Ipsofactoj.com: International Cases [2001] Part 2 Case 1 [NZCA]


COURT OF APPEAL, NEW ZEALAND

Coram

Fullers Bay of Islands Ltd

- vs -

The Commerce Commission

BLANCHARD J

TIPPING J

McGRATH J

14 DECEMBER 2000


Judgment

Blanchard J

(delivering judgment of the court)

  1. This appeal from a ruling on a preliminary question under r 418 of the High Court Rules concerns the ambit of a licence held by the appellant, Fullers Bay of Islands Ltd (formally Fullers Cruises Northland Ltd) pursuant to which it operates a ferry service between Opua and Okiato Point, some 10 minutes from Russell, in the Bay of Islands. The issue is whether in terms of the registration of the ferry service with the Northland Regional Council under s 49 of the Transport Services Licensing Act 1989 (the Act) Fullers is restricted to operating with one vehicle ferry only, completing circuits between the two slip-way terminals every 20 minutes. Fullers argues that it is licensed to run two vessels with one departing from each terminal at 10 minute intervals. The issue has arisen because a putative rival operator, Opua Ferries Ltd, has applied to register a service for a second ferry. It is common ground that there is no room either in terms of berthing facilities or safety for any more than two vessels.

  2. There are two sets of proceedings. In the first, Opua Ferries seeks a declaration to the effect that the operation of a second ferry by Fullers is unlawful. In the second proceeding, the Commerce Commission alleges that Fullers entered into a lease with the terminal operator, Far North Maritime Ltd, with a view to excluding any other operator from using the slip-ways and thus with the purpose of substantially lessening competition in the relevant market contrary to s 27(1) of the Commerce Act 1986. Section 36 of that Act is also relied upon.

  3. Because it was considered that the extent of Fullers’ licence was important to both proceedings, it was agreed that the r 418 question should be determined in relation to both.

  4. The Act was part of a package of legislation affecting passenger service transport (see also Part XXXIVB of the Local Government Act 1974 and the Transit New Zealand Act 1989 (since amended)). Prior to 1989 local authorities largely ran the public passenger transport services in New Zealand. It was the intention of the reforms to confine their operational role and substantially deregulate the previous licensing regime. As far as practicable passenger transport services were to operate on a competitive basis. In this context Regional Councils were not permitted to be involved in any passenger transport service operation. Within the confines of a national land transport strategy their role was to develop a regional strategy and to facilitate operations of others. The services themselves were to be provided by persons operating in a competitive market. In order to enable coordination of services and the determination of whether there were gaps in the market which should be filled, provision was made for registration of passenger services. This was provided for in Part II of the Act. Passenger services along with other classes of transport service were required to be licensed under Part I of the Act. Licences were issued by the Secretary for Transport. Section 48 provided for every holder of a passenger service licence who proposed to operate a passenger service on or after 1 July 1991 to

    notify details of the service, including routes or areas of operation, timetables or operating hours, fares, and such other matters as may be required by the Secretary or the regional council, to every regional council in whose region the service is to operate.

  5. Unless it declined registration (because it would have a material adverse effect on the financial viability of any contracted service, or would increase the net cost to the regional council of any contracted service or would be contrary to sound traffic management or any other important environmental factor), the regional council was required by s 49 to register a passenger service notified under s 48 within 21 days of receiving the notification.

  6. Section 50 provides that the operator of a registered service who wishes to abandon or vary the service must give not less than 21 days’ prior notice in writing to the regional council.

  7. Under s 51 it is an offence for the holder of a passenger service licence to operate within any region a service that is not registered within that region or, without reasonable excuse, to abandon or vary that service without giving notice under s 50 to the regional council.

  8. Section 52 requires the regional council to maintain and make available to the public a current register of all services registered by it under Part II. The regional council registering details of any service is required by s 53 to satisfy itself that the information is reasonably readily available to the public free of charge or at a reasonable price.

