C-licence Judgment
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another viewpoint
By R. E. G. BROWN, F.C.I.S., M.Inst. T.
IT was difficult to tell from Mr. Titsley's account (in "Licensing Casebook ") of the Divisional Court decision in "Hammond v. Hall and Ham River Ltd." whether his emotions were aroused more by thoughts of the possible plight of tipper hauliers or made mildly apoplectic at the thought of C-licensed operators being paid for carrying goods. Obviously, the decisioti will be controversial, although the controversy will probably be overtaken by Geddes. What is quite certain is that the effect of the decision on hauliers is not a factor which the Metropolitan Licensing Authority will have to take into account in deciding whether or not to appeal to the House of Lords. He has to administer the law as it stands—good or bad—and no doubt will reach his decision in the light of his interpretation of this and previous High Court decisions on this difficult problem. More of these anon.
am more concerned with what seems to me to be a serious over-emphasis on the " payment " factor in the case. Mr. Tilsley is far too knowledgeable on these • matters to wish to infer that payment for C-licence carriage is odd, unusual or illegal. Yet I fear that is precisely what his comments, taken in conjunction with the headline. may well have done. To one who has to answer questions on this point month after month, year after year, the renewed confusion which might arise from this in so widely read a journal as The Commercial Motor is daunting, to say the least. I hope, therefore, I may be forgiven for starting at square one with the somewhat elementary factual statement that the 11 m. C-licensed vehicles in the country are operated by business men for the same reason as they do anything else —to make, or try to make, money. It is not even enough to say that the cost of running them is recovered in the selling price. In most cases, the cost is an ingredient of the total productive, manufacturing or marketing costs of the business concerned, from which the profitable selling price is eventually calculated.
For Profitable Payment In short, C-licence operation is. normally carried out not only for payment but for profitable payment. It is entirely up to an individual operator whether to adopt the usual course of losing its distribution costs in its selling price, or to make a separate charge. Whichever course he takes makes no difference to the legality or illegality of the carriage. This point cannot be stressed too strongly. Indeed, the wording of the Road Traffic Act, 1960, makes it abundantly clear that there is an inherent assumption that all carriage of goods for business purposes is for reward. Without such an assumption, the particular and precise wording of Section 164 (5) would be superfluous:
"Where goods are carried in a vehicle, those goods shall not, for the purpose of this Part of this Act or the Thirteenth Schedule thereto, be deemed to be carried for hire or reward if:—
(a) They are goods sold, used or let on hire or hire-purchase in the course of a trade or business carried on by the person using the vehicle, and are being delivered or collected by him; or (b) They are goods which have been, or are to be, subjected to a process or treatment in the course of a trade or business carried on by the person using the vehicle, and are being delivered or collected by him."
I omit sub-paragraphs (c), (d) and (e). which are not particularly relevant to these comments.
As I said, this is square one, but it is the point from which, in the Traders' Road Transport Association, we always start to look at a member's query. It will be noticed that the section mentions neither ownership of the goods, nor the question of charging—these are not entirely irrelevant as various High Court judgments will show, but they are secondary. The first considerations are:—
Is the licence operator collecting or delivering goods which have been or are to be (a) sold; (b) used (c) let on hire or hire-purchase; (d) subjected to a process or treatment in the course of a trade or business carried on by him? If it is possible to give a clear cut "yes " to any one of these questions, then the carriage is not, according to this section, carriage for hire or reward. A number of High Court judgments confirm that this is the correct approach.
In practice, controversy has usually arisen over whether or not there has been use of the goods, or treatment or process. The trader or industrialist seeking official guidance on a new project does not find it easy. The Licensing Authorities, like the Ministry, have no power—as they always carefully state— to attempt to interpret law. Any opinion they give on the type of licence needed to cover a particular project is invariably extremely conservative. This has always especially applied to the activities of contractors in public works, building. demolition and so forth. This caution was undoubtedly influenced by the Spiller v. Thomas Grit and Aggregates Ltd., 1937. It was held that carrying surplus excavations to disused gravel pits for hire or reward did not come within
(a) above—that is, the goods were not used, and therefore a B licence was necessary.
With the passage of time, this judgment apparently acquired the aura of a golden rule for all such cases. That is how it appeared to me when I came into the goods carrying side of road transport after the last war, as the licensing practice gradually re-emerged. The applicant generally did not mind much what his licence was called, so long as he got it—at least that was the attitude until a certain act limited Band Alicence haulage to 25 m.p.h. Then it very soon became evident that to many contractors such a limit was unacceptable, and there was to be no disposition so far as the larger firms were concerned to allow large contracts to be dependent upon a permit issued by a nationalized undertaking.
