Firms win injunction over school busing

Press, 1 December 1988, Page 19

Firms win injunction over school busing

PA Blenheim Two Marlborough bus companies have won the first round in their battle to save their school bus service contracts in a High Court judgment which has implications for other New Zealand education boards. In the High Court at Wellington, an interim injunction was issued on Friday to prevent the Wellington Education Board from acting on its cancellation of contracts with Starborough Transport and De Luxe Motors. The companies brought the action after receiving notice on November 14 that the board was terminating all contracts held with Starborough Transport, and all but two contracts held by De Luxe Motors. In his decision, Mr Justice Eichelbaum said the interim injunction meant the successful tenderers for the Wellington board’s runs would not be able to begin serving those runs from January 31. He based his decision on the argument by the companies that they had a contract with the board on a "continuing basis” which would not be cancelled unless the service

was no longer required, or was not being fulfilled properly. The parties had agreed on a 10-year period for the contract to allow for the recovery of interest payments made on borrowings to buy new buses. He did not accept there was enough evidence to suggest the companies had contracts for an indefinite term with the board, but he also did not accept that the 2 y 2 months notice given to the companies was sufficient. This included six weeks without income over the summer holidays and effectively cut their notice to only four weeks. Mr Justice Eichelbaum said a proper minimum length for giving notice should be six months. In most cases an injunction would not have been issued solely because the notice period was not long enough, but because the companies stood to lose a great deal if an injunction was wrongly withheld, Mr Justice Eichelbaum said. Starborough Transport would lose up to 98 per cent of its business, and De Luxe up to 40 per cent if the new tenders were awarded. The former had buses and equipment

valued at $177,000, the latter had 14 school buses valued at $400,000 tied up in its business. Staff would be faced with redundancy as well, His Honour said. De Luxe Motor’s proprietor, Brad Smith, said the injunction meant his company could now go to court to settle its grievances and have the terms under which it was employed sorted out. Since taking over the business in 1972, and as far as he could tell since the 19305, the company had had no written contract with Wellington Education Board. The firm had always been encouraged by the board to improve vehicles and maintain high safety standards, and did so on the understanding that the arrangement would continue until the 10 years agreed on for recovery of interest charges expired, the service was no longer needed, or it failed to provide an adequate service. The Wellington Education Board general manager, Graham Wilson, said the decision had national implications for education boards.