Taxi Driver Online

JAMES McCOURT v ROSEMARY MONCRIEFF or McCOURT

Inner House: Second Division

(1984) Inner House Cases 10

16 February 1984

HEADNOTE: Contract - construction - implied term - agreement to renounce claim to taxi - alleged implied agreement to transfer taxi cab operator's licence on demand.

Trusts - constitution - alleged agreement to hold taxi cab operator's licence on trust - evidence.

Damages - measure of damages - breach of contract - failure to transfer taxi cab operator's licence - licence personal and non-transferable - value of licence as measure of damage.

CASES-REF-TO: No cases cited.

COUNSEL: Counsel Act: Nimmo Smith QC et Macaulay
Mackay & Norwell (for Hughes Dowdall & Co

PANEL:
Lord Justice-Clerk (Wheatley), Lord Hunter, Lord Dunpark

JUDGMENTS: LORD HUNTER: This action, which is the subject of the present Appeal to the Court of Session, has had a somewhat chequered history. The written pleadings have at various stages been the subject of amendment and, despite a considerable wealth of pleas-in-law, are still unsatisfactory. The arguments presented on either side, as the case has proceeded from court to court, do not appear to have been entirely consistent. The proof, which was before answer on the preliminary pleas of the parties, was relatively brief. Counsel for the defender and appellant referred us only to the evidence-in-chief of the pursuer and his two supporting witnesses, and stated that he was not relying to any extent on the evidence of the defender and her supporting witnesses, who had been disbelieved by the Sheriff before whom the proof proceeded. Counsel for the defender and appellant, presumably for the same reason, did not attempt to renew the defence that the defender was induced by force and fear to sign a document No 7/3 of Process, to which reference will be made later in this Opinion. Indeed the appeal before this Court was argued on both sides on a very narrow front, and much of what appears to have been submitted to the Sheriff Principal was not discussed before us.

The substance of the case, on fact, which the pursuer set out to prove is set forth in Articles 3 to 5 inclusive of the Condescendence. The pursuer offered to prove that about October 1972, having formerly owned a taxi which he had sold, he purchased another licensed taxi cab number HGB 822D "and right to Cab Operator's Licence No 15 (the latter entitling the holder to use the vehicle as a taxi in Glasgow)" at a price of 3200 pounds sterling. The pursuer avers that he decided to do this with the help and encouragement of the defender, who was at that time his wife. As appears from the Findings in Fact made by the Sheriff the pursuer and defender separated in July 1975 and were subsequently divorced. The nature and terms of the alleged agreement with the defender on which the pursuer founds his claim of damages for breach of contract are summarised in the following averments in Article 2 of the Condescendence at page 5B-E of the Closed Record, as amended:

"In view of the possibility that Glasgow Magistrates might not transfer said licence to pursuer because he had previously owned a licenced taxi and had sold it, their policy being both to discourage trafficking in licences and to restrict the number of issued licences to a constant number, the parties verbally agreed at their home at the time of purchase that the transfer of said Cab-Operator's Licence for the newly purchased taxi would be applied for in name of defender and be held by her on behalf of the pursuer and that she would authorise and allow him to operate a cab under said licence for his own benefit. It was an implied term of the said agreement that the defender would on demand take all steps necessary to allow the said licence to be transferred to the pursuer, should the pursuer wish it to be transferred."

The pursuer further avers that in order to get the Cab-Operator's Licence in the defender's name it was necessary for him to procure that the said taxi, that is presumably HGB 822D, should be registered for Road Fund purposes in the defender's name, and that the Insurance Policy for the taxi should also be taken in her name. The course of events that followed, according to the pursuer's averments, was that the Cab-Operator's Licence was "in consequence of said agreement" and the pursuer's actings in reliance thereon "transferred" to the defender in November 1972 from its previous owner and granted to the defender in respect of the said vehicle. Thereafter, in March 1973 the pursuer purchased a new taxi cab HGG 563L to replace "the taxi cab bought in the previous October", again presumably HGB 822D. According to the pursuer's further averments, the defender again applied for and was granted "the Cab-Operator's Licence No 15" in respect of the new taxi HGG 563L and did so on the basis that she would hold it "in terms of the agreement previously condescended on, that is, the agreement said to have been entered into between the pursuer and the defender at the time of the purchase of HGB 822D. This part of the pursuer's case on Record concludes with the following averment:

"Accordingly, from October 1972 defender held the said two taxi cabs and Cab-Operator's Licence No 15 on behalf of the pursuer in accordance with the said agreement".

