". Secondly weighing up all the factors in Section 143 those factors militate very strongly against the grant of a licence in any event. Under those circumstances I will affirm the decision.

28. Following on from the decision I have already made Mr Hurley on behalf of the Respondent has applied for costs. He says that the position should have been known to the applicant and presumably while he did not specifically refer Shaghaghi's case, he said that should have been known.

"subject to this division each party is to bear their own costs in the proceeding.

What must be satisfied before such an order can be made.

30. The relevant parts of that as far as this is concerned are:

"(a) whether a party has conducted the proceedings in such a way that unnecessarily disadvantage the other party to the proceeding by the conduct of such as"

The only part of that section that could be relevant here is "(vi) vexatiously conducting the proceeding". It hasn't been suggested this proceeding is vexatiously conducted and I don't find it as.

31. Sub-paragraph (b) of sub-section 3 reads as follows:

"(c) might be relevant, the relative strength of the claim is made by each of the parties including whether a party has made a claim there is no tenable basis in fact or law."

32. Clearly I have found it the Applicant's case does not have a tenable basis in law or fact, however there were facts that needed to be looked at by the Tribunal and there has been a change of policy, as Mr Fennessy points out, since the time that the application was made there was the policy of the Applicant to grant such licenses.

33. In all those circumstances in my view this is not a proper matter for deviation from the basic rule there should be no order as to costs and I will dismiss the Respondents application for costs.