A Licences Not for Subsidiary
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Companies, Says Tribunal
I N dismissing an appeal against the Metropolitan Licensing Authority's refusal of an A licence to W.H.S. Transport, Ltd. the Appeal Tribunal has made it clear that such a licence is not appropriate for a subsidiary company which wishes to carry goods for hire or reward mainly for a parent concern. W.H.S. Transport, Ltd., is wholly owned by W. H. Smith and Son, Ltd., the well-known wholesale and retail newsagent. Since 1934 the transport organization has been carrying goods on behalf of the parent company outside the London area, and does a limited amount of work, not exceeding 10 per cent, of the total, for other persons under a pooling scheme.
Since 1941, Thomas Tilling, Ltd., has provided under contract the transport facilities required by W. H. Smith and Son Ltd., in the Metropolitan Area, operating 47 vehicles for that purpose. These vehicles, run under an A licence. have been employed by W. H. Smith and Son. Ltd., not only in the distribution of that company's goods, but also, under a pooling scheme, to carry other London wholesale newsagents' parcels of newspapers and periodicals.
Transfer of Work
The company wished its subsidiary to take over the work carried out by Thomas Tilling, Ltd., and therefore applied to the Metropolitan Licensing Authority for an A licence for 34 vehicles. This the• Licensing Authority refused, suggesting that application should be made for a B licence.
No complaint was made about the facilities provided by Thomas Tilling. Ltd.. but the appellant stressed the high standard of vehicle maintenance necessary in newspaper distribution and the urgency of circumstances connected with it. The convenience and economy of centralized control and of ability to transfer vehicles from one traffic area to another, in the case of breakdowns, were also emphasized.
The Tribunal accepted the plea of convenience and held that on that ground the appellant was entitled to operate the vehicles required to carry the goods of W. H. Smith and Son, Ltd. The fact that similar control could be exercised if the vehicles were run under a Contract A licence by some other haulier was not sufficient to rebut this claim, once it was decided that the transport required must be specially provided for W. H. Smith and Son, Ltd. '
No Shortage
No evidence was produced to show that there was any shortage of transport to carry the newspapers at present being distributed by the vehicles of Thomas Tilling, Ltd.
The Tribunal pointed out that where the share capital of a subsidiary was owned by a parent company, it was not appropriate or desirable that the company operating the transport should carry goods for hire or reward for the parent company and for other persons under an A licence.
" The whole purpose of the distinction between A and B licences," said the Tribunal, "would he defeated if. in every case where applicants could afford the very small expense required to incorporate separate companies, A licences were to be granted to allow the companies to carry goods for hire or reward, and also for or in connection with businesses carried on, in effect, by the same persons who also operate the vehicles, but through different companies."
The Tribunal added that it was not without significance that W.H.S. Transport, Ltd., wished to use its vehicles almost entirely for the parent company and that haulage to be done for third parties was very limited.
Undertaking Rejected An undertaking that the company would not operate as a general haulier was not accepted by the Tribunal as justification to grant an A licence.
Without deciding whether a B licence should he granted, the Tribunal could not see that if such a licence were issued, there would be any difficulty in framing special conditions to meet the reasonable requirements of the appellant and the parent company.
It could he arranged that vehicles could be used for hire or reward in the Metropolitan Area for goods sold or circulated by W. 14, Smith and Son, Ltd., and by other wholesale newsageritS under a pooling scheme, and to replace, on breakdown or during overhaul, vehicles operated by W.H.S. Transport, Ltd., under similar licences in other areas.