Once more the agreement referred to is the agreement alleged to have been entered into between the pursuer and defender when HGB 822D was purchased. It is clear, therefore, that the pursuer's case on Record is based on a verbal agreement, said to have been reached between him and the defender at their home in about October 1972 and to have incorporated "an implied term" that the defender would "on demand" take all steps necessary to allow "the said licence", that is, the Cab-Operator's Licence for the newly purchased taxi HGB 822D, to be transferred to the pursuer, should the pursuer wish it to be transferred.

It is unnecessary to follow the pursuer's written pleadings further, since the two further matters of importance, namely a Cab-Operator's Licence (No 7/4 of Process) granted to the defender under date 21st April 1975 and expiring on 20th April 1976 in respect of the vehicle numbered HGG 563L and a document signed by the defender in July 1975 (No 7/3 of Process) at the time when the parties separated, were spoken to in evidence and treated on both sides of the bar as sufficiently proved. It may be observed that the Cab-Operator's Licence No 7/4 of Process contains no reference to a "Number 15". This number was referred to by the pursuer in evidence without much further explanation as "the licence number", whereas the Cab-Operator's Licence No 7/4 of Process bears to be numbered "3138". The document signed by the defender at the time of the separation was in the following terms:

"I, Rosemary McCourt lay no claim to taxi H Carriage No 15 which was paid in full by my husband." It was suggested, in the course of the discussion, that "No 15" was the number on the plate affixed to the taxi cab, but, in the absence of any clear evidence to that effect, this must be largely a matter of conjecture. It may be that the matter is not of great importance. What is important, in my opinion, is that the document No 7/3 of Process is the only writ of the defender upon which counsel for the pursuer and respondent relied.

In order to clarify the issues which have to be decided in the present appeal it is convenient to refer at this stage to certain provisions of the Glasgow Corporation Consolidation (General Powers) Order Confirmation Act 1960, from which the nature, characteristics and duration of a Cab-Operators' Licence granted by a Magistrates Committee of the local authority in question are derived. A Cab-Operator's Licence is a licence in respect of a cab granted under Section 41 of the Act, and, as appears from subsection (1) of the said Section, is personal to the grantee, who must be thought fit by the magistrates committee. A Cab-Operator's Licence is separate and distinct from a Cab-Driver's Licence granted under Section 42 of the Act, which by subsection (3) provides that the holder of a Cab-Operator's Licence shall not cause or permit any person to drive the vehicle to which the licence relates as a cab unless that person is the holder of a Cab-Driver's Licence. It was assumed by counsel for the parties that the pursuer had throughout been the holder of a Cab-Driver's Licence and was for a period authorised by the defender to drive taxi-cab HGB 822D and subsequently taxi-cab HGG 563L until 11th February 1977 when, as was held by the Sheriff, she withdrew that authority.

With regard to the duration of such licences Section 88 of the Act of 1960 provides as follows:

"88. Save as otherwise expressly provided in this Order every licence shall unless sooner revoked or suspended continue in force for such period not exceeding one year as the magistrates committee may determine and as may be specified in the licence". It was not suggested in argument before us that any of the Cab-Operator's Licence granted by the magistrates committee to the defender were affected by the saving provision at the outset of Section 88. We were not referred by counsel to any provision under which a transfer of an existing Cab-Operator's Licence from one person to another can competently be effected. It appears that there is no such provision, although provision is made inter alia for refusal, revocation or suspension of such licences. In the foregoing circumstances the pursuer's averments in Article 3 of the Condescendence at page 5D-E of the Closed Record would appear to be misconceived, unless the word "transferred" is interpreted in a non-technical sense and as having a considerably wider meaning than the word would normally bear. The comment may be made that this is not a very promising start in an attempt to establish the existence of a contract said by the pursuer to have contained an implied term which, on any view, was indefinite in respect of future duration and somewhat unusual in its terms. It may be added that at the time when the contract is said to have been entered into between them the parties were man and wife. In the end of the day counsel for the pursuer and respondent did not suggest that the defender had a continuing obligation under the alleged agreement to renew the Cab-Operator's Licence for the pursuer's benefit. Counsel's eventual submission was that, if the defender did renew the licence, the renewed licence was to be held by her for the pursuer's benefit and that she was bound to continue after each such renewal to authorise the pursuer to drive the vehicle as a cab. This contention is, in my opinion, very far removed from the case made upon averment, namely that the defender was by verbal agreement under an obligation to authorise and allow the pursuer to operate a cab under the Cab-Operator's Licence for the newly purchased taxi HGB 822D for his benefit, and that it was an implied term of the agreement that the defender would "on demand take all steps necessary to allow the said licence to be transferred to the pursuer, should the pursuer wish it to be transferred". The proof was before answer on the defenders' plea of relevancy and, had it been necessary, I would have been disposed to hold that the pursuer and respondent has no averments on Record relevant to support the case for which his counsel contended in the appeal to this Court.

