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PostPosted: Tue May 02, 2006 11:01 am 
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Captain Cab has referred to this case which I think was discussed on TDO well over two years ago. It is one of the many cases of this kind that readily sticks in my mind because it involved the transport of guests to a hotel for the purpose of social entertainment, for the want of a better word. There is another case similiar to this which escapes my memory at this moment in time. The case is based on the 1981 PSV act and the 1985 TP act rather than the 1976 LGMPA act but the instance is exactly the same in law and the conclusion by the bench is exactly the same as the many other hire and reward cases which have been dealt with by the higher courts.

ROUT v SWALLOW HOTELS LTD

QUEEN'S BENCH DIVISION

[1993] RTR 80, 157 JP 771, [1993] Crim LR 77

HEARING-DATES: 7 July 1992

7 July 1992

Public service vehicle -- 'Hire or reward' -- Hotel operating vehicles to ferry guests and friends -- No one making any payment or having any right to travel -- Vehicles operating at discretion of hotel manager -- Whether carrying passengers for 'hire or reward' -- Whether public service vehicles -- Public Passenger Vehicles Act 1981 s 1(1)(5), 6(1), 12(1)(5), 22(1), 82(1) -- Transport Act 1985 ss 1(3), 139(3) Sch 1 para 4 Sch 8

HEADNOTE:
Section 1 of the Public Passenger Vehicles Act 1981 [as amended by section 139(3) of, and Schedule 8 to, the Transport Act 1985] provides:

'(1) Subject to the provisions of this section, in this Act "public service vehicle" means a motor vehicle . . . which -- (a) being a vehicle adapted to carry more than eight passengers, is used for carrying passengers for hire or reward . . . (5) For the purposes of this section . . . (a) a vehicle is to be treated as carrying passengers for hire or reward if payment is made for, or for matters which include, the carrying of passengers, irrespective of the person to whom the payment is made . . . -- (b) a payment made for the carrying of a passenger shall be treated as a fare notwithstanding that it is made in consideration of other matters in addition to the journey and irrespective of the person by or to whom it is made; (c) a payment shall be treated as made for the carrying of a passenger if made in consideration of a person's being given a right to be carried, whether for one or more journeys and whether or not the right is exercised . . .'

Section 6 provides:

'(1) A public service vehicle adapted to carry more than eight passengers shall not be used on a road unless -- (a) a certifying officer has issued a certificate (in this Act referred to as a "certificate of initial fitness") that the prescribed conditions as to fitness are fulfilled in respect of the vehicle; or (b) a certificate under section 10 of this Act has been issued in respect of the vehicle; or (c) there has been issued in respect of the vehicle a certificate . . . of a kind which by virtue of regulations is to be treated as the equivalent of a certificate of initial fitness. (2) . . . if a vehicle is used in contravention of subsection (1) above, the operator of the vehicle shall be liable on summary conviction to a fine . . .'

Section 12 [as amended by section 1(3) of, and paragraph 4 of Schedule 1 to, the Transport Act 1985] provides:

'(1) A public service vehicle shall not be used on a road for carrying passengers for hire or reward except under a PSV operator's licence granted in accordance with the following provisions of this Part of this Act . . . (5) . . . if a vehicle is used in contravention of subsection (1) above, the operator of the vehicle shall be liable on summary conviction to a fine . . .'

Section 22 provides:

'(1) A person -- (a) shall not drive a public service vehicle on a road unless he is licensed for the purpose under this section; and (b) shall not employ a person who is not so licensed for the purpose to drive a public service vehicle on a road . . .

(9) . . . a person who contravenes subsection (1)(a) or (b) above shall be liable on summary conviction to a fine . . .'

Section 82(1) provides:

'In this Act . . . "PSV operator's licence" means a PSV operator's licence granted under the provisions of Part II of this Act -- . . .'

The defendants were hotel proprietors and operated two vehicles, a 21-seater coach and an 11-seater minibus, for the conveyance of persons using the hotel and their friends. No one had a right to travel and no payment was made by anyone using the vehicles, and the hotel manager had a discretion as to whether the vehicles ran and their destinations. The defendants were charged with offences, inter alia, under sections 6, 12 and 22 of the Public Passenger Vehicles Act 1981. The justices held that, as passengers on the vehicles had no right to be carried, there was no carriage for hire or reward within the meaning of section 1 of the Act of 1981 and the vehicles were not public service vehicles, and they dismissed the informations.

