Ipsofactoj.com: International Cases [2003] Part 5 Case 13 [PC]


THE PRIVY COUNCIL

(from the Court of Appeal, New Zealand)

Coram

The Commerce Commission

- vs -

Fullers Bay of Islands Ltd

LORD HOPE OF CRAIGHEAD

LORD SLYNN OF HADLEY

LORD HOBHOUSE OF WOODBOROUGH

LORD MILLETT

LORD SCOTT OF FOSCOTE

5 MARCH 2003


Judgment

Lord Hope of Craighead

(delivered the judgment of the Board)

  1. This is an appeal from a judgment of the Court of Appeal of New Zealand (Blanchard, Tipping and McGrath JJ)[a] allowing an appeal from a ruling by the High Court of New Zealand (Robertson J) on a preliminary question under rule 418 of the High Court Rules about the nature and extent of the licence held by the respondent, Fullers Bay of Islands Ltd (formerly Fullers Cruises Northland Ltd) (“Fullers”), in terms of its registration under the Transport Services Licensing Act 1989 with Northland Regional Council (“NRC”) of a ferry service between Opua and Okiato Point near Russell in the Bay of Islands.

  2. There are two sets of proceedings. Common to them both is the question whether the effect of the registration is to permit Fullers to operate the ferry service with two vessels or with one vessel only. In the first application the first appellant, Opua Ferries Ltd (“Opua Ferries”), seeks a declaration that the operation of a second ferry by Fullers on this crossing is unlawful and in contravention of the Act. In the second application the second appellant, the Commerce Commission (“the Commission”), alleges that Fullers entered into a lease with the operator of the ferry ramps for the purpose of substantially lessening competition in the relevant market contrary to section 27(1) of the Commerce Act 1986. These issues have arisen because Opua Ferries wishes to operate a second ferry service, complementary to that operated by Fullers, between the same two points. The service which it wishes to operate was registered with NRC on 22 June 1997. But it has not been able to operate this service as it cannot get access to the ferry ramps from which Fullers’ service operates. The berthing facilities are such that it is not possible for the route to be served by more than two vessels.

    THE FACTS

  3. As Robertson J observed in his summary of the background circumstances, there has been a vehicular ferry service on this route for many decades. The business was acquired by Fullers in the late 1980s. It has been operating the service continuously since that date. In 1989 a new regime was introduced for the licensing and conduct of road, rail and other passenger services in New Zealand. This was achieved by the Transport Services Licensing Act 1989, Part XXXIVB of the Local Government Act 1974 and the Transit New Zealand Act 1989. Prior to that date public passenger transport services, including ferries, were for the most part run by local authorities. The effect of the reforms was to exclude regional councils from direct involvement in the provision of any of these services and to restrict the role of territorial authorities. The role of the regional councils under the new system was to develop a regional strategy and facilitate the operation of passenger transport services on a competitive basis as far as practicable. Provision was made in Part I of the Transport Services Licensing Act 1989 (“the Act”) for passenger services, along with other classes of transport service, to be licensed by the Secretary for Transport. Part II of the Act provided for the registration of passenger services with every regional council in whose region the service was to operate.

  4. Section 48(1) of the Act, as amended, provides:

    Except as provided in subsection (4) of this section, every [person] who proposes to operate a passenger service on or after the 1st day of July 1991 shall, not later that 21 days before the service is to be commenced, and earlier if possible, 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 [Director] or the regional council to every regional council in whose region the service is to operate.

    Section 49(1) of the Act provides:

    Subject to section 54 of this Act, a regional council shall, unless it declines registration under section (2) of this section, register a passenger service notified to it under section 48 of this Act within 21 days of receiving the notification.

    Section 49(2) provides that a regional council may decline to register a passenger service under that section on various grounds, including where the service proposed is contrary to sound traffic management or any other environmental factor identified by the regional council as being of importance to its region. Section 50(1) 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 with which the service is registered. The regional council may decline to register a variation on the same grounds as those set out in section 49(2). Section 51 of the Act provides that every person who, on or after 1 July 1991, operates within any region a service that is not registered within that region or without reasonable excuse abandons or varies that service without giving notice as required by section 50 commits an offence.

  5. Details of the services which have been registered under Part II of the Act are available to the public. This is an important aspect of the system, as it is designed to encourage competition and to reveal gaps in the market that should be filled. Section 52(1) of the Act provides that every regional council shall maintain and make available to the public a current register of all services registered by it under Part II of the Act. Section 53 provides:

    Every regional council that registers details of any service under this Part of this Act shall satisfy itself that the information is reasonably readily available to the public free of charge or at a reasonable price, and if it is not so satisfied shall ensure that the information is so available.

