Top court refuses Reolian’s application for compensation
The Court of Final Appeal has brought closure to a case in which a former bus service operator sued the government for compensation over the latter’s decision.
The initial complainant is Reolian Public Transport Co. Due to its creditor position, Bank of China Ltd. was allowed to be the auxiliary entity in the legal procedure.
Complaints against the government have been overruled by the top court.
According to the court, in 2012, the then Chief Executive permitted a raise in the service fees per person paid to the then three bus operators. As the decision stirred up heated social debate, the head of the government instructed the Secretary for Transport and Public Works to review the procedures through which the service fees could be adjusted.
Later, the Secretary ordered the director of the Transport Bureau (DSAL) to demand bus operators to improve their services and implement a quality assessment mechanism. Prior to this, no adjustments to service fees were allowed.
On April 10, 2013, adjustments to the fees were allowed on all bus operators but Reolian, in consideration of the latter being involved in unresolved complaints.
In response to the decision, the then bus operator filed a judicial appeal against the government and its head, as well as the DSAT director. The complainants requested a difference in the service fees that it considered itself eligible for during the period from June 12, 2012 to May 31, 2013 – nearing MOP40 million, as well as the rights to receiving the service fees as deemed by a Chief Executive Dispatch.
Reolian was represented by its bankruptcy administrator.
As the judicial procedure rolled out, the Administrative Court first overruled a counter-complaint by the government. Meanwhile, it overruled the complaints filed against the government, accepting the Reolian’s illegitimacy as a legitimate reason.
The complainants disagreed with the court’s view and thus filed for an appeal at the middle court, which overruled the point about the complainant’s illegitimacy as justification. It returned the case to the Administrative Court for further procedures.
The government disagreed with the judgment and filed for an appeal at the top court. It was represented by the Public Prosecutions Office (MP).
During the procedure, the top court emphasized that the government, as a signatory in a business contract, has no right to terminate or alter on its own the contract in part or in full. It even pointed out that this right should not be confused with the legal provisions on single-side alteration to offerings.
The court also pointed out that the nature of the contract made between the government and bus operators was public service, in contrast to public tender, meaning that the government has the duty to oversee service quality.
At the same time, the court described the complainant as going back on their own words, citing the fact that before the freezing of the service fees, representatives from the then three bus operators met with the government and agreed on the decision.
