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KITE
Page 77
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OR
OMEN?
Unincorporated Transport Associations Could Be Considered a Menace to Aand B-Licensees by G. Duncan Jewell
A LL the implications of the Mer chandise Transport and Arnold Transport decisions led me, the other day, to another unusual—and possibly disturbing—loophole in this whole issue of C-licence operation and haulage work.
This possible menace to Aand B-' licensees is the carriage of goods under C licence by certain transport associations. It could, if used unscrupulously, be another cause of legal upheaval. Perhaps I am flying a kite on this issue; perhaps I am not.
Typical of these associations are the Textile Distributors Transport Association, by which a number of textile manufacturers—including limited companies—have all their goods carried on jointly owned vehicles under C licence; and the Great Universal Stores Transport Association, which carries under C licence and C hiring allowances the traffic of a large number of associated companies in the G.U.S. Group, The members of the Textile Distributors Transport Association applied for C licences during nationalization, after taking legal advice. There is no suggestion that they are doing anything illegal. There is, in point of fact, no intention to suggest that anybody is doing anything they should not be doing when taking advantage of this loophole. But should the loophole be plugged, in the general interest?
High Court Decisions
The question whether vehicles used by joint owners come within the definition of carriage for hire or reward has been the subject of two cases before the High Court and, on the authority of these decisions, the granting of C licences was considered legitimate.
One of the cases in question was: Wurzai v. Houghton Main Home Delivery Service, Ltd., a limited company registered under the Industrial and Provident Society's Act, 1891 The company used two vehicles, belonging to members of the company, to deliver coal to their houses. A charge was made by the company to each member for delivery. No dividends were paid and the income of the company was disbursed on 'wages, and so on, and in reducing the cost of deliveries, The company held a C licence for the vehicles, The High Court reversed the magistrates' decision, and held that the vehicles were used for hire or reward. Hewart, L.C.J., said that in his opinion the controlling fact was that the Society was a legal entity apart from its members.
No Limited Company
In the second case—Wurzal v. Atkinson and others, the facts were the same except that there was no limited company. A collection of individuals together purchased motor vehicles and used them for delivering coal to their houses, They held a C licence jointly, and here it was decided that the vehicles were not used for hire or reward, Hewart, L.C.J., held that when there was not a transaction between a shareholder and a limited company, as in the first case, but between one member of an unincorporated society and his fellow members, different considerations applied.
He referred to Graff v. Evans (sale of liquor to members of a 'Hub) and said that in like manner the persons at whose houses the coal was being delivered were among the owners of the motor vehicles which were making the delivery, and to say they were having coal carried in those vehicles for hire or reward involved a proposition that they were hiring from themselves and rewarding themselves—a difficult conception.
Suppose there had been two members, and two only, and suppose they had been called partners; could it, except for controversial purposes, have been argued that one partner was hiring the vehicle from the other partner or from the partnership when it was being used to deliver coal to his house?
What had not been tested was whether the same considerations which applied to individuals also applied to persons or companies carrying on businesses, buying vehicles in common, and using them to carry for the different businesses. However, licences were granted on the grounds that joint owners of vehicles, if unincorporated, could carry their goods under C licence. This presumably created a precedent for the grant of similar licences to those of Great Universal Stores Transport Association.
The implications of these decisions are that if it is lawful to form an association which is not a legal entity, it is permissible to obtain C licences to carry the goods of all the members.
There appears to be nothing to stop a haulier forming an association with his main customers and dispensing with the need to seek additional vehicles on A or B licence as business expands.
Apparently the only prerequisites for such an association to obtain C licences for the carriage of members' goods, is for common ownership of vehicles and licences. Customers would only require to have a nominal share in the haulier's vehicles and to apply for licences jointly. Should it be necessary for the association to be non-profit-making, the haulier's recompense could be in the form of wages as transport manager.
Alliances
Even if it were held that a haulier could not be a member of such an association because he has no goods of his own to carry, the biggest loophole of all still remains. Trading concerns operating long-distance C vehicles could form alliances with similar businesses in all parts of the country to ensure back-loads, making C operation much more economical.
Therels nothing laid down in transport law which will allow interested parties to inspect C licences, nor can applications be brought to inquiry or objected to in the normal course of events.
If such practices become general there would be little further need for a B licence, and A licences would only be required for casual . traffic and tramping.
Applications to transfer vehicles from C to B licence, to carry for associated companies when there is not a 90 per cent. shareholding by the parent company, seem completely unnecessary when all that is required is to form an unincorporated association.