Letter and Spirit
Page 50
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SINCE the Appeal Tribunal became part of the Transport Tribunal in 1951, the decisions have been at once more lucid and more remote from what may be regarded as the spirit of the Road and Rail Traffic Act, 1933. Sooner or later, the personality of the Transport Tribunal was bound to come into conflict with that of their predecessors. The written decision on the appeal by Reed Transport, Ltd., is perhaps the first example of a direct contradiction in the manner of approach.
The Tribunal have incorporated in their own astringent judgment extracts from observations made in • 1947 when the Appeal Tribunal upheld the refusal to grant an A licence to W.H.S. Transport, Ltd., a subsidiary of W. H. Smith and Son, Ltd. The contrast in styles is instructive.
The approach by the Appeal Tribunal was persuasive, man-to-man. It is not appropriate or desirable," the 1947 decision reads, "that the company operating the transport should carry goods for hire or reward for the Parent company, and also for other persons under an A licence." If the same persons, in effect, are allowed to carry their own goods, and to operate for hire or reward, "the whole purpose of the distinction between A and B licences would be defeated." To treat two companies as the same company when the traffic is their own, and as separate companies for the purposes of competition, "is not reasonable or desirable from the standpoint of other providers of transport."
No Criteria •
Reasonableness and desirability are not admitted as criteria by the present Transport Tribunal. They are concerned with the letter rather than with the spirit of the Act, and are resolute against confusing purpose with meaning. By the light of pure reason, they are easily able to prove that the decision in the case of W.H.S. Transport, Ltd., was wrong. They do so by the use of the Section of the 1933 Act that the Appeal Tribunal regarded as clinching their own interpretation of the point at issue. .
Section 12 of the Act lays down certain conditions under which a company and its subsidiaries may be regarded as one for the purposes of getting and using a licence. A parent company may be granted a licence of any kind, and a subsidiary company is allowed to operate it. The licence is generally a C licence, and the Section enables the subsidiary company to use the vehicles for its own traffic and that of the parent ceoripany and any other subsidiaries.
Proof of parentage is required, as well as one or two other formalities, before the licence is granted. Albert E. Reed and Co., Ltd., the parent company in the more recent appeal case, hold a C licence for 132 vehicles, operated by Reed Transport, Ltd. The Transport Tribunal noted, or suspected, that all the formalities had not been complied with, but the omission was apparently due to an oversight, and was not directly relevant to the application which was the subject of appeal.
According to most authorities, Section 12 was intended to make it possible for a parent company to lay on their own transport for themselves and any subsidiary company or companies of which they held 90 per cent, of the issued share capital. The Appeal Tribunal argued from this that the associated companies must be treated as any other trader. They were entitled to operate under a B or C licence, but not to hold an A licence under which they could carry for themselves as well as for other people.
The Transport Tribunal will have none of this. If the parent and subsidiary companies are to be regarded as one throughout the piece, they say, it should be just as easy for a subsidiary as for the parent company to obtain a C licence and lawfully carry traffic for the whole of the group. The illegality of such a practice was established by a decision of the Divisional Court in 1937.
Moreover, say the Tribunal, the precise conditions laid down in Section 12 must be taken to mean that in all other circumstarices parent companY and subsidiary are to be regarded as separate legal entities. As the Tribunal put it, with a rare colloquialism, "it would require clear words in the Act to justify giving the go-by in this way to a fundamental legal doctrine."
List of Traffics
It was, therefore, in order for Reed Transport, Ltd., to apply to the South Eastern Licensing Authority, as they did in December, 1955, for an A licence to carry the following: "General goods—primarily paper and paper products such as finished paper including newsprint, corrugated boxes, paper sacks, towels, tubes and the like paper products for Albert E. Reed and Co., Ltd., and its subsidiaries, and return loads of general goods being machinery, raw materials and other goods for Albert EoReed and Co., Ltd., and its subsidiaries, and general goods for independent concerns."
Out et! the 18 vehicles that were the subject of the application, the company intended that six would replace some of the 35 vehicles that, with nine trailers, were held on a special A licence. Even this substitution was refused by the Licensing Authority, an grounds that, as far as one can see, ought to have precluded the subsidiary from carrying under the special A licence for the parent company.
Law and Logic
On the basis of law and logic, the Tribunal have rejected the arguments of the Licensing Authority, ad have approved the substitution without further discussion. The remainder of the application, involving the use of 12 additional vehicles, has been referred back. If, at the subsequent hearing, the Licensing Authority is satisfied of proof of need, he will no doubt consider he has no option but to grant an A licence.
The damage that the new decision may cause to the haulier .is obvious, although the extent of the damage remains to be seen. There is little that can be done about it. The Transport Tribunal are entitled to change their mind. Their decision is so transparently right that there would be no point in taking whatever further legal action would be possible to contest it. It is not likely that Licensing Authorities will take no notice of the Tribunal's decision. Equally remote is any hope, for a long time to come, of a change in the law to restore the clear distinction between the different kinds of licence.