There are rumblings about class action in Victoria, Queensland and WA. Real or just hot air?

State governments have the power to acquire your property through compulsorily acquisition, however, legally they have to offer a fair price. They can also buy back or cancel government issued commercial licences such as fishing, water and logging licences, again by paying fair compensation. If the affected parties consider the compensation offered to be inadequate and unfair they can defend their rights by taking legal action and let the courts decide. Why would owners of perpetual taxi licences act any differently when their government literally robs them of hundreds of thousands of dollars in assets? Because their taxi council or association say they can’t win?

by Peer Lindholdt

In July I published an article in support of the VTHCF (Victorian Taxi and Hire Car Families) and their effort to organise a class action against the Victorian Government. It was based on information received from members of the group and a report emailed to all its members following a meeting they held on 17 July, which attracted some 1000 owners. The report laid out the strategy for a class action and the likely cost involved, based on advice from a barrister engaged by the VTHCF committee, a Sir Dr John Walsh of Brannagh, a gentleman considered by his peers to be of dubious qualifications, titles and reputation, as I discovered recently on Google.

I should have googled him before I published the article and so should the VTHCF committee before they engaged him. To my credit, I did question his expertise in running a class action. I’m told the committee is now looking for a reputable law firm with experience in class actions to handle their case. Let’s hope they find one.

Victorian plate owner demo on 5 September

In Queensland things are moving, but slowly, and only on the Gold Coast. A reliable source has informed OZ Cabbie that a lawyer, John O’Donnell, will give a presentation on the subject at the Gold Coast Cabs AGM in early November. Mr O’Donnell is an insurance claims lawyer, ex-TIAIB (Taxi Industry (Australia) Insurance Brokers Pty Ltd), a company partly owned by Yellow Cabs and Black & White Cabs.

We were told that the driving force behind the move to launch a class action is the Gold Coast’s largest fleet operator, Peter Smith, who owns 30 licences and runs 100 cabs. I spoke with Mr Smith, however, he was not willing to elaborate and instead suggested I call Gordana Blazewic, CEO of Gold Coast Cabs. I tried but she didn’t return my call before deadline.

There are 334 licenced cabs on the Gold Coast. The company owns 24 of them, so like Mr Smith, it stands to lose millions of dollars unless the government can be persuaded or forced to pay fair and reasonable compensation. It would thus be reasonable to assume that it would be as keen as he is, to organise a legal challenge. That’s not a foregone conclusion though. Ms Blazevic is on the board of TCQ and there is no evidence that organization is prepared to stand up for Queensland licence owners and support a class action – au contraire!

That raises the question, “Are Queensland licence owners prepared to stand up for themselves?” That may depend on what happens at the Gold Coast Cabs AGM. It could be the catalyst needed to rally others around the state. As for the ‘rumblings’ of a class action in Western Australia, we have been unable to substantiate that. Our only source is VTHCF spokesperson Sandy Spanos.

Following my July article about the VTHCF a substantial number of plate owners from various states contacted me to ask my opinion on what prospects there are for a class action to succeed. I’m not a lawyer so I can’t give legal advice but here are a number of reasons why I believe it would. First and foremost is the way governments have been flogging new licences over the years.

“New taxi licences! A great opportunity for ‘mum and dad’ investors to own and run their own business”. For the past 30 years that has been the main sales pitch used by successive state governments flogging new taxi licences to the public by either auction or tender. Population growth combined with restricted entry virtually guaranteed that the only way the value of a licence could go was ‘up’. Thousands of ‘mum and dad’ investors, most of them migrants, were sucked in and governments made millions out of thin air. Taxi licence investments were considered ‘as safe as houses’ even by banks. Then came Professor Allan Fels followed by Uber and any notion that the Australian political class had even a modicum of morality, compassion or sense of fairness went out the window.

