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Can Goodwill Only be Transferred ?

8th December 1950
Page 54
Page 54, 8th December 1950 — Can Goodwill Only be Transferred ?
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Which of the following most accurately describes the problem?

A Reasoned Argument in Support of the View that in Partial Acquisition,Vehicles Must also be Offered RINCE Mr. J. Foley Eggintoe recently L) suegested that it might be possible for a leudier who sough t partial acquisition to sell only his goodwill to the Road 14aulage Executive. and to retain his vehicles, great controversy has arisen in the road haulage industry. Operators have raised the question et meetings of the Road Haulage Association Mid in some instances it has been keenly debated.

1 he R.H.A. appears to take the rCw that the transfer of a vehicle or vehicles is an essential ingredient of partial acquisition.: The case in support of that opinion, as propounded by Mr. H. Norman. Letts, legaladviser to . the R.FLA., is as follows :—

Section 55 -(2) of the Transport -Act provides that"no compensation shall bee payable in respect -of cessation of business or severancewsless the transferer satisfies the Commission or, in the case of dispute, the Arbitration Tribunal, that one or More of the wehicles to which, or to hire -purchase agreements relating to which, the notice of acquisition is limited, were, during. the 12 months immediately preceding the service of the notice of acquisition (a) used wholly or partly for the carriage of goods in such circumstances that a permit was necessary . . . and (b) customarily selected for use on the occasions during the said 12 months when vehicles were required for or in connection with long-distance work."

• Partial acquisition is a-right which the operator alone can require in preference to total acquisition in the events specified in Section 54 (1) and (2). If he so elects, there is, in Mr. Lelts's opinion, no power given to the "Commission to extend the assets specified itt the notice requiring partial acqtr:sitiOn, although under Seetion 54 (3) the'Cominissicin can refuse to acquire vehicles or property specified in that notice which are ;not relevant properly or contracts.

Vehicles Must he Specified It follows, therefore," says Mr. Letts, '.' that the notice requiring partial acquisition must have Fpt.cified the .vehides—possibly with others—which are subs'eeptently included in the notice of acquisition served and to which it is limited."

Section 55(21 makes it plain that the Subsequent provisions of that section as to compensation for cessation of business or severance can arise only if there be " relevant vehicles."

"Section 55 (3) creates another class or animal known as 'Vehicles of the relevant class'," Mr. Letts points out. They include one or more approved

vehicles (as defined in the preceding sub-section) and (a) trailer, other than superimposed trailers. and (b.) Leiter goods vehicles, being in each ease all goods vehicles et the relevant class (whether vehicles to which. or to hirepurchase agreements relating so which, the notice of acquisition is limited or not) authorized to be Used under A licences or B licences and operated by

the transfererduring the .said months: "Combined compensation for cessation 'of business' and in respect of eeverence is then peyable under Seetion 55(5), calculated at the rate of 170 for each coMplete eon of either (e) the earrying capacity in tons, or, as the case may be, the combined carrying capacity in tons of the , approved vehicle or approved vehicle.. of the relevant _class: or, (b) the minimum total carrying capacity in tons which would have tieen employed on long-distance work if one or more vehicles of the relevant class had been used exclusively for such long. distance work during the said 12 months, whichever is the less."

From Mr. Letts's reading of the. Act it follows that an operator can never obtain the 00 per ton of carrying capacity in respect of any vehicle not included in his notice of acquisition. Even the carrying capacity may . be further reduced if, by using vehicles exclusively on long-distance work, , it could have been carried out by a lesser number of Vehicles and trailers.

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Organisations: Arbitration Tribunal

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