On the prosecutor's appeal:

Held, allowing the appeal, that it was not necessary for the prosecution to establish a legally enforceable agreement and section 1(5)(c) of the Public Passenger Vehicles Act 1981 with its reference to 'right to be carried' did not define the only circumstances in which a vehicle was used for carrying passengers for hire or reward (p 88J); that the fact that some people travelled free was not relevant to the question of whether hotel guests were incidentally funding the provision of the service afforded by the vehicles however sporadic and discretionary its operation (p 88L-89A); that the service was provided in connection with the hotel's business and included in the payment by a guest of the price of a room or meal there must be taken to be an element in respect of the amenities of the hotel, one of which was the provision of the vehicles (p 89B-C); and that, accordingly, the defendants' vehicles were public service vehicles and the case should be remitted to the justices (p 89D).

Albert v Motor Insurers' Bureau [1972] RTR 230, HL(E) and Director of Public Prosecutions v Sikondar [1992] RTR 90, DC applied.

CASES-REF-TO:

Coward v Motor Insurers' Bureau [1963] 1 QB 259; [1962] 2 WLR 663; [1962] 1 All ER 531, CA
Motor Insurers' Bureau v Meanen [1972] 2 All ER 1372, HL(Sc)

INTRODUCTION:
Case stated by Inner London Justices sitting at Walton Street

1 On 19 November 1990 informations were preferred by the prosecutor, David Rout, a traffic examiner of the Metropolitan Traffic Area, against the defendants, Swallow Hotels Ltd, that they had committed the offences referred to in the attached schedule.

2 The justices heard the informations on 1 February 1991 and found the following facts. (a) On 7 June 1990 two vehicles owned by the defendants were being driven in Warwick Road, London W14. The vehicles were, firstly, a 21-seater coach, registration number E373 GPA driven by Christopher John Allen, an employee of the defendants, and, secondly, an 11-seater Minibus, registration number D395 UTN, driven by Noel Thomas Molloy, also an employee of the defendants. (b) There was not in existence, on 7 June 1990, a PSV driver's licence in respect of either driver. (c) There was not in existence, on 7 June 1990, a PSV operator's licence in respect of either vehicle. (d) There was not in existence, on 7 June 1990, a certificate as referred to under section 6(1) of the Public Passenger Vehicles Act 1981 in respect of either vehicle (no evidence having been adduced that such a certificate existed for either vehicle). (e) On 7 June 1990, the following applied to the vehicle D395 UTN (i) there was not carried on the vehicle readily available suitable and efficient apparatus for extinguishing fire; (ii) there was not carried on the vehicle a suitable receptacle containing first aid dressings and appliances; (iii) there was not marked on the vehicle the maximum seating capacity of the vehicle; (iv) there was no device provided by means of which the supply of fuel could be readily cut off; (v) the emergency exit was not clearly marked as such inside and outside the vehicle; (vi) the means of operation of the doors fitted to the emergency exit was not clearly indicated. (f)(i) The defendants operated the two vehicles at the sole discretion of the manager of their Swallow International Hotel, Cromwell Road, London, SW5 for various purposes including collection of customers from or return of them to points of arrival or departure and the conveyance of customers to and from places of entertainment including Earls Court and Olympia. (ii) If either vehicle was operating for the benefit of customers any person at the hotel whether resident or visitor and whether paying for a facility, eg, a meal or not together with any friend was free to travel on the vehicle subject to seating capacity but no one was given a right to travel and no payment was made by anyone travelling or anyone else in exchange for anyone being given a right to be carried. (iii) At times a conflict arose as to the destinations to which clients wished to go. In such cases the manager of the hotel exercised his discretion as to where a vehicle would go. This discretion extended to whether a vehicle would run at all regardless of whether any such conflict had arisen. (iv) No ticket was issued or required. No right to a return journey was created and if any person at the hotel wished to go or be collected from any destination the manager selected whether either vehicle performed any journey and if so which. No contractual arrangement for any passenger to be carried arose and if the manager decided not to operate a vehicle on any occasion or customers were for some other reason, eg, seating capacity, unable to travel in the hotel's vehicle no alternative transport was provided or paid for by the hotel. (v) There was no contract express or implied to which any passenger on either vehicle was a party on 7 June 1990 giving such passenger a right to be carried and there was no evidence of any such right having arisen in respect of any person which they had not exercised. (vi) Even though the passengers were about to be or were or had already been resident at the hotel no part of any payment made by them or on their behalf by another person, firm or company included their being given any right to be carried on either vehicle.