  6. Section 54 of the Act enabled operators who registered their services before 1 February 1991 to obtain protection against any new competing service between that date and 31 October 1991. It provided that no regional council was to register a service or a variation of a registered service between these dates where registration of the service or the variation of the registered service was likely to have a materially adverse effect on the financial viability of another service that was already registered. It was therefore in the interests of existing operators to seek registration of their services before 1 February 1991.

  7. On 18 December 1990 Fullers received a circular letter from the regional transport planner of NRC summarising the provisions of the Act and indicating the courses of action which were available. In response Fullers wrote to NRC on 31 January 1991 in the following terms:

    Re: Registration of Commercial Services

    We enclose herewith the following documents covering our registration of commercial services.

    1.

    Notice of Intention to operate a Passenger Service.

    2.

    Details of Scheduled Services 

    -         Passenger Ferry Service

    -         Vehicular/Passenger Ferry Service

    -         Ferry Service

    3.

    Details of Non-Scheduled Services

    -         Cape Reinga Tour

    -         Tutu Sightseeing Tour

    4.

    Fare Schedules

    5.

    Timetables

    6.

    Capacity of ferries

    7.

    Cheque for $50 to cover notification fee.

  8. Attached to that letter were the various documents indicated in that list. These included printed forms giving details of a passenger service by means of bus and ferry between Paihia and Russell which was already being operated by Fullers and of the vehicular and passenger ferry service between Opua and Okiato Point. Ticks were entered on the printed forms to indicate that schedules had been attached describing in each case the timetable, fare schedule and the seated and standing capacity of the vehicle or vehicles to be used in the service. This reference to the capacity of vehicles is not the wording that one would choose to use in the case of a ferry crossing. But it appears that the forms were designed primarily for use in connection with road and rail services. Certificates of survey were attached in respect of the vessels Okiato and Opua containing details of their tonnage and passenger carrying capacity and stating that they were fit to ply in the Bay of Islands river limits. The certificate for Okiato stated that she was a restricted limit vessel with a registered tonnage of 44.87 whose lifesaving appliances provided for a total number of 136 passengers. The certificate for Opua stated that she was a Class 9/Car Ferry with a registered tonnage of 28.99 and lifesaving appliances for 98 persons. There was also a fare schedule.

  9. The schedule which was attached to describe the timetable for the service which Fullers was seeking to register consisted of its published timetable. It was 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 campervans.

    Tickets are purchased on board.

  10. By letter dated 11 February 1991 NRC replied to Fullers stating that the passenger transport services that Fullers had notified to the Council had been registered under section 49 of the Act on 31 January 1991. In the course of that month NRC gave notice to the public of the services which had been notified to it under section 48 of the Act as passenger services which would operate in the Northland Region from 1 July 1991. The notice included Fullers’ car ferry between Opua and Okiato. It stated that the current service was to be unaltered as from that date. On 17 July 1991 NRC wrote to Fullers enclosing copies of what it described as “registrations of all your organisation’s services that are registered with the Council”. Enclosed with that letter were copies of Fullers’ letter of 31 January 1991 and its attachments. On 3 December 1993 NRC wrote again to Fullers stating that it was currently in the process of updating its passenger transport records. Attached to that letter was a copy of what were described as the “current registered details” of Fullers’ services. Fullers was asked to check and either confirm these details or notify any changes. The copy of the registration which was attached included the following details:

    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 [timings of the first and last ferry as shown on the timetable quoted above]

    FARE SCHEDULE

    ? please provide

    COMMENCEMENT DATE

    Operated prior to 1989.

    In response to this letter Fullers sent to NRC a copy of its fare schedule.

  11. The ramps for this ferry had previously been owned by Northland Harbour Board. That was a local authority trading enterprise. It has now been dissolved. The ramps are now vested in Far North Maritime Ltd (“Far North”). Fullers now has the exclusive use of these ramps under a lease with Far North which expires on 30 September 2005.

  12. It is common ground that a ferry service which involved a departure from either side every 20 minutes would be capable of being operated by one vessel only. This would leave room for the complementary service which Opua Ferries wishes to provide. But a ferry service with a departure from each side every 10 minutes would call for the use of two vessels. This is because about five minutes have to be set aside for unloading and loading vehicles and passengers at each departure point in addition to the five minutes’ sailing time which it normally takes for a vessel to ply between the two points.

    THE DISPUTE

  13. On 28 May 1997 Opua Ferries gave notice to NRC under section 48 of the Act of its intention to operate a vehicular ferry service between Okiato Point and Opua. It enclosed a timetable in which this service was described as a shuttle ferry service with crossings every 10 minutes between the same hours as those stated on Fullers’ timetable but in the reverse direction. In a note appended to the timetable it was stated that the ferry would sail at all times complementary to the existing service. NRC registered this service on 24 June 1997. But Opua Ferries has been unable to operate this ferry as it does not have access to the only ramps which are available. These are the ramps from which Fullers’ service is conducted and to which Fullers has exclusive access.

