This judgment considered claims brought by taxi-licence holders against the State of Queensland, for losses said to arise by reason of the State allowing ride booking operators (such as Uber) to conduct business without holding a taxi licence. The taxi licence holders sought damages/compensation for breach of contract, equitable estoppel, and contravention of Australian Consumer Law provisions concerning unconscionable conduct. Bradley J found that the first two causes of action had no prospects of success, and so gave summary judgment for the State. Pleadings concerning the third cause of action were struck-out, but with leave granted to replead.
1 May 2020
The plaintiffs are holders of taxi licences issued under the Transport Operations (Passenger Transport) Act 1994 (“the Act”). . They claimed to have suffered losses due to the State of Queensland permitting ride booking operators (such as Uber) to conduct business and carry passengers for reward without holding a taxi licence. . Three causes of action were pleaded against the State, being damages/compensation for breach of contract, equitable estoppel, and for contravention of the Australian Consumer Law. .
By this application, the State sought summary judgment against the plaintiffs (pursuant to r 293 Uniform Civil Procedure Rules 1999 (“UCPR”)), or an order striking out parts of the plaintiffs’ statement of claim (pursuant to r 171 UCPR). . The issue was whether the plaintiffs’ claims enjoyed real prospects of success (for the purposes of considering whether to grant summary judgment), and whether the pleadings disclosed a reasonable cause of action (for the purposes of considering whether to strike-out). –. This summary proceeds by reference to the three pleaded causes of action.
Damages for breach of contract
The plaintiffs contended that each of them had a contract with the State, partly in writing in the terms set out in the licence granted to them, and in the wording of the relevant legislation, and partly implied. . It was alleged that the contract’s implied terms included that the State would “do all things necessary to enable the licence holder to have the benefit” of the licence, and that the licence holder would “only need to compete with other persons holding a licence”. .
These arguments had at least two shortcomings. First, Bradley J considered that “[n]o contract was necessary to give legal effect to the licence conditions” or any of the other regulatory requirements, because each of the alleged contractual promises was the subject of a statutory obligation or an exercise of regulatory power. . Accordingly, “[t]he juristic source of all these obligations was not contract, but statute”. . There were other indications that no contract as pleaded existed – including because, generally, “contractual obligations are not assignable without agreement” (citing Norman v Federal Commissioner of Taxation (1963) 109 CLR 9), whereas here a taxi licence holder was able to transfer a licence without approval or agreement – which “tells decisively against a conclusion that a taxi licence is a contractual instrument”. , .
Second, as to the allegedly implied terms, the plaintiffs had not established that any of them would give “business efficacy” to the contract, were “reasonable and equitable” or were “so obvious it goes without saying”. . Further, the implied terms alleged by the plaintiffs went further than fettering the exercise by the executive of discretionary powers under the Act and purported to bind the State “not to make an alteration to the Act and not to enact any other measure that would result in the plaintiffs … needing to compete” with persons who did not hold a taxi licence. . Bradley J cited authority which indicated that a government “cannot by contract hamper its freedom of action in matters which concern the welfare of the State”, or at least that “in the absence of specific words” an undertaking that would affect the exercise of discretionary powers to be exercised for the public good “should not be imputed” (quoting various authorities therein). .
In summary, his Honour considered that the plaintiffs’ prospects on the contract claim “may accurately be described as fanciful”. . There was “no apparent path” the plaintiffs might take to frame a claim for relief in the form of damages for contract. . Accordingly, the State was entitled to summary judgment on this claim. .
Equitable compensation for an estoppel
The plaintiffs contended that the State had represented to each of them that they “would only need to compete in the provision of their services” with other taxi-licence holders. . This was said to be “coupled with” a number of assumptions held by the plaintiffs, including that “only licensed taxis would be permitted to carry passengers for reward by road”. . The representation and assumptions were “expressed to operate without limit or end” in the pleadings. . It was contended that the plaintiffs relied on the representation and assumptions and that it would be unconscionable for the state to depart from them and cause detriment to the plaintiffs. .
Bradley J noted that the alleged representation was said to arise in various ways, including by conduct and by reason of certain public statements. . However, his Honour considered there was no conduct by which the representation could have arisen – particularly because the representation was contrary to what was provided for by the Act (e.g. at no time was it the case that only licenced taxis were permitted to carry passengers for reward by road – the Act allowed for various bus, tourist and limousine services and the like, which could compete with taxi-licence holders). . As to the public statements, each of them had been made by a Minister. . However, a “Minister cannot speak for or bind any future government”. . Further, “reliance on the representation was unreasonable” because there was an “inherent risk of changes in the law at some future date”. –.
In summary, the equitable compensation claim had no real prospect of success, and so the State was granted summary judgment on it. , .
Damages for contravention of the Australian Consumer Law
Although the pleading did not disclose a reasonable cause of action, his Honour considered that a refinement of the claim might “reveal a cause of action” that was not fanciful. Accordingly, his Honour declined to grant summary judgment. Instead, the relevant pleadings were struck out, but the plaintiffs given time to replead this claim. .