3 It was contended by the prosecutor that: section 1(5)(a) of the Public Passenger Vehicles Act 1981 caught a situation where payments were made to the proprietors of an hotel for certain purposes, usually the facility of staying at the hotel, but included being carried in a vehicle. Under Albert v Motor Insurers' Bureau [1972] RTR 230 it was necessary for the vehicles to be regarded as being used for the carrying of passengers for hire or reward that the provision of the vehicles went beyond a social kindness such as to become of a predominantly business nature. There did not need to be a binding legal contract for a separate transaction, ie, for being carried in the vehicle.

4 It was contended by the defendants: (i) for the vehicle to be used for carrying passengers for hire or reward it was necessary for payments to be specifically made for matters, including the carrying of passengers, such payments giving a right to be carried; for the vehicle to be a public service vehicle it was necessary for there to be a contractual obligation; the use of the words in the Act of 1981 'a right to be carried' were only consistent with the creation of a legal obligation pursuant to which the provider of transport must carry the passenger if the passenger chose to exercise the right to be carried; (ii) as to whether that approach was consistent with Albert v Motor Insurers' Bureau, there was a previous case namely, Coward v Motor Insurers' Bureau [1963] 1 QB 259, which had been differently decided, and it was discernible from the judgments that there might be a divergence of approach in interpretation of the expression 'hire or reward' according to whether the case involved insurance or, alternatively, operator's licensing; neither of those two decided cases turned on whether or not the vehicle was a public service vehicle;' both cases involved the legal requirement to include passenger liability in compulsory third-party insurance and in neither case was it necessary to decide whether a 'right to be carried' was created by the arrangement entered into merely whether the actual carriage of the passenger was for 'hire or reward;' (iii) a strict contractual obligation needed to exist for the course of conduct complained of to be caught by those provisions.

5 The justices were referred to the following cases:

Albert v Motor Insurers' Bureau [1972] RTR 230, HL(E)

Coward v Motor insurers' Bureau [1963] 1 QB 259, CA.

6 The justices were of opinion that: (i) for a vehicle to be used for carrying passengers for hire or reward it was not enough that the use of the vehicle had become predominantly of a business nature; it was necessary for there to be a binding legal contract for the carrying of passengers; on the facts as found by the justices there was no such binding contract; no client of the hotel had any right to be carried at any time; (ii) in all the circumstances the justices concluded that the vehicles were not being used for carrying passengers for hire or reward; passengers had no right to be carried and no payment had been made in consideration of such a right; (iii) therefore the vehicles were not public service vehicles and it was a necessary consequence of that finding that all the informations should be dismissed.

Accordingly, the justices dismissed the informations.

The prosecutor appealed.

The questions for the opinion of the court were: (i) whether on the facts as found the justices were right in concluding that the vehicles referred to were not used as public service vehicles, ie, were not used for carrying passengers for hire or reward; (ii) for the purpose of determining whether a vehicle was or was not a public service vehicle by virtue of being used for carrying passengers for hire or reward: (a) were the justices right in concluding that the provisions of the Public Passenger Vehicles Act 1981 required that there should be a payment made giving a person a right to be carried, whether or not the right was exercised, such as to bring into existence a binding legal contract? Or, (b) alternatively, did the provisions of the Public Passenger Vehicles Act 1981 merely require that payment should be made, without more, for matters which included the carrying of passengers?

SCHEDULE

1 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully employ Noel Molloy to drive a public service vehicle, index number D395 UTN, on a road when he was not licensed for the purpose, contrary to section 22(1)(b) of the Public Passenger Vehicles Act 1981.

2 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully employ Christopher Allen to drive a public service vehicle, index number E373 GPA, on a road when he was not licensed for the purpose, contrary to section 22(1)(b) of the Public Passenger Vehicles Act 1981.

