“Buy back, buy fair”, “No deal!” – Melbourne plate owners reject government’s revised offer

On 3 December, a warm and sunny Saturday afternoon, hundreds of angry taxi plate owners and their families treated Melbourne to yet another rally in front of Parliament House. It was called in response to the Andrews Government’s slightly improved terms for its compulsory acquisition of Victoria’s perpetual taxi licences. The original offer for Metro licences was $100,000 for one licence, $50,000 for the second and zero for any additional licences owned by the same person or entity. It proposed to pay the money over 8 years. The revised offer provides for multi-plate owners to also receive $50,000 for their third and fourth licence and the payment terms have been reduced from 8 to 2 years. The response from the plate owners and their representative organization, the Victorian Taxi and Hire Car Families, should have been “See you in court!” but it wasn’t. Naively, they still believe they can negotiate a happy ending.

by Peer Lindholdt

Sofie, Taxi Power, Facebook, 12:19pm Dec 11

“LETS NOT BE DELUSIONAL, THE PUBLIC AND MOST POLITICIANS ARE NOT ON OUR SIDE. WE NEED TO TAKE STONGER ACTION, JACINTA [Allen, Minister for Passenger Transport] DOESN’T CARE, THE PREMIER DOESN’T CARE AND THE PUBLIC DON’T CARE. WE CAN WRITE LETTERS AND LOBBY MPs BUT REALLY WHAT IMPROVEMENT TO THE PACKAGE DO WE EXPECT? WITHOUT DISRUPTION WE WILL GET VERY LITTLE IMPROVEMENT. THE GOVERNMENT HAS DISRUPTED OUR LIVES - NOW WE NEED TO DISRUPT THEIRS.”

By Jove, I think she’s got it. The above is the first paragraph of a long but eloquent letter posted to the followers of Facebook forum Taxi Power. Sofie is a Melbourne taxi plate owner, an inspiring activist and co-founder of Taxi Power, a more militant offshoot of the VTHF (Victorian Taxi and Hire Car Families). Like her ‘sister in arms’ Linda De Melis, who I quoted in my Editorial last month, she is bright, articulate and passionate about fighting for a fair and just buy-back deal from the government.

The December rally in Melbourne was organised by Taxi Power and supported by the VTHF. As taxi industry rallies go it was a great success. It was well organised with a sea of yellow placards and t-shirts sporting slogans such as “Buy back, buy fair” and “No deal” and chanted by the crowd of more than 500 owners and their families. Linda De Melis, the firebrand daughter of a 79-year old retired owner-driver, delivered a rousing speech to enraptured applause, which set the mood for two prominent guest speakers, Federal Labor MPs David Feeney, the member for Batman, and Peter Khalil, the member for Wills, who both pledged their support and promised to lobby their state colleagues for a better deal.

Mr Feeney told the protesters how proud he was to fight alongside them and that, “We know that we can have a constructive dialogue with this government, but only united will they hear our voice.”

“The message to the state government is simple”, he said, “A fair go for working Australians who made an investment in this country in good faith. Anything else is unfair on you and it’s unfair on the broader community.”

Then Mr Khalil got on the mike telling the crowd how taxi drivers and their families have been coming to his office in tears, concerned about their future and asking for his support.

“They looked into my eyes and they told me their stories and what I saw was deep pain, deep frustration, anxiety,” he said. “David and I will be making further representations to the minister and to the government to get a fair package, a just package”.

“Don’t forget there are many state MPs who are also on your side and work very hard behind the scenes. They are making the case as well because we have all seen the pain in your eyes, we all see our own families when we look at you, we all feel the same frustration and anger that you feel.”

How the crowd lapped it all up, the sincerity, the promises, the political theatre of it all.

“Constructive dialogue with this Government!” The VTHF has held talks with ministers and bureaucrats for more than 2 years, it has organised numerous peaceful demonstrations, industry meetings and email campaigns reaching every MP in the state, lobbying for a fair deal and a level playing field. Every step of the way the VTHF committee has played by the rules, every step of the way the Government has abused their trust in the system and the promises it made, yet the committee still say, “We will continue to meet with politicians and their advisors to ensure we get the best result”.