  9. Fullers was operating several passenger transport services in the region including the Opua-Okiato Point ferry. Appreciating the need to register all its services, Fullers wrote to the Council on 31 January 1991. Amongst the documents which accompanied the letter was a form of "Notice of Intention to Operate a Passenger Service" which evidently had been specified by the Council for the making of applications under s 48. In the details of scheduled services Fullers included a route description for a vehicular / passenger ferry service to operate between the terminal points of Opua and Okiato. The form required the attachment of, inter alia, a timetable and fare schedule and detail of seated and standing capacity of the "vehicle or vehicles" to be used in the service. Accordingly, Fullers attached a copy of its published timetable reading as follows

    Vehicle Ferry Services

    OPUA-OKIATO-OPUA

    (Okiato is approx. 10 minutes drive from Russell and Opua is approx.
    15 minutes from Paihia)

    THE FERRY OPERATES AS A SHUTTLE SERVICE WITH
    CROSSINGS EVERY 10 MINUTES (APPROX.) BETWEEN THE HOURS LISTED BELOW.

    OKIATO/OPUA

    FIRST FERRY

    — 6.40am

    LAST FERRY

    — 8.50pm (Sat— Thurs)

    — 9.50pm (Friday)

    OPUA/OKIATO

    FIRST FERRY

    — 6.50am

    LAST FERRY

    — 9.00pm (Sat—Thurs)

    — 10.00pm (Friday)

    The ferry is suitable for all vehicles including trucks, buses and
    camper vans.

    Tickets are purchased on board.

  10. Also attached to the form were copies of the Certificates of Survey issued under the Shipping and Seamen Act 1952 for the vessels Okiato and Opua. That for the Okiato certified that the ship was fit to ply as a Restricted Limit Vessel "with the number of passengers stated below". There followed a reference to the presence on the ship of lifesaving appliances provided for a total number of 136 persons. The certificate for the Opua similarly stated that it was fit to ply as a class 9/car ferry with 98 passengers.

  11. In February 1991 the Council gave public notice headed "Passenger Transport Registrations: Northland". This advised that the Council had been notified of certain passenger transport services under s48 which would operate from 1 July 1991 in the Northland region. There followed a list of the services. In respect of Fullers there was this statement:

    Company / Organisation

    Regional / District Based

    Current Service

    Service as from 1 July 1991

    Fullers Cruises
    Northland Ltd (Ferry)

    Far North

    Russell-Paihia passenger ferry Okiato-Opua car ferry

    Service unaltered

  12. On 17 July 1991 the Council wrote to Fullers enclosing "copies of registrations of all your organisation’s services that are registered with the Council", commenting that if Fullers was now operating additional services it would be advisable to register them. Enclosed with that letter were copies of Fullers’ own letter of 31 January and the attachments to that letter which have been described.

  13. The only other communication which needs to be mentioned is a letter which the Council wrote to Fullers on 3 December 1993 which stated that it was currently in the process of updating the Council’s passenger transport records. It noted the provisions of the Act and then said that according to its records Fullers operated two services which were available to the public generally. The writer of the letter attached a copy of the "current registered details" of the services. One of them was the passenger ferry from Russell to Paihia and we are not concerned with that. The other was the car ferry, in respect of which the attachment read:

    TYPE OF SERVICE:

    Shuttle Ferry Service

    ROUTE DESCRIPTION:

    Opua — Okiato, return

    STOPPING PLACES:

    TIMETABLE:

     

    Daily shuttle service with crossings approximately every 10 minutes between the following hours.

    Okiato/Opua

    First Ferry

    Last Ferry

    — 6.40pm

    — 8.50pm (Sat— Thurs)

    — 9.50pm (Friday)

    Opua/Okiato

    First Ferry

    Last Ferry

    — 6.50am

    — 9.00pm (Sat-Thurs)

    — 10.00pm (Friday)

    FARE SCHEDULE:

    ? please provide

    COMMENCEMENT DATE:

    Operated prior to 1989.

    (It will be noted that the time of departure of the first ferry from Okiato had been mis-transcribed.) In response to this letter Fullers supplied an altered service schedule for its passenger ferry and a fare schedule for the vehicle ferry.

  14. It is common ground that the Council did not construct a register of an orthodox kind and that what it did, instead, was simply to place Fullers’ letter of 31 January and the accompanying documents in a file or folder. Nevertheless, they were presumably available for anyone who cared to ask to inspect them.

    THE HIGH COURT JUDGMENT

  15. In his judgment delivered on 11 September 2000 in the High Court at Auckland, Robertson J said that the Council "did not have a register book as contemplated by the legislation". But he then said that eventually "some sort of register was compiled and as relevant to this proceeding contained under the Fullers’ entry the following". The Judge then set out the details quoted above in para [13] from the attachment to the Council’s letter to Fullers in 1993. We pause here to say that counsel were unable to point to any evidence that there was any entry in a register held by the Council in that form. It would appear that the writer of the letter had herself compiled the details from the material which had been submitted by Fullers on 31 January 1991 and which was held in a file or folder.