3 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully use vehicle, index number D395 UTN, when there was not carried thereon in such a position as to be readily available for use suitable and efficient apparatus for extinguishing fire, contrary to regulation 35(1)(2) of the Public Service Vehicles (Conditions of Fitness, Equipment, Use and Certification) Regulations 1981 (SI 1981 No 257) (as amended by the Public Passenger Vehicles (Conditions of Fitness, Equipment, Use and Certification) (Amendment) Regulations 1989 (SI 1989 No 2359), and section 67 of the Public Passenger Vehicles Act 1981.

4 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully use vehicle, index number D395 UTN when there was not carried thereon a suitable receptacle containing first aid dressings and appliances, as specified, contrary to regulation 36 of the Public Service Vehicles (Conditions of Fitness, Equipment, Use and Certification) Regulations 1981, and section 67 of the Public Passenger Vehicles Act 1981.

5 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully use on a road vehicle, index number D395 UTN, as a public service vehicle otherwise than under a public service vehicle operator's licence, contrary to section 12(1) of the Public Passenger Vehicles Act 1981, as amended by section 1(3) of, and Schedule 1 to, the Transport Act 1985.

6 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully use on a road vehicle, index number E373 GPA, as a public service vehicle otherwise than under a PSV operator's licence, contrary to section 12(1) of the Public Passenger Vehicles Act 1981, as amended.

7 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully use public service vehicle, index number D395 UTN, on a road when such a certificate as is referred to in section 6(1) of the Public Passenger Vehicles Act 1981 had not been issued in respect of the vehicle, contrary to section 6(2) of the Act of 1981.

8 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully use public service vehicle, index number E373 GPA, on a road when such a certificate as is referred to in section 6(1) of the Public Passenger Vehicles Act 1981 had not been issued in respect of the vehicle, contrary to section 6(2) of the Act.

9 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully use on a road public service vehicle, index number D395 UTN, when there was not marked on the inside of the vehicle with letters not less than 25mm in height and in a colour contrasting with the colour of their background and which may be read from inside or outside the vehicle the maximum seating capacity of the vehicle as specified in regulation 4 of the Public Service Vehicles (Carrying Capacity) Regulations 1984 (SI 1984 No 1406), contrary to regulation 8(a)(i) of the Regulations of 1984.

10 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully use public service vehicle, index number D395 UTN, on a road when there was no device provided as prescribed by means of which the supply of fuel could be readily cut off, contrary to regulation 13(1)(d) of the Public Service Vehicles (Conditions of Fitness, Equipment, Use and Certification) Regulations 1981.

11 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully use public service vehicle D395 UTN on a road when the emergency exit was not clearly marked as such inside and outside the vehicle, contrary to regulation 24(1)(a)(i) of the Public Service Vehicles (Conditions of Fitness, Equipment, Use and Certification) Regulations 1981 and section 40(5) of the Road Traffic Act 1972 as amended.

12 On 7 June 1990 at Warwick Road, London W14, the defendants did unlawfully use public service vehicle, index number D395 UTN, on a road when the means of operation of the doors fitted to the emergency exit was not clearly indicated, contrary to section 24(1)(b) of the Public Service Vehicles (Conditions of Fitness, Equipment, Use and Certification) Regulations 1981.

COUNSEL:
David Pannick QC for the prosecutor; Mark Laprell for the defendants.

PANEL: LEGGATT LJ, PILL J

JUDGMENTBY-1: LEGGATT LJ

JUDGMENT-1:
LEGGATT LJ: The issue on this appeal is whether coaches provided by a hotel for the benefit of its customers were used for carrying passengers for hire or reward so as to render them public service vehicles for the purposes of the Public Passenger Vehicles Act 1981. When Parliament legislates by reference to a phrase such as 'hire or reward',the task of the court in applying the provisions of the resultant enactment is not always easy. The defendants, Swallow Hotels Ltd, owned a 21-seater coach and an 11-seater Minibus. On 21 June 1990 these two vehicles were driven by two of their employees in Warwick Road, West London. The prosecutor, David Rout, a traffic examiner of the Metropolitan Area, laid informations alleging that the defendants had thereby committed a number of offences, all of which depended on the vehicles in question being public service vehicles.

On 1 February 1991 the justices found that neither did the driver have a public service vehicle driver's licence nor did either of the vehicles have a PSV operator's licence or a certificate of initial fitness required for use as a public service vehicle. They also found that the Minibus had a number of deficiencies which would have rendered the defendants guilty of the offences charged in the remaining informations if the Minibus was a public service vehicle, but, since they concluded that neither vehicle was a public service vehicle, they dismissed all the informations. Against that decision the prosecutor appeals by way of case stated.