What is ‘the best result’? Is it the same as ‘a fair result’ or is it whatever modestly revised offer the government may or may not come up with next? Would the VTHF consider an extra $25,000 a win? Would its members?

At the end of her letter Sofie asked her Facebook mates for ideas on how to tackle the government. They came thick and fast with various suggestions on how to disrupt the traffic in the CBD. Not one respondent suggested ‘disrupting’ the government by taking legal action despite an appeal from the VTHF as far back as July, for owners to commit to a class action.

At a meeting organised by the VTHF on 17 July and attended by around a thousand stakeholders, a barrister, Sir Dr John Walsh of Brannagh, enlightened the crowd on what it would take to launch a class action. Following the meeting the VTHF emailed a detailed report to its members laying out the strategy and the likely costs involved in running the case ($500,000) and cover the Government’s legal costs, in the unlikely event of a loss ($1 million). No money was asked for upfront, but the owners were asked to make a legally binding commitment to contribute $1,500 per plate as surety in the event that it was agreed to proceed with the class action. The money was to be placed in a trust fund and would be refunded if the case was won. That it was soon discovered that ‘Dr John’ was a gentleman of rather poor repute, considered by his peers to be a charlatan and a con artist, put a quick stop to proceedings. However, as previously reported in OZ Cabbie, VTHF president Sandy Spanos told us her organisation had found and was in talks with a highly respected law firm to pick up the pieces. At the time, she declined to divulge the name of the firm. That was nearly two months ago.

While I may disagree with most plate owners on many things about the taxi industry, I do agree on one and that is that they deserve a fair price for their assets i.e. their perpetual taxi licences, which they bought and held on to in good faith. I have published plenty in support of class actions in the past sic months and the reasons why I believe they are the only option left, not just in Victoria, but other states as well. However, Melbourne owners appear to have the strongest case thanks to the Fels reforms and the $22,000 + CPI annual lease fee mandated for government leases in 2011. Used as a benchmark, that equates to a $300,000 value of a perpetual plate if based on a 7% return. Owners may also have a case for compensation for loss of past and future incomes.

Unfortunately the VTHF is fast running out of time. The buy-back legislation is scheduled to be presented to parliament in March 2017. Launching a class action beforehand should in my view delay the bill’s introduction. But don’t forget that Vic Parliament will shut down until 7 February. Doesn’t leave the VTHF much room to wriggle.

For this article I again asked Ms Spanos whether the VTHF has in fact engaged a law firm, if so, which one, and what advice they had received to date so I might give some hope to the many plate owners around the country who read OZ Cabbie. I’m yet to receive a reply.

As the only seemingly functional and well organised owner groups in the country, the VTHF and Taxi Power, should they get their act together, could have a snowball effect Australia wide. Plate owners in other states are being screwed substantially more by their governments than owners in Victoria.

If there is one thing the Andrews Government is worried about it is that the VTHF starts legal proceedings before it can get its legislation through Parliament. It knows it can’t win in court and that losing would cost it well over a billion dollars, whilst its latest buy-back proposal will cost only $300 million plus the $50 million it has allocated to its hardship fund (now called the Fairness Fund). That is all money it expects to retrieve over time from the $2 trip surcharge, estimated by government economic modelling to gross it $44 million per annum. That it has also made hundreds of millions of dollars from leasing and selling taxi licences over the past 30 years is conveniently ignored.

It spent $100 million on Professor Allan Fels (now a director of Uber’s international advisory board), his reforms and their implementation between 2011 and 2013 only to scrap 90% of them three years later to accommodate Uber. This is a government in total chaos, so incompetent, contemptible and morally corrupt, that the only way to deal with it is through the courts. Unfortunately it appears that plate owners are too shell-shocked and timid to take it on.

Linda De Melis on 19 October 2016 emailed a letter to every Victorian MP. Carefully thought out, it explains in great detail how successive governments, through legislation, created the taxi licence and built the public perception that it was even more secure than investing in property, whether for private use or as in investment, and how the Andrews Labor government is now attempting to pull out of the collective understanding that a licence is an asset. Linda’s letter is not intended as a legal argument, it’s simply trying to inform. However, the information it provides would give a legal team plenty of ammunition.

Disclaimer: Nothing in this article constitutes legal advice.

 
 
 
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OZ Cabbie February 2017

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