  16. The judgment of the High Court contains forceful criticism of the Council for its failure to ensure that the register was understandable and clear and for thereby creating the potential for the present situation. The Judge noted that there were three possible meanings of the registered service within the stipulated hours:

    1. One vessel operating as a shuttle (20 minute round trip);

    2. Two vessels operating from opposite points as shuttles with a vessel leaving each port every 10 minutes;

    3. One vessel operating as a shuttle (20 minute round trip) supplemented by a second ferry "as required" or "upon demand".

  17. The Judge noted that eventually counsel for Fullers had contended that the registration was to be interpreted as meaning "a shuttle service on demand during the specific hours with crossings up to approximately every 10 minutes".

  18. Pausing here, although we have carefully refrained from describing anything outside the documentation held by the Council, for reasons which will become apparent, it may be helpful to an understanding of the genesis of the present dispute to know that from before 1991 and until December 1997, after Opua Ferries registered its service with the Council and commenced its proceeding against Fullers and the Council, Fullers had been in the habit of putting the second vessel into service only during peak holiday periods and even then not throughout all the hours during which the first ferry operated. That extra service was in practice therefore, to an extent, a shuttle service on demand.

  19. Returning to Robertson J’s judgment, the Judge said that when dealing with a public register the Court must be vigilant to ensure that an interpretation was not influenced by factors which would not be available to a person making a search of the register. But he appears to have been of the view that such a restriction should not be applied in any absolute way. However, "standing back and objectively reading the material which was contained in the register" the Judge was

    left with no doubt that what was communicated was a service which involved a crossing commencing at Okiato Point at 6.40am and continuing throughout the day leaving from alternative sides at 10 minute intervals until the service concluded back at Okiato Point where it had commenced, ready to start again the next morning.

  20. The reading of the documentation in support of the registration confirmed the Judge’s view that whatever should or might have been included about issues of "on demand" and "supplemental services", that had certainly not occurred. He was not attracted to the argument that "shuttle" connoted something about "upon demand". It was a word that had its origins in "the instrument used in weaving which went back and forward". The Judge could find nothing which suggested that indicated or implied something occurring without a predetermined frequency. Nor did the word "approx" indicate that 10 minutes was some starting factor to be "either doubled or halved or generally ignored as the operator saw fit."

  21. The Judge concluded that reading the document (timetable) within its own four corners, it meant three return sailings per hour. He was accordingly satisfied that

    the registration effected in February 1991 in respect of the vehicular ferry service…was for a service three times an hour commencing from Okiato at 6.40am and concluding at Okiato at 9pm [sic] except on Fridays when it continued until 10pm [sic]. Any ferry service operated other than in those terms by Fullers had not been registered under the Act and was unlawful and in contravention of the Act.

    SUBMISSIONS FOR FULLERS

  22. Counsel for Fullers, Mr Asher QC, submitted that the register consisted of the documents supplied to the Council by his client (paras [9] and [10] above), including the timetable. He said that the timetable had to be read against the background circumstance that the Council knew that Fullers intended to continue with its current method of operating the service (outlined in para [18] above). It was not intending through registration to restrict its existing service, nor would the Council have considered that it had any such intention. Mr Asher said that the Council’s public notice in February 1991 of what services had been registered with it should be treated as part of the register or at least as establishing what had been registered. It showed the Council’s understanding that what was registered was the unaltered existing service. The notification held on the Council’s file had to be understood in its context. It was therefore appropriate to look beyond the documents.

  23. Mr Asher drew attention to the statement in the timetable that there would be crossings (plural) every 10 minutes. That suggested the use of two ferries. He noted what he said was a significant error by the Judge in recording that the service concluded at Okiato at 9.00 pm (10.00 pm on Fridays). In fact, as the timetable shows, the last ferry leaves Opua at that time so as to arrive at Okiato 10 minutes later. The significance of this was that, on its face, the timetable could not be achieved by running one vessel only.