Section 1 of the Act of 1981 defines the term 'public service vehicle.'

Section 1(1), so far as material, provides:

'Subject to the provisions of this section, in this Act "public service vehicle" means a motor vehicle (other than a tramcar) which -- (a) being a vehicle adapted to carry more than eight passengers, is used for carrying passengers for hire or re- ward . . .'

Section 1(5), so far as material and as amended, provides:

'For the purposes of this section and Schedule 1 to this Act -- (a) a vehicle is to be treated as carrying passengers for hire or reward if payment is made for, or for matters which include, the carrying of passengers, irrespective of the person to whom the payment is made . . . (b) a payment made for the carrying of a passenger shall be treated as a fare notwithstanding that it is made in consideration of other matters in addition to the journey and irrespective of the person by or to whom it is made; (c) a payment shall be treated as made for the carrying of a passenger if made in consideration of a person's being given a right to be carried, whether for one or more journeys and whether or not the right is exercised . . .'

The case relied on by the prosecutor in the magistrates' court, as it has been in this court by Mr Pannick on his behalf, was Albert v Motor Insurers' Bureau [1972] RTR 230. That was a case concerned with the term 'hire or reward' as used in third-party insurance. The driver carried fellow workers to and from work. There was a regular and understood arrangement that the driver should be rewarded by them in money or in kind. The driver was liable for the death of a passenger. Judgment against the driver remained unsatisfied, and the question was whether he had been required to insure against a liability to passengers so as to render the Motor Insurers' Bureau, in their turn, liable. That depended on whether the passenger was being carried in a vehicle in which passengers are carried for hire or reward.

The relevant statutory provisions made it unlawful to use a motor vehicle unless there was in force in relation to the user of it by the person concerned such a policy of insurance in respect of third-party risks as complied with the requirements of the Act, and section 203 of the Road Traffic Act 1960, having dispensed with the requirement that a passenger should be insured in that fashion, restored the requirements for insurance by subsection (4) when providing that there should be an exception in favour of insurance in the case of a vehicle in which passengers are carried for hire or reward, or by reason or in pursuance of a contract of employment.

As appears from the headnote of the case in [1972] AC 301, which is accurate, the House of Lords by a majority concluded that the phrase 'a vehicle in which passengers are carried for hire or reward' meant a vehicle used for the systematic carrying of passengers for reward, not necessarily on a contractual basis, going beyond the bounds of mere social kindness and amounting to a business activity, and that, on the facts found by the judge, the vehicle had been so used.

In the course of their speeches their Lordships considered earlier cases, including Coward v Motor Insurers' Bureau [1963] 1 QB 259. The ratio of that case was that the words 'hire or reward' in a context such as the House was concerned with connoted a monetary reward legally recoverable under a contract express or implied. That conclusion had been criticized by Lord Denning in a subsequent case, and in Albert's case [1972] RTR 230 Lord Donovan, delivering the leading speech said, at p 238H:

'The test which I favour, namely: has there been a systematic carrying of passengers for reward which goes beyond the bounds of mere social kindness? -- which I may call for short the "business test" -- is in line I think with the reasoning of the judges of the First Division in Meanen, 1971 SLT 264 . . . and with Lord Denning MR's view in Connell [1969] 2 QB 494, 503-504 that the existence of a binding contract is too narrow a test. Of course, if the "business test" is applied one will normally find a contract. But not necessarily so.'

Lord Donovan explained the reasoning behind the legislative structure to which I have alluded, saying, at p 237E:

'The reasoning . . . would seem to be this: passengers, like the driver himself, can properly be left to look after themselves. After all, if the passenger elects to go by private transport he will usually know the driver, often have some idea as to the condition of the vehicle, and if he thinks that either presents a risk he need not run it. There is, therefore, no justification for imposing the additional burden on all private car owners to insure all potential passengers. But where public transport is concerned the position is different. The passenger must almost invariably take the vehicle and the driver as he finds them, and the same is true of the private hire vehicle if it is chauffeur driven: in these cases it is eminently reasonable that the operator of such vehicles should insure passengers, and this obligation is now expressed by the proviso.'

