Merchandise Transport Ltd v British Transport Commission

JurisdictionEngland & Wales
Judgment Date28 July 1961
Judgment citation (vLex)[1961] EWCA Civ J0728-6
Date28 July 1961
CourtCourt of Appeal

[1961] EWCA Civ J0728-6

In The Supreme Court of Judicature

Court of Appeal

(From The Transport Tribunal)


Lord Justice Sellers

Lore Justice Devlin and

Lord Justics Danckweets

Merchandise Transport Limited
British Transport Commission and Others
Arnold Transport (Rochester) Limited
British Transport Commission and Others


Mr. E. S. FAY, Q. C. and Mr. D. L. M. McDONNELL (instructed by Mr. M. H. B. Gilmour) appeared on behalf of the Appellants the British Transport Commission, and (instructed by Messrs. Peacock & Goddard, Agents for Messrs. Cartwright, Taylor & Corpe, Bristol) on behalf of the Appellants Guest Carriers and Others

Mr. MAURICE LYELL, Q.C. and Mr. C.R. BEDDINGTON (instructed by Messrs. Mawby, Barrie & Letts) appeared on behalf of the Respondents Merchandise Transport Ltd.


Mr. E.S. PAY, Q. C. and Mr. J.R.C. SAMUEL-GIBBON (instructed by Mr. M.H.B. Gilmour) appeared on behalf of the Appellants the British Transport Commission, and (instructed by Messrs. Waterhouse & Ca, Agents for Messrs. Champion & Champion, Tenterden, Kent) on behalf of the Appellants Walkers Garages (Birchington) Ltd, and Others,)

Mr. C. R. BEDDINGTON (instructed by Messrs. Mawby, Barrie & Letts) appeared on behalf of the Respondents Arnold Transport (Rochester) Ltd.


: I have prepared two separate judgments.




This is the first appeal from the Transport Tribunal to this court and quite properly the argument has travelled over a wide area covering matters incidental to, as well as those more directly involved in, the appeal.


Mr, Pay for the appellants commenced his submissions by a consideration of the extent of this court's jurisdiction. It is to be found in section 17 of the Railway and Canal Traffic Act, 1888, which permits no appeal upon a question of fact but expressly empowers This court to draw all such inferences as are not inconsistent with the facts expressly found and are necessary for determining the question of law and this court is given such powers for that purpose as if the appeal were an appeal from a judgment of a superior court. This court may make any order which the Commissioners (now the Transport Tribunal) could have zede and its decision is final except where there has been a difference of opinion between any two appellate courts. It was conceded by Mr. Lyell on behalf of the respondents that that section governs this appeal and it becomes unnecessary to set out the tortuous statutory route which the section has taken.


The cases which have been cited have been in relation to earlier relevant statutes, in particular the Road and Rail traffic Act, 1933, the Transport Acts 1447 and 1953, and much of the argument has been in relation thereto.


But The Road Traffic Act, 1960, consolidated, with corrections and improvements, the relevant enactments, and it will be more convenient and perhaps now more helpful to make reference only to the provisions of this Act which came into operation, as far as material here, on the 1st September, 1960. The hearing before the Licensing Authority was in May, 1960, and before the transport Tribunal, on appeal, in November, 1960.


Part IV of the 1960 Act deals with the regulation of carriage of goods by road. By section 164 a "carrier's licence" is required by a person who uses a goods vehicle for the carriage of goods (a) for hire or reward or (b) for or in connection with any trade or business carried on by him with some exceptions not here material. The classes of carriers' licences and acts authorised thereby are set out in section 166 in three classes: "A" public carrier's licences "B" limited carrier's licences; "C" private carrier's licences; and section 168 stipulates conditions which apply or may be applied in the circumstances stated, some of which call for consideration in the present case.


It is difficult to summarise the differences in the classes without being as exhaustive as the sections of the Act. The public carrier's licence conveys by its name the nature of the trade to which it refers and apart from Contract "A" licences under special provisions in section 174 it refers to the general carriage of goods for the public within the locality and according to the nature of the goods contemplated. The "A" licence only permits the carriage of goods of others and not carriage for or in connection with any other business carried on by the holder of the licence, except goods carried incidentally to his haulage business. The "B" licence may be used for two alternative purposes, either private carriage or for Hire and reward subject to conditions. The "C" licence does not permit the holder to use his vehicle for any but his own goods unless specially authorised in an emergency and an application for a "C" licence cannot be refused b. v. the Licensing Authority if there is no objection to the character and conduct of the applicant: section 174 (3).