  24. Mr Asher accepted that since 1991 Fullers had not operated year round with two ferries saying that nevertheless the registration must be read as relating to two ferries because that was the only reasonable meaning of the timetable. He contended for an "on demand" service but, seemingly accepting the difficulty of construing the documentation in this way, said that the Court should read it as authorising two vessels each doing 20 minute circuits. If Fullers had been in breach of s 51(b), by varying this service at off-peak periods, it would have to live with the consequences but that should not affect the interpretation of the terms of the registration and thus of the licence.

    SUBMISSIONS FOR OPUA FERRIES

  25. Mr Tizard, in his well-presented submissions, pointed out the irony that Fullers was now saying that its registration authorised it to do something it actually did not wish to do, except at peak periods. He suggested that Fullers never intended to register a service operating each 10 minutes from both terminals. He said that the register is intended to guide members of the public, other transport operators and the Council who may know nothing other than what they see on the face of the register. The Council and other operators needed to be able to consult the register to see what services were being run and what gaps were open to be filled by a new service, in accordance with the policy of the legislation.

  26. Counsel submitted that the Council’s public notice in February 1991 was part of its proposed passenger transport plan and was not part of the register.

  27. He said that the interpretation of the register, that is, primarily the timetable, should be made from the perspective of an ordinary reader, who would conclude that the service being described was a one vessel operation. The best evidence of how the timetable should be read was said to be found in the Council’s letter of 3 December 1993 (para [13] above). The register is unambiguous, Mr Tizard said, and the Court should not look beyond it. The reason why Fullers had nominated two vessels in its application for registration was to allow for flexibility and capacity at peak hours, one vessel being much larger than the other, and to cater for times when one was unable to operate. A reader who noticed the discrepancy in starting and finishing times would conclude that allowance was being made for some slippage or delay, the 10 minute times being said to be approximate. Mr Tizard said that on its face the registration was for three circuits per hour. It certainly could not be read as allowing an "on demand" operation.

    POSITION OF COMMERCE COMMISSION AND THE COUNCIL

  28. The Commerce Commission chose, inappropriately we think, to become involved in the interpretation question which was best left to be resolved between Fullers and Opua Ferries. Its counsel supported the submissions of counsel for Opua Ferries.

  29. Mr Bell’s mission on behalf of the Council was very largely concerned with endeavouring to rebut the Judge’s swingeing criticisms of its deficient performance in relation to the keeping of the register. He too took the position that the register was the material submitted by Fullers. He argued that the public notice was not a part of the register.

    THE RESPONSIBILITIES OF COUNCILS

  30. We were informed by counsel that no common approach has been taken by regional authorities to their responsibility for registration of road, rail and other passenger services under Part II of the Act. At least one major regional authority was said to have taken a minimalist approach, akin to that of the first respondent council in this appeal. In fairness we acknowledge that regional councils have received little guidance from the legislation for what was a new function under a restructured licensing system. However, we agree with the Judge to the extent that he expressed the view that under the Act a regional council had and has an implicit duty to compile and maintain a register of the essential features of transport services notified to it under s48. Unless it is at some time prescribed by statute or regulation the form of the register will be for the council to decide but it should be such as to constitute an accessible and clear record and not simply a compilation of what was provided by the holders of passenger services licences.

    CONCLUSIONS

  31. A public document, such as a register, is not to be construed in the same way as a private contract, namely by considering it against the background facts known to the contracting parties. A public document, in contrast, has to be understood in its own terms by those who come to consult it. In the case of a register of this kind they will not necessarily have any background information, although they must be assumed to exhibit normal intelligence and to read the register with care. It is only if, upon that approach, the document is found to be ambiguous, in the sense that no meaning emerges which, notwithstanding any preliminary uncertainties, an ordinary reader would take to be its proper meaning, that it will be permissible to have resort to matters which do not appear on the face of the document itself. Only if no such meaning emerges will it then be possible to look further afield, first consulting any additional material, like an application, which led to the creation of the public document (Slough Estates Ltd v Slough Borough Council (No 2) [1971] AC 958, 967-8). (Here, of course, the appellants’ application forms part of the register.)

  32. In this case, the register consists of the documents which accompanied Fullers’ letter of 31 January 1991 and which are held on the Council’s file. The Council, we think correctly, regards this as the entirety of the register. We agree that the public notice is not part of the register. Looking, then, only at the register, we are of the view, respectfully differing from the Judge, that an ordinary reader, after some initial head scratching, would conclude that Fullers had registered, and accordingly obtained a license for, a ferry operation involving departures from each side every 10 minutes, utilising two vessels.