That is the proviso to section 203(4) of the Act of 1960 to which I have referred. I interpolate the comment that it would seem equally reasonable that the operation of such vehicles should be attended by the safeguards imposed by the Act of 1981 and the regulations made under it.

In the course of his speech Lord Donovan underlined the significance of what he termed the 'business test' as being an indication of whether the relevant service was rendered for hire or reward. I can pass by the dissenting speech of Viscount Dilhorne save for a reference to a passage in which he said, at p 243F:

'In my opinion, whether a passenger is carried for hire or reward within section 203(4) is a question of fact, the answer to which does not depend on whether there is a legally binding contract.'

Lord Pearson, who, with Lord Donovan, was another in the majority of their Lordships in Albert v Motor Insurers' Bureau [1972] RTR 230, referred to Coward v Motor Insurers' Bureau [1963] 1 QB 259 and remarked, at p 249A:

'If insurance against liability in respect of passengers was only required in the case of a vehicle in which passengers were carried under legally binding contracts of carriage, the enactment should have said so.'

He too emphasized the need for inquiry in the context of hire or reward, whether the relevant service was being rendered as a business activity. The justices in the present case acceded to the defendants' argument that carriage for reward required a binding legal contract for that purpose but held that, because there was no right to be carried, there was no carriage for reward and accordingly the vehicles in question were not public service vehicles. On the face of it, that is a surprising result since the expression 'public service vehicle' suggests a vehicle which serves the public, and those who use coaches, such as those provided by the hotel in this case, are four square within the class of passengers who might be expected to need the protection of the Act of 1981.

To see how the justices came by that conclusion, it is helpful to read, paragraph 2(f) of the case stated, omitting only the subsidiary numerals:

'The [defendants] operated the two vehicles at the sole discretion of the manager of their Swallow International Hotel, Cromwell Road, London, SW5, for various purposes including collection of customers from or return of them to points of arrival or departure and the conveyance of customers to and from places of entertainment including Earls Court and Olympia. If either vehicle was operating for the benefit of customers any person at the hotel whether resident or visitor and whether paying for a facility, eg, a meal or together with any friend was free to travel on the vehicle subject to seating capacity but no one was given a right to travel and no payment was made by anyone travelling or anyone else in exchange for anyone being given a right to be carried. At times a conflict arose as to the destinations to which clients wished to go. In such cases the manager of the hotel exercised his discretion as to where a vehicle would go. This discretion extended to whether a vehicle would run at all regardless of whether any such conflict had arisen. No ticket was issued or required. No right to a return journey was created and if any persons at the hotel wished to go or be collected from any destination the manager selected whether either vehicle performed any journey and if so which. No contractual arrangement for any passenger to be carried arose and if the manager decided not to operate a vehicle on any occasion or customers were for some other reason, eg, seating capacity, unable to travel in the hotel's vehicle no alternative transport was provided or paid for by the hotel. There was no contract express or implied to which any passenger on either vehicle was a party on 7 June 1990 giving such passenger a right to be carried and there was no evidence of any such right having arisen in respect of any person which they had not exercised. The justices found that even though the passengers were about to be or were or had already been resident at the hotel no part of any payment made by them or on their behalf by any other person, firm or company included their being given any right to be carried on either vehicle.'

The essence of the defendants' argument in the magistrates' court was that there could not be carriage for reward unless payment was made specifically for the right to be carried. It was submitted that there may be a divergence of approach according to whether a case is concerned with insurance or licensing. A distinction was sought to be drawn between what is termed a mere decision, whether the actual carriage of a passenger was for hire or reward, and a decision whether a right to be carried was created by the arrangement entered into.

Neither in principle nor in authority can I descry any warrant for that suggested distinction. The court in Albert v Motor Insurers' Bureau [1972] RTR 230 referred to the definition of 'public service vehicle' without suggesting that different considerations apply according to whether it was the operation of the vehicle or the insurance of it that was in question.

The reference in the case stated to 'a right to be carried' was presumably prompted by section 1(5)(c) of the Act of 1981, but that is not an exhaustive definition of a payment made for the carrying of a passenger. It has been enacted for the evident purpose of including within the scope of the carrying of a passenger, which might have been thought to be confined to actual carriage, the giving of a right to be carried. Similarly, by force of section 1(5)(a), a vehicle is to be treated as carrying passengers for hire or reward if payment is made for that purpose irrespective of the recipient.