However, I have reached the opinion that the pursuer and respondent has failed on other and wider grounds. I consider that it is necessary, when approaching the merits of the pursuer's claim for damages, to reach a conclusion as to the nature of the legal relationship which is alleged by the pursuer to have existed between himself and the defender. On his own showing the pursuer's action is based on an alleged promise to him by his wife, which was gratuitous. It may be added that the agreement on which the pursuer relies, particularly in relation to the continuing and indefinite obligations which are said to have arisen under an implied term and to have survived the parties' marriage, was not only innominate, but also unusual, anomalous and peculiar, bearing in mind amongst other factors, that a Cab-Operator's Licence is personal in its nature and of limited duration, and also incapable of transference in any legal sense of the term. In the end of the day counsel for the pursuer and respondent committed himself to the proposition that the legal relationship between the parties was one of trust and that, in consequence of an agreement reached between the parties in July 1972, the defender held the original Cab-Operator's Licence granted to her for HGB 822D, and also presumably all the subsequent Cab-Operator's Licences granted to her, in trust for the pursuer. Judging from the pursuer's answers at the beginning of his cross-examination this also appears to have been the pursuer's contention, at any rate in relation to the original Cab-Operator's Licence. In these circumstances I am satisfied that the position is such that the law requires proof by the writ or oath of the defender. The only writ of the defender on which counsel for the respondent relied was the document No 7/3 of Process, to which reference has been made. In my opinion that writ is insufficient to prove the alleged contract on which the pursuer relies or to establish that the Cab-Operator's Licence granted or to be granted to the defender by the magistrates committee have been, or are, to be held by her in trust for the pursuer, assuming that a personal licence of this nature can competently be made the subject of such a trust. On the face of it the document No 7/3 of Process relates only to a vehicle, namely "taxi H Carriage No 15". Nothing is said in it relating expressly to a Cab-Operator's Licence. Moreover, all it says is that the defender lays no claim to the said vehicle and acknowledges that the price for the vehicle, which, having regard to the date July 1975, must be understood to refer to HGG 563L, had been paid in full by the pursuer.

According to the pursuer's evidence HGG 563L was purchased by him on or about 28th March 1973 at a total cost of 1449 pounds sterling. The mere fact that the defender was prepared to discharge any claim which she might have to the said vehicle and to acknowledge that the pursuer had paid the price for it in full does not, in my opinion, go any distance at all towards establishing the alleged contract relating to a Cab-Operator's Licence, or to a series of Cab-Operator's Licences, of the nature and with the effects averred by the pursuer on Record. Nor is the writ sufficient, in my opinion, to establish the existence of a trust affecting a Cab-Operator's Licence or a series of Cab-Operator's Licences granted to the defender by the magistrates committee. Even if it be assumed in favour of the pursuer that the existence of a trust has been established and that the purposes and conditions of the trust could be established by parole evidence, I am of opinion that the pursuer has not succeeded in proving the obligations said to be incumbent on the defender as trustee over an indefinite future period, namely, to "denude" in favour of the pursuer on his so demanding, as was contended at one stage of the argument for the pursuer and respondent, or, as counsel for the pursuer and respondent eventually argued, in the event that she renewed the Cab-Operator's Licence, to hold such renewed licence or renewed licences for the pursuer's benefit.