  33. It is certainly true that on a first casual glance at the timetable the ordinary reader might not pick up the fact that a vessel leaving Okiato Point at 6.40 am on a 20 minute circuit, and thus due to leave that terminal again on the hour and at 20 minutes and 40 minutes past the hour, could not, if adhering to 10 minute crossings, be due to leave Okiato Point for the last run to Opua (beginning the last of the circuits) at 8.50 pm (9.50 pm on Fridays). (Counsel confirmed to us that this discrepancy had not been drawn to the attention of Robertson J).

  34. But the point would, we think, be obvious to anyone paying close attention to the document, especially to someone who might be studying the scheduling with the purpose of looking for a gap in the market. (Mr Sharp of Opua Ferries had worked for Fullers so he actually knew their modus operandi, but obviously one ignores his special position in seeking to ascertain what an ordinary observer might see on the face of the register).

  35. Looking for an explanation for this discrepancy in departure times, the reader might wonder whether it might lie in the fact that "crossings" are "every 10 minutes (approx.)". Whilst the use of the plural in "crossings" is to a degree ambiguous, a user of a ferry timetable would, we think, anticipate from the reference to crossings every 10 minutes that a vessel would leave each terminal at that frequency. We consider also that the reader would be well aware of the need for motorists to have some certainty about when they would have to arrive to catch a ferry and so avoid delay in their journey. The reader would therefore treat "approx." as likely to be merely an indication that weather conditions or mechanical problems could give rise to delayed arrivals and departures on some occasions. The reader would conclude that the word was simply an indicator that strict adherence to the timetable cannot be absolutely guaranteed, not that it would be expected that a single ferry would probably fall behind schedule.

  36. Considering that the operator intended not to inconvenience travellers by varying departure times, the reader would look at the other parts of the register and would speedily observe that two ferries had been nominated. Although this could possibly have been done in order to allow for flexibility in the capacity of a one vehicle service — the use of a larger vessel at peak periods — the reader would, we conclude, think it more likely that there was an intention to use the two ferries together. Two ferries could adhere to the timetable; one ferry could not. And the explanation which would occur to the reader for the first ferry leaving Okiato at 6.40 am and Opua at 6.50 am, which taken in isolation again might suggest one ferry operating alone, would be that the second ferry was intended to follow the first ferry from the Okiato side after a 10 minute interval, rather than beginning its day from the opposite side. It would follow all day, finishing at Okiato ten minutes after its sister.

  37. The use of the word "shuttle" — something which goes from side to side — is neutral. A shuttle service in ordinary parlance can involve multiple vehicles. It is consistent with this explanation of the timetable.

  38. We therefore construe the timetable as intended to signify a shuttle consisting of two ferries leaving from opposite terminals each 10 minutes, subject to occasional operational vagaries.

    RESULT

  39. The appeal is accordingly allowed. The answer to the preliminary question is that Fullers is licensed to carry on a passenger transport service in the manner set forth in para [38] above. The appellant is awarded costs of $5,000 against Opua Ferries and $2,000 against the Commerce Commission. Opua Ferries is also to pay Fullers’ reasonable disbursements on the appeal, including its counsels’ travel and accommodation costs, to be fixed by the Registrar if necessary.[a]


Cases

Slough Estates Ltd v Slough Borough Council (No 2) [1971] AC 958

Legislations

Transport Services Licensing Act 1989, s.48, s.49, s.50, s.51, s.52, s.53

Commerce Act 1986, s.27, s. 36

Local Government Act 1974, Part XXXIVB

Transit New Zealand Act 1989

Representations

R J Asher QC and W W Peters for Appellant (instructed by Thomson Wilson, Whangarei)
R M Bell for Northland Regional Council (instructed by Webb Ross Johnson, Whangarei)
J W Tizard for Opua Ferries Ltd (instructed by Oakley Moran, Wellington)
P D Woolley for the Commerce Commission
No appearance for Far North Maritime Ltd

Notes:-

[a] Both Opua Ferries and the Commerce Commission appealed against this decision. The Privy Council (Lord Hope of Craighead, Lord Slynn of Hadley, Lord Hobhouse of Woodborough, Lord Millett and Lord Scott of Foscote) on 5 March 2003 dismissed the appeal: see The Commerce Commission v Fullers Bay of Islands Ltd @ www.ipsofactoJ.com/international/index.htm [2003] Part 5 Case 13 [PC]


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