Since the hearing in the magistrates' court, Director of Public Prosecutions v Sikondar [1993] RTR 90 has been decided by this court. We have a transcript of the judgment of the court which was delivered by Watkins LJ.

The defendant had what was referred to as a 'large extended family', and to take his own children to school and those of other friends and relations he used a particular vehicle. Such payments as were made to him were not demanded by him, but those who took advantage of lifts offered by him to their respective children from time to time gave him money towards the cost of petrol. Those payments were made, when they were made, at irregular times and places.

On such occasions as the defendant's own daughters were ill and unable to go to school, he refrained from making the journey, leaving the other children who would normally travel with him to fend for themselves. In those circumstances after considering Albert v Motor Insurers' Bureau [1972] RTR 230, Watkins LJ cited a brief passage from Motor Insurers' Bureau v Meanen [1971] 2 All ER 1372, 1374 where Lord Donovan, who in that case also gave the leading speech, said at p 96F-G:

'The long standing and regular arrangement for the carriage of passengers; the use of a minibus fitted with seats for 11 passengers; the arrangement (albeit informal) among the regular passengers to pay for the cost of the petrol; these features add up to and justify the conclusion that McKale was engaged part-time in carrying passengers under an arrangement which went beyond mere social kindness. It has the flavour of business about it.'

In Director of Public Prosecutions v Sikondar [1993] RTR 90, 96K-L the court said:

'What, in our judgment, is clear is that [section 1(5)(c) of the Act of 1981] is not to be taken as defining the only circumstances in which a vehicle is used for carrying passengers for hire or reward. In our judgment, the construction of "hire or reward" in Albert v Motor Insurers' Bureau [1972] RTR 230 and Motor Insurers' Bureau v Meanen [1972] 2 All ER 1372 is to be applied to that expression in section 1 of the Public Passenger Vehicles Act 1981, so that it was not necessary in this case for the prosecution to establish a legally enforceable agreement.'

It followed that in the judgment of the court the justices had wrongly placed in the forefront of their reasons the fact that they were not satisfied that payment to the defendant was made in consideration of a right to be carried, a phrase which, to indicate the importance they attached to it, they had underlined.

That case, in which the court concluded that the vehicle concerned was a public service vehicle, is binding on us unless we are satisfied that it is clearly wrong, and I am not so satisfied. On the contrary, in my judgment it is clearly right. That case was not available to the justices because it had not then been decided. It establishes that the principle of Albert v Motor Insurers' Bureau [1972] RTR 230 applies as much to cases like the present as to insurance cases; that in such cases it is not necessary for the prosecution to establish a legally enforceable agreement, and that section 1(5)(c) with its reference to 'right to be carried' does not define the only circumstances in which a vehicle is used for carrying passengers for hire or reward. Had the justices had the benefit of that precedent, it seems unlikely that they would have reached the conclusion which they did.

In this court in a sustained and powerful argument Mr Laprell submitted that there has to be a clear connection, if the definition of 'public service vehicle' in section 1 of the Act of 1981 is to be satisfied, between payment and carriage, and that such a connection is absent here. He submits that the connection is made tenuous by the fact that there were some people, as is apparent from the justices' findings of fact who were allowed to travel without any payment direct or indirect, such as friends of guests. But it does not seem to me that the fact that some people travelled free is relevant to the question whether guests at the hotel are indeed incidentally funding the provision of the service afforded by the coaches, however sporadic and discretionary is its operation.

Mr Laprell does not argue that the absence of a payment specifically for the right to be carried means that the carrying is not for hire or reward, but he does say that it is a factor of which account should be taken in making the assessment whether the carrying of passengers was for hire or reward.

In my judgment the service is provided in connection with the hotel's business. The relevance of that is that included in the payment by a guest of the price of a room or a meal there must be taken to be an element in respect of the amenities of the hotel, one of which is the provision of the vehicles. The hotel charges through the price of rooms and meals for all those amenities which it offers, whether or not individual guests avail themselves of any particular amenity or are even aware of it. The vehicles are provided by the hotel as one such amenity, and as part of the business of running the hotel, the remuneration or reward for which is included in the payments made by the guests. That conclusion itself confirms the irrelevance of the fact that some passengers are carried free.