I may add that whether the obligations alleged to be incumbent upon the defender had their origin in contract, gratuitous promise or trust, I have found no evidence to support the existence of an implied term either in the form averred by the pursuer on Record or in the form eventually contended for by his counsel. The high water mark of the pursuer's evidence on the nature and terms of the original arrangement said to have been entered into between himself and the defender in about October 1972 is to be found in his evidence-in-chief at page 6B-C of the Note of Evidence. That passage runs as follows:

"I approached my wife and I said to my wife "Look, I will put the licence in your name because obviously we want to get the taxi and try to get on, to get another house. So, it will need to be your name" and she agreed to that quite willingly. Therefore it was transferred to her name".

Even taken in the context of the circumstances set forth in Finding in Fact (5) made by the Sheriff, this, in my opinion, falls far short of the agreement which the pursuer set out to prove as the basis for his claim for damages. Still less can I find in the pursuer's evidence any basis for the existence of the implied term which, upon averment, is the foundation of the claim by him for damages for breach of contract. Even assuming that the pursuer's own evidence would have been sufficient, if corroborated, to set up such a case, the necessary corroboration is, in my opinion, awanting.

I am accordingly of opinion that the pursuer's case has failed on the merits and that the defender is entitled to absolvitor. Moreover, on the view which I have taken both of the pursuer's case on Record and of the proof, the course taken by both the Sheriff and the Sheriff Principal on the question of damages is, in my opinion, ill-founded. By Joint Minute between the parties the value of a Hackney Carriage Licence within the City of Glasgow at or about 11th February 1977 was agreed at the sum of 8000 pounds sterling. The parties did not agree that this was the appropriate measure of damages in the event of it being held that there had been a breach of contract by the defender. Having regard to the nature and characteristics of a Cab-Operator's Licence under the Act of 1960, and in particular the facts that it is personal and non-transferable and limited in duration to not more than one year, I am unable to see that any loss and damage suffered by the pursuer could properly be measured in this way. On the assumption that the pursuer might have been able to state a claim on the basis of loss of profits, it is unnecessary to say more than that there is no evidence to support a claim so stated. I am of opinion that, in these circumstances, the pursuer's action has failed on the further ground that, even if he had succeeded in proving breach of contract, he would have failed to establish the loss and damage suffered by him.

In view of the conclusion reached on the merits and on damages it will be necessary to make substantial alterations to the Findings in Fact as well as to the Findings in Law. Counsel for the appellant submitted particular criticisms of Findings 7, 8, 9 and 10, and particularly sought deletion of the words "for his benefit" and "for his own benefit" in these findings. However, counsel indicated that he was bringing under challenge the whole findings made by the Sheriff, which had been left unaltered by the Sheriff Principal.

In the light of this Opinion, which I understand has the approval of your Lordships, it will be necessary to recall the interlocutors of the Sheriff and the Sheriff Principal dated respectively 12th and 25th March and 27th July 1982; to make of new findings in fact and in law; to repel the pleas in law for the pursuer; and to assoilzie the defender from the crave of the initial writ.

LORD JUSTICE-CLERK (WHEATLEY): I have had the opportunity of seeing in draft the Opinion of Lord Hunter in this case, and as I find myself in full agreement with it I content myself with a simple concurrence.

LORD DUNPARK: I have read the Opinion of Lord Hunter and I agree with all of it. The fundamental reason why I disagree with the findings and decisions of the Sheriff and with the decision of the Sheriff Principal is that I am unable to construe the document signed by the defender and appellant (No 7/3 of Process) as applying to both the vehicle and the cab operator's licence. I construe that document as a waiver of the appellant's claim to the vehicle only. It makes no reference to the licence. The literal construction is that she waived her claim to the vehicle which the respondent had purchased. The terms of the document were dictated unilaterally by the respondent and it falls to be construed contra proferentem. The implied term, which is the foundation of the respondent's case, that "the defender would on demand take all steps necessary to allow the said licence to be transferred to the pursuer, should the pursuer wish it to be transferred" has not, in my opinion, been proved to have been agreed between the parties at any time. The defender and appellant is, therefore, entitled to decree of absolvitor.

DISPOSITION: Appeal allowed.

SOLICITORS: Solicitors, Glasgow).

Alt: Galbraith QC et Anderson
Allan McDougall & Co (for Donaldson & Alexander,
Solicitors, Glasgow).