AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

T.A.T. Hears Claim for Payment for Goodwill

7th March 1952, Page 30
7th March 1952
Page 30
Page 30, 7th March 1952 — T.A.T. Hears Claim for Payment for Goodwill
Close
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

ACLAIM for £4,452 for goodwill, as no compensation was being paid for cessation of business, was made to the Transport Arbitration Tribunal in London, on Monday, by D. and H. Cuff, Ltd., Blandford, in an appeal against an assessment of £9,906 compensation by the Road Haulage Executive for compulsory acquisition. The company claimed a total of £14,882.

The Executive contended that the average net annual profit was nil.

For the appellant, Mr. P. L. Corpe said that the business was started in 1921. It provided a steady, although modest, livelihood for Dennis and Henry Cuff, who, as directors, drew salaries averaging between £500 and £600 a year. . There was a small profit to carry forward. The nine vehicles were fully occupied with the work of regular customers and were hired regularly to other hauliers.

Directors Joined R.H.E.

The business was acquired in April, 1949, and, said Mr. Corpe, both brothers went to great lengths to ensure that the goodwill was transferred to the Executive. Dennis became depot superintendent at Blandford, running the business formerly operated by Cuffs, with the addition of other vehicles, and Henry became depot superintendent at Gillingham, Dorset.

Although the brothers had agreed that no compensation was payable for the cessation of business, they thought they should receive total compensation of £14,882. They contended that the earning power of the vehicles represented a goodwill market value of £4,452, based on £65 per ton of carrying capacity

The Executive, said Mr. Corpe, offered a total of £9,906, maintaining that the valuation of goodwill would have to be determined by the net profits and the likelihood of their being maintained in the future. Mr. Corpe said turnover was increasing.

Mr. A. E. Webb, Cuff's 'accountant from 1943, said that in the nine years to 1949 trading profits averaged about £2.000 and a reasonable price for goodwill would have been about three times that figure. For the R.H.E., Mr. P. R. E. Browne said, on Tuesday, that, in law, Cuff's was not entitled to compensation for goodwill under Section 47 (2) -of the Transport Act, 1947. On the facts, the goodwill of the undertaking, if sold in ace. ordance with the assumption laid down in that section, would not have fetched the sum claimed.

Mr. E. A. Wilkinson, assistant divisional manager of the South Eastern Division, replying to Mr. Cope, said that from 1935 he was secretary and accountant of Bouts Tillotson, which business, he agreed, was largely built up by the acquisition of other operators. He advised on the amount to be paid for the acquisition of any business, without investigating the accounts to ascertain profits. Sometimes money would have been paid for goodwill, although super profits were not being made.

Mr. J. W. Fordery, chartered accountant, for the British Transport Commission, claimed that there was no goodwill of value in the business. Of a total turnover of £14,890, 77.19 per cent. was derived from six 'customers. if he was advising anyone on buying the goodwill of the business, he would point out the risk of the turnover depending on the six largest customers.

The Tribunal's findings will be announced later.

• BENGAL LIKES TITANS

WITHIN four weeks of shipping five W Leyland Titan 125 b.h.p. doubledeck buses to Calcuttafor service with West Bengal State Transport, Leyland Motors, Ltd., has received an order for another 10 Titans.


comments powered by Disqus