"Using" or " Processing" Personally, I had long felt that too little attention was being given to " using " or "processing ". When I felt satisfied that either of these elements was present, I unhesitatingly advised members to rely on -their C licence (operators prefer specific advice rather than ifs and buts).
George Wimpey and Co. Ltd. decided to stick to their C licence in carrying out a large, open-cast mining contract which involved moving excavated coal to a washing and cleaning plant, and then delivering it. The Licensing Authority took their challenge to the High Court in 1957.
The Lord Chief Justices ruled that they were satisfied that this was processing within Section 164 (5 (b))—the carriage was wholly incidental to the main business of the company.
However, there were other canons to which the Licensing Authorities adhered, one being that "process" must of necessity imply some physical change in the goods. Until 1957, they were quite adamant that packaging or processing for packing, such as grading and so on, were not "processes ". Then the High Court decided in Carpenter v. W. Lusty and Son Ltd. that in the context of the business of that company " packing " was a process.
The Lord Chief Justice said: "In my opinion. and I think in the opinion of my brethren, it is impossible to say that these export packers and forwarding agents were not subjecting goods to a process or treatment in the course of the trade or business carried on by them. That is exactly what their trade is: their trade is to prepare these goods for shipment and to treat them by putting them into suitable containers, and. no doubt, getting them into as small a space as possible. In my opinion, the learned Magistrate came to a perfectly right decision on that point.
The trouble is that most of us, including the Licensing Authorities, tend to treat individual decisions as having a much wider implication than they usually have.
Not wholly referable
This tendency is very well illustrated by the "Corbett and Miller v. Bartham " case. Here the contractors were carrying ballast to fill a pond. Lord Chief Justice Goddard held that this was not wholly referable to their business and was, therefore, in breach of their C licence. At least one Licensing Authority made it known that in his view this meant that sand or ballast contractors could not move debris and such like to fill in pits in C-licensed vehicles, even if they had a contractual obligation to do so, as a condition of excavating.
6.t the Hammond v. Hall and Ham Riser Co. Ltd. case which led to Mr. Ti:s:ey's article shows very clearly that the Hia.h Court had established no such sweeping principle. In the first case, the Court held that the material used to fill the pond was not used in the ordinary course of the company's business. In the Hail ease, the Court held that filling the nit after excavation of sand and gravel was a " use" of material in the ordinary course of business.
It was as simple as that, and a very timely reminder that in these cases the courts have usually been interpreting facts and deciding whether the facts in the particular cases come within the law as laid down by 5(a) and 5(b).
Undoubtedly other cases will arise ... Geddes permitting. There is still a great deal of "no man's land where the Licensing Authority's insistence on a B licence is also challengeable. The whole field of warehousing and stockholding has, I think, been clouded by a somewhat narrow interpretation of Section 168 (I) which states that an A-licensed vehicle shall not be used to carry goods in connection with a trade or business carried on by the licence holder, except where such storage or warehousing of goods as may be incidental to his business as a carrier, This clause logically assumes that a carrier may also be a warehouseman. It does not. however, say that a warehouseman is a carrier, and yet it has always been generally considered that a C Licence is not sufficient for the carriage of goods which are to he warehoused or stored. Yet there are many businesses where specialized warehousing storage is an important part of the business, which is not basically a haulage business. One thinks of ne storage of agricultural produce—grain until it is wanted, or fertilizer which the farmer only wants at certain times of the year. yet which the makers have to produce all the year round. Cold storage. especially of fruit. is another example which immediately comes to mind. I come across many cases where a specialist in these kinds of storage asks if with a C licensee he can collect or deliver goods which he does not own, and does not intend to own: does not sell and does not use. In my view, in many cases he can. In view of the Lusty decision it is very likely that the High Court would rule that specialized storage of this kind is a process, and carriage of the goods can therefore be done with a Clicensed vehicle—providing, of course, it was shown that the main business of the applicant was specialized storage as such, or storage as a by-product of marketing the goods he has manufactured. The same view could be taken of people who carry on a business of stockists and who are not necessarily the direct sellers. I cannot possibly see how cold storage can be other than a process. However, this is not the official view, although that does not necessarily make it wrong.
Markedly consistent
Whether or not such generous interpretation' of C-licence carriage is desirable. I leave to others to debate. My purpose is to counteract the impression that ownership of goods or payment for carriage is of particular import in relation to C-licence carriage. As the High Court judgments, which have been markedly consistent, show the dominant question should always be: Is this a sale, a let, a hire, a use, a process or a treatment in the ordinary course of the business to which the transport of goods was ancillary?