The ‘mad professor’, hired in 2011 by the then Liberal Victorian government to reform the state’s taxi and hire car industry, to garner public support for his conniving plans, exploited his well-honed media profile to demonise taxi licence owners as a bunch of greedy investors who exploited drivers and consumers. It worked a treat. The image has stuck. He conveniently ignored to mention the fact that the biggest plate owner in Melbourne is the government which owns and collects ‘rent’ on 1700 plates and has gained a substantial financial benefit from the rising values in the private licence market, as have the governments in other states.

As part of the Fels reforms, entry restrictions were removed and the government’s annual lease rate for a taxi plate was fixed at $22,500 + CPI, 30% below the market rate. Inevitably the private market was forced to follow suit and consequently by 2013 the value of perpetual licences had plummeted from $500,000 to $300,000. Following the legalisation of UberX and ‘ride-share’ in general they have become worthless, except for the compensation, adjustment package or buy-back deal our corrupt state governments have chosen to offer.

In NSW and Queensland plate owners with one plate will get $20,000, two or more, $40,000. If you are unlucky enough to own more than two you are in even deeper shit. In South Australia it’s $30,000 and $60,000 respectively. Victoria has proposed a “buy-back” scheme, offering owners $100,000 for their first licence, $50,000 for their second and nothing for any others. It further proposes to pay the money over eight years, meaning those with one plate will receive $12,500 per annum … no interest.

NSW, Queensland and SA will finance the compensation through a $1 levy on all fares, taxis, hire cars and ride-share. In Victoria the levy will be $2.

Whether the compensation figure is $20,000, $30,000 or $100,000 is irrelevant. It is still highway robbery leaving thousands of taxi folk, active or retired, and their children, seriously disenfranchised, with many owners facing bankruptcy and/or loss of their livelihood and homes. Here is one example of hundreds.

Linda De Melis’ elderly parents own six Melbourne taxi plates. They were accumulated over 46 years of working in the taxi industry. Her father started driving a taxi in 1961. It took 10 years before they had saved enough to buy their first plate and over the next 35 years of driving and operating cabs he and his wife managed to build their current holding. They retired ten years ago at 70 years of age, leased out their plates expecting to live the rest of their lives in comfort off the lease fees and leaving their children a nice inheritance. In 2011 their plates were worth around $3 million on the open market. Then, with the stroke of a pen, last month Victorian premier Daniel Andrews reduced that inheritance to ZERO as obviously they will now need to live off the meagre proceeds from the Government’s compulsory acquisition of their assets.

Linda, angered in particular by the impact the Government’s reforms are having on her parents’ mental and physical health, felt compelled to write a long passionate letter to the Premier and his transport minister Jacinta Allan. She wrote in part:

“My parents and others like them do not deserve fair and reasonable compensation because they worked hard. Nor do they deserve it because they were poor migrants or good law abiding citizens. These people deserve fair and equitable compensation because the government operated the overarching business, sold them the franchises, dictated their conduct and spruiked the benefits of the investment”.

“Quite unlike anything else, the government has been entrenched in the operation of the taxi industry having orchestrated, controlled and coordinated every aspect. From the vehicle used to engage passengers (right down to the colour of the duco), the security features which must be installed, in some cases the times taxis are able to be on the road, the price they must charge consumers (ie., direct control over the revenue stream), whether the fare be upfront or not, the GST they are obligated to collect, their mandatory affiliation with larger corporations, what drivers wear, where they are trained – the list goes on. Further, it is the only industry I know where the government acts as lawmaker, regulator and investor holding and leasing the licenses of a third of cabs on the road”.

Basically Linda is stating the most obvious reasons why a class action against the government should be successful, not only in Victoria but in every state. Read Linda’s complete letter.

Then remember these proverbs: “Nothing ventured, nothing gained”, “Where there’s a will there’s a way” and “Nobody can help those who won’t help themselves”.

One final piece of advice: First step it to find a reputable law firm with runs on the board in winning class actions. If it is prepared to take the case on a “no win, no fee” basis you know it believes you have a strong case. You’ll still need to raise money to cover the other side’s costs in the event that you lose.

Declaration: I do not and never have owned a taxi licence. My interest is a matter of principle, my belief in ‘a fair go’. Nothing in this article constitutes legal advise.

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OZ Cabbie February 2017

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