  14. It might have been expected that the system of registration provided for in the Act would have resulted in the compilation of a public register in which all the details of the registered services were stated with sufficient clarity to avoid confusion and dispute. That however is not what happened in this case. As the Court of Appeal observed in paras 14 and 15 of its judgment, NRC did not compile a register of the orthodox kind. What it did was to place Fullers’ letter of 31 January 1991 and its attachments in a file or folder. It was from this material that the writer of NRC’s letter of 3 December 1993 derived the relevant details. More importantly, the timetable in which Fullers described its service is said to be imprecise. The service is described as a shuttle service. But the document leaves room for argument about its frequency within the specified hours. As the dispute developed between the parties it was suggested that it is open to three possible interpretations:

    1. one vessel operating as a shuttle, with a vessel leaving each port every 20 minutes;

    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 supplemented by a second ferry “as required” or “upon demand”.

  15. On 28 August 1997 Fullers responded to Opua Ferries’ initiative by applying to NRC for the registration of a second vehicle ferry shuttle service to operate every 10 minutes between 1 December and 28 February and during all other school holidays and all other long weekends outside that period. NRC declined this application. On 17 November 1997 Fullers applied to NRC to register a second vehicular ferry service to run all the year round. This application too was declined. On 1 December 1997 Fullers began operating a second car ferry each day between the hours stated on the timetable, and it has continued to provide that service since that date. It had previously been Fullers’ practice to put a second vessel into service only during peak holiday periods and even then not throughout all the hours indicated on the timetable. Mr. Dold, a director of the company, said in evidence that his best guess was that the lowest number of days on which a second vessel was in operation during this period was 50 days, but that in 1997 this increased to 95 days. As the Court of Appeal said in para 18 of its judgment, that extra service during this period was in practice, to an extent, a shuttle service on demand.

  16. Robertson J said that, standing back and objectively reading the material which was contained in the register, he was left with no doubt that what was communicated was a service which involved a crossing commencing at Okiato Point at 6.40 am 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: para 63. He said that this was the view which he formed at an early stage in the proceedings, and that having read all the documentation and considered the arguments of counsel he was confirmed in this view. In his opinion the registration was for a service three times an hour commencing from Okiato at 6.40 am and concluding at Okiato at 9 pm except on Fridays when it was to continue until 10 pm. His conclusion was that 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: para 75.

  17. The Court of Appeal took the opposite view. Blanchard J, who delivered the judgment of the Court, said in para 32 that in its opinion an ordinary reader, after some initial head scratching, would conclude that Fullers had registered, and accordingly obtained a licence for, a ferry operation involving departures from each side every 10 minutes involving two vessels. The Court of Appeal placed particular emphasis on one feature of the timetable which had not been drawn to the attention of Robertson J. This was that a single vessel which adhered to 10 minute crossings in each direction could not be in a position to leave Okiato Point in time for the last run to Opua.

    DISCUSSION

  18. Mr. Tizard for Opua Ferries acknowledged that the answer to the question whether the registration was for one vessel or for two depended on the meaning which was to be given to the documents on the register. But he said that this was only the starting point. The argument that it was proper to make use of extrinsic evidence was developed further by Mr. Brown QC for the Commission. He said that when Fullers registered its service in 1991 it stated that the service which it had described in the documents which it was submitting to NRC was an existing service. But it was clear from the extrinsic evidence that at no time prior to that date had two vessels been operating a ferry service on demand throughout the hours shown on the timetable. In practice nothing like that had been achieved. Nor was the service being operated in that way at any time thereafter until Fullers changed its practice on 1 December 1997 in response to Opua Ferries’ initiative.

  19. There would much to be said in favour of this argument if the relevant documents were contained in a contract between the parties which the court was being asked to construe. If that were so the court would wish to put itself into the same position as the contracting parties were when they entered into their contract. As Lord Hoffmann said in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, 912H, when one is interpreting a document of that kind one is seeking to ascertain the meaning which it would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. The parties’ knowledge of how the ferry service was in fact being operated from day to day at the time when such a contract was entered into would be part of the background.

  20. But it does not follow that the same approach is to be taken when one is construing a public document. The documents included in the register maintained by a regional council under section 52(1) of the Act have that character. This is, and is intended to be, a public register of passenger transport services. Members of the public who consult the register may come from far and near. They may have some background knowledge, but they may have none at all. In Slough Estates Ltd v Slough Borough Council [1971] AC 958, 962 Lord Reid said that extrinsic evidence may be used to identify a thing or place referred to in a public document. But he went on to say that this was a very different thing from using evidence of facts known to the maker of the document but which are not common knowledge to alter or qualify the apparent meaning of words or phrases used in it. As he put it, members of the public, entitled to rely on a public document, ought not to be subject to the risk of its apparent meaning being altered by the introduction of extrinsic evidence. Moreover, the only information which a regional council is obliged by section 53 to ensure is reasonably readily available to the public is that which gives details of the service which the council has registered. The statute makes the position clear. The register is expected to speak for itself.