The private carrier therefore cannot make inroads on the traffic which is to be carried under,!A" licences for it permits of no return loads not owned by the holder and no question of competition arises. Under a "B" licence competition may arise out as I read the Act it is subject to control and gives rise to the main issue in this case.


Section 174 (1) gives full power in his discretion to the Licensing Authority to grant or refuse an application for a licence, subject to the Act and to a right of appeal to the transport Tribunal by a person aggrieved: section 175 subsections (1) and (2).


Before considering the procedure governing the granting of carriers' licences it is convenient to turn to the facts which brought the respondents to require and apply for additional "A" licences. Harris Lebus Limited are large manufacturers of furniture with premises at Tottenham for the manufacture of cabinet furniture and at Reading for upholstered furniture. I read from the detailed findings of the Licensing Authority at page 13. Paragraph 3: "From 1928 until 1949 Harris Lebus Ltd. used public hauliers, but after nationalisation they found the services of British Road Services not altogether satisfactory and went in for 'C hiring, supplying the drivers themselves. They continued to use British Road Services to some extent but as business expanded they started to build up their' licensed fleet. After denationalisation they formed Merchandise Transport Ltd. in 1955 as a separate road haulage company to tender for British Road Services' units and they were granted 13 Special 'A' licences for 19 vehicles and 3 trailers which were later converted to ordinary 'A' licences, Merchandise Transport are a wholly owned subsidiary of Harris Lebus and many of the directors are common to the two companies. 98 shares are held by Harris Lebus Ltd. and 2 by Mr. A. Lebus. In 1957 Merchandise Transport acquired C.B. Dormer (Leyton) Ltd. and in 1958 C. B. Dormer (Islington) Ltd. 98 3hares of each company are held by Merchandise Transport and 2 by Mr. Chidwick Secretary of Harris Lebus Ltd. These acquisitions brought Merchandise Transport 38 additional vehicles on 'A' licence and 2 on 'B' licence. The two Dormer companies have now no customers of their own as their fleets have been amalgamated with the Merchandise Transport fleet. Mr. Forrest, the Transport Manager of Merchandise Transport, estimates that of the total carryings of the combined fleet 61 per cent, is for Harris Lebus and that 953 per cent, of the 39 Per cent, carried for other customers represents return loads. Thus to all intents and purposes the three haulage companies work entirely for Harris Lebus on outward journeys. The 'A' licensed vehicles are said to be used mainly on long haul work, the local work being done mainly by Harris Lebus vehicles on 'C' licence and 'C' hiring. The vehicles of all lour companies are said to be garaged at one place. "


Paragraph 4: "The principal object of the applications is stated to be to form a single integrated fleet of 'A' licensed vehicles primarily to serve the extensive transport needs of Harris Lebus Ltd. It is claimed that there would then be simplifiestion of record keeping, ability to interchange drivers and general economy on overheads. It is not denied that there would be a considerably increased opportunity to carry return loads and that there might be a certain amount of abstraction from existing hauliers".


The application by the respondents, dated the 5th February, 1960, to the Metropolitan Licensing Authority was for a variation of an "A" licence so as to permit them to use in addition to the vehicles then authorised thereunder (a) 112 Luton (furniture) vans and 7 articulated units (tractors and trailers) and (b) 7 Luton vans "to be acquired". At the date of the application all the vehicles (other than the 7 vans "to be acquired") were the subject of a "C" licence held by Harris Lebus Limited and. were in regular operation. In these circumstances what was sought to be achieved was not inappropriately referred to as a "switch" from the manufacturers to their subsidiary and controlled company, the respondents. It was a "switch" on a considerable scale.


The Licensing Authority refused the application and his conclusion and findings are in paragraph 22 of his Decision of the 17th June, 1960, as follows "As in deciding this application I have to have regard to the public interest, I do not think it would be right to ignore the obvious implications of a grant. It may be that there are not many large 'C' licensed operators who by the simple device of establishing a transport subsidiary would be able profitably to switch to 'A' licence activities. But obviously there are some and there is substance in the fears of...

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