I have no hesitation in concluding that the vehicles used by the defendants were public service vehicles, that the justices' decision is wrong, and that the case should be remitted to them. For my part, I would have made a direction to convict on all the informations, since it is plain that the justices only acquitted the defendants on the mistaken ground that the vehicles concerned were not public service vehicles. But we are told, not only that an assurance may have been given that no application would be made to this court on the prosecutor's behalf for a direction to that effect, but also that, as a precautionary measure, in the meanwhile the defendants have applied for and obtained the public service vehicle licences necessary for the running of the two vehicles concerned as public service vehicles.

In those circumstances I would refrain from making the direction to convict that I would otherwise have made. But I would emphasise that in remitting the matter to the justices the matter will in the circumstances remain at large, for them, in the light of such guidance as may have been afforded by this judgment.

I would answer the questions in the case stated as follows. Question (i):

'Whether on the facts as found the justices were right in concluding that the vehicles referred to were not used as public service vehicles, ie, were not used for carrying passengers for hire or reward.'

To that I would answer 'no'.

'(ii) For the purpose of determining whether a vehicle was or was not a public service vehicle by virtue of being used for carrying passengers for hire or reward

(a) were the justices right in concluding that the provisions of the Public Passenger Vehicles Act 1981 require that there should be a payment made giving a person a right to be carried, whether or not the right is exercised, such as to bring into existence a binding legal contract . . .'

To that question I would also answer 'no'. There remains question (ii)(b), which reads:

'(b) alternatively do the provisions of the Public Passenger Vehicles Act 1981 merely require that payment should be made, without more, for matters which include the carrying of passengers?'

Despite the assistance of counsel, I do not understand the question, but in the light of the answers that I would give to the earlier questions it does not appear to me to be necessary to answer it, other than as may have occurred in the body of this judgment.

JUDGMENTBY-2: PILL J

JUDGMENT-2:
PILL J: I agree.

DISPOSITION:
Appeal allowed with costs. Justices' questions answered accordingly. Case remitted to the justices for reconsideration

SOLICITORS:
Treasury Solicitor; JA Backhouse & Sons, Blackburn


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PostPosted: Tue May 02, 2006 11:40 am 
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Many thanks JD

regards

Captain Cab

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PostPosted: Tue May 02, 2006 12:13 pm 
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All the recent cases I have posted regarding what constitutes hire and reward have one overriding factor, that is they all relate to the case of ALBERT v. MOTOR INSURERS' BUREAU. This particular case started in the Queens bench division on 20th June 1969 and ended in the House of Lords some two years later in 1971. The case is long so I won't post it but I will make it available in pdf format should anyone wish to read it? The case concerned one party suing another namely Albert v Motor insurers bureau.

The Plaintiff's husband was killed while travelling as a passenger in a car driven negligently. The Plaintiff obtained judgment for damages and costs against the driver but the judgment remained unsatisfied. The Plaintiff brought an action against the Motor Insurers' Bureau, claiming that under their agreement with the Minister of Transport they were liable to satisfy the judgment, in that at the time of the accident the deceased was being carried "for hire or reward" within the proviso to Sect. 203 of the Road Traffic Act, 1960, and that, accordingly, insurance was compulsory under that Act. The Bureau denied liability.

The resulting ruling of the Lords has laid down the foundation of what constitutes hire and reward and if anyone is going to pursue litigation on such matters then it is advisable to read this particular case.

The bottom line is that hire and reward encompasses many scenarios but none more so than when it applies to the running of a business and offering a free service which may be of benefit to that business? Anyone in the hire and reward business who thinks they do not need a license when transporting members of the public whether it be limousines, pink ladies or whatever are grossly mistaken. The exceptions to this are those businesses exemptions laid down in the statute that covers Weddings etc, etc. All these exemptions can be found on TDO in the licensing section.

Another thing that is worth noting and that is the close relationship between these cases and those of plying for hire. Both types of offences centre on not being licensed for the activity undertaken. The only difference is that plying for hire also has an added element of making oneself available for hire either before or at the time of hire? Everything else regarding not having the appropriate license is identical. One further point is that in many of these cases you will notice that the decision of the lower courts was overturned on appeal to the higher court. It is also worth noting that in every case the higher court has been consistent in their ruling. This is borne out in both types of offences of illegally plying for hire and those cases amounting to hire and reward without a license? What we can now determine is that the higher courts have consistently established a clear understanding of the ingredients required when committing both offences.

Regards

JD


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