  21. The register depends for its accuracy on the documents provided to NRC by those whose services it has entered on the register. The relevant entry in this case consists of the file containing the documents which were supplied by Fullers to NRC on 31 January 1991. That is, as the Court of Appeal held, the entirety of the register to which alone it is proper to look in order to ascertain the relevant details of the service that was registered. Ordinary members of the public to whom this information was made available would be able to peruse all these documents. They would see that Fullers had given details of two vessels that were fit to ply across this stretch of water. Making use of a map, they would see that the two points are separated by only a short distance. But it is to the timetable that they would have to look in order to ascertain the frequency of the ferry service between these two points which Fullers was undertaking to provide.

  22. What then would an ordinary member of the public make of the information contained in the timetable?  The key to its meaning lies in the statement, which is set out in capital letters in the centre of the document, that “the ferry operates as a shuttle service with crossings every 10 minutes (approx.) between the hours listed below.”  The first seven words cast no light one way or the other on the question whether this was a service to be operated by one vessel or two. The word “ferry” is used here to indicate the nature of the service which is being provided. The phrase “shuttle service” simply means a service which operates to and fro over a short route. The impression which it conveys, as in the case of the Space Shuttle, is of the movement to and fro of a single vehicle. The phrase, on its own, tells one nothing about the number of vehicles which may be engaged simultaneously in this operation. But as soon as one is told that the service is one “with crossings every 10 minutes (approx.)” the picture changes. The use of the word “crossings” in the plural is striking. On its own it might be thought to be ambiguous. But when it is linked by the word “every” to the statement about frequency, the nature of the shuttle service is revealed. The ordinary member of the public, on arrival at the ferry ramp, would be interested to know how long there was to wait until the next crossing to the other side. The message which this description of the service conveys is that a crossing can be expected from each side every 10 minutes.

  23. The timetable contains some additional information. Times are given for the first and last ferry in each direction, and the reader is told that the ferry is suitable for all vehicles. The word “ferry” is used throughout this part of the document in the singular. A casual reader, looking at this part of the timetable in isolation, might think that it referred to the vessel itself and not to the service which was being provided. But it is clear that it is used in the latter sense in the statement which is set out in capital letters in the centre of the document, and the same usage can readily be attributed to it elsewhere. Nor are the timings which are given for the first and last ferry in each direction inconsistent with the conclusion already reached by the ordinary reader that a crossing could be expected from each side every 10 minutes. They are all capable of being achieved by a service of that frequency.

  24. It is true that the starting times which are given for the first and last crossings from Opua are 10 minutes later than those from Okiato. At first sight this might suggest that only one vessel was involved. But if only one vessel was involved each round trip would take 20 minutes, resulting in three round trips each hour. As the Court of Appeal observed, a single vessel, if it was adhering to 10 minute crossings, could not achieve the time set for the last circuit by this timetable. This is because the last circuit from Okiato is timed to start at 10 minutes to the hour, not at 20 minutes to the hour to match the starting time of 20 minutes to the hour for the first ferry from that side. So a careful reading of these timings would tend to confirm that this was indeed a service with crossings from each side every 10 minutes. It would, of course, be possible to explain this discrepancy by the fact that the service with crossings every 10 minutes is said to be “approximate”. Some slippage in the precise routine was, it might be said, to be allowed for. But the ordinary reader who was seeking to understand the message conveyed by the document as a whole would be unlikely to attach any weight to this point. At best for the appellants, the reader would conclude that the information conveyed by these timings was inconclusive and that the best guide to the frequency of the service was provided by the words which appear in capital letters in the centre of the document.

    CONCLUSION

  25. For these reasons their Lordships are not persuaded, despite the able arguments by counsel for the appellants, that the Court of Appeal misconstrued the registered timetable. They are satisfied that the service which Fullers registered was for a ferry operation involving crossings leaving from each side every 10 minutes using two vessels. They will humbly advise Her Majesty that the appeal should be dismissed. The appellants must pay the respondent’s costs before the Board.


Cases

Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896

Slough Estates Ltd v Slough Borough Council [1971] AC 958

Legislations

Transport Services Licensing Act 1989: s.48, s.49, s.50, s.51, s.52, s.53, s.54

Notes:-

[a] see Fullers Bay of Islands Ltd v The Commerce Commission IpsofactoJ.com: International Cases [2001] Part 2 Case 1 [NZCA]


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