Wellington taxi drivers take company board to court over levy disparities

A Wellington Combined Taxi was parked outside the High Court while the two-day hearing got underway. Photo / Hazel Osborne

A group of Wellington taxi drivers wants the court to weigh in on a levy policy set by the company’s board which the group claims has caused almost $1 million in revenue losses since the Covid-19 pandemic.

Drivers for Wellington Combined Taxis believe the policy, which was set up in 2020 to relieve pressure caused by Covid lockdowns, was unfair and prejudicial.

The group claimed it pitted two groups within the company against each other, those being the owner-operated cab drivers and those who owned taxi vehicles but leased them to drivers. Both groups were considered shareholders.

It said the policy meant the owner-operated drivers had to pay a higher monthly levy, an operating fee, than the group who leased the cabs.

This was an unfair decision made by the company board, the group believed, adding it had also resulted in an almost $1m loss for the company due to the reduced levy rate the other group was paying.

Driver Theo Serafim told NZME all shareholders should be treated equally.

“We feel the directors have lost sight of what they’re here for and not looked after the best interest of the company, that’s our main concern.”

However, the company’s board said there was no such distinction in the policy between the two groups and denied allegations the levies were prejudicial.

Today, the group of six drivers appeared in the Wellington High Court before Associate Judge Andrew Skelton to put forward an application for a derivative action.

The hearing, held at the Wellington High Court, will continue tomorrow.

The application, made under the Companies Act, sought the “differential policy” to be analysed by the court.

A derivative action allowed a shareholder or company director to bring an issue to court on behalf of the company against the board if the company would not do it itself.

The six drivers were considered shareholders as they owned shares in the company through their vehicles. This meant they could seek leave from the court for the derivative action case.

Wellington Combined Taxis opposed the group’s application.

Drivers, many of whom were wearing their uniforms, lined the back of the courtroom for the first day of the two-day hearing.

Judge Skelton will determine whether the application meets the threshold to be heard before the case is able to progress.

Lawyer Adrian Olney, who represented the group of drivers, argued there was differential treatment between the shareholders.

He submitted it was “discriminatory” and “a problem”.

Olney said his client wished to seek damages and to put protections in place for the future.

He said the group felt transparency within the company had been difficult at times, with driver Serafim describing it as the “iron curtain”.

Olney submitted the group’s arguments met the statutory threshold required for its claims to be heard by the court.

There were questions that needed to be explored, including the basis for the decision-making when the policy was implemented, he said.

“It’s a decision crying out for careful and robust analysis but what we see on the face of the evidence is no such analysis.”

Lawyer Michael Cavanaugh, for the directors of the board, submitted there was never such a distinction or prejudice between the two groups.

He argued the policy applied to all shareholders and was one that reflected the use of company services.

Covid had left a “lingering traumatic economic effect”, and the company lost more than 90 per cent of its business overnight, Cavanaugh said.

He believed the submissions from Olney and the drivers did not meet the threshold for the case to continue.

The proceeding continues tomorrow.

Hazel Osborne is an Open Justice reporter for NZME and is based in Te Whanganui-a-Tara, Wellington. She joined the Open Justice team at the beginning of 2022, previously working in Whakatāne as a court and crime reporter in the Eastern Bay of Plenty.