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[1911] 2 K.B. 32

[DIVISIONAL COURT]'

LONDON COUNTY COUNCIL v. FAIRBANK.

1911 April 3.

LORD ALVERSTONE L.J., BRAY and BANKES JJ.
Revenue - Licence - Hackney Carriage - What constitutes "keeping" a Carriage - Customs and Inland Revenue Act, 1869 (32 & 33 Vict. c. 14), s. 27.

By s. 27 of the Customs and Inland Revenue Act, 1869, "Every person who .... shall keep a greater number of carriages .... than he shall be authorised to .... keep by any licence or licences" granted to him under that Act shall be liable to a penalty:-

Held, that a cab proprietor who has in reserve in his yard a number of spare cabs ready for use and intended to be used if and when occasion requires does not "keep" them within the meaning of that section until he in fact begins to use them.

CASE stated by a metropolitan police magistrate.

The respondent was summoned on an information charging that he on June 1, 1910, at Amberley Wharves, in the borough of Paddington, did keep 104 carriages, being a greater number than he was authorized to keep by any licence or licences granted to him under the Customs and Inland Revenue Act, 1869, as amended by the Customs and Inland Revenue Act, 1888.

At the hearing of the information the following facts were proved or admitted:-

The respondent was a proprietor of cabs and a coachbuilder, and it was proved by extracts from the register of hackney carriage licences of the Metropolitan Police that he had 102 hackney carriages on June 1, 1910, and that he had in force on that date 102 plates (not counting duplicates which are occasionally issued to replace damaged plates) which had been issued to him from Scotland Yard. He owned and kept on his premises between January 1 and June 1 a number of cabs varying between 100 and 104. He had sold one or two during that period, but had 102 on June 1. The number actually used for hire each day varied according to the demand. The greatest number used for hire on any one day during the six months was ninety-four. His practice was to keep in the yard a certain quantity always in reserve ready to be drawn upon as occasion required. From seven to ten in addition to the ninety-four were kept on the premises during the said six months as part of the reserve, but were never in fact drawn upon. Eight were there on June 1. They had plates and the respondent held licences from the police in respect of them. They were ready and fit for use and were cleaned from time to time under the direction of the respondent's foreman, but were kept in a coach-house which held just ten and which was kept locked. The respondent's foreman had charge of them and had the custody of the key. None of the seven or ten were in fact used for hire during the six months. Revenue licences for eighty-five cabs were taken out by the respondent on February 11, 1910, and for nine cabs on May 28, 1910, making ninety-four, which was the number held by him on June 1.

For the appellants it was contended that the respondent should have taken out licences for the whole number of cabs which he kept upon his premises and for which he held police licences, and that he had "kept" within the meaning of s. 27 of the Act of 1869 a greater number of carriages than he was authorized to keep by the licences granted to him under the Act, whether he actually used them for hire or not.

For the respondent it was contended that "keeping" meant "user," and that he was not in fact using more than ninety-four cabs, and that he was not liable for the revenue duty until the actual use of a cab.

It was admitted by the appellants that it was not the practice of the Inland Revenue authorities to demand payment of the licence in the case of a private owner unless and until the carriage was used, but they contended that, inasmuch as the duty was lower in the case of a hackney carriage than in the case of a carriage not let for hire, no inference unfavourable to them could be drawn from this fact.

The magistrate was of opinion that on the above facts there was no evidence upon which he could hold that the respondent was using a greater number of cabs than ninety-four within the meaning of the section, and that the word "keep" meant "use." He accordingly dismissed the summons.

Danckwerts, K.C., and Cecil Walsh, for the appellants. Having a carriage ready for use when required amounts to keeping it within the meaning of the Customs and Inland Revenue Act, 1869; and here the reserve cabs were ready for use, having been licensed by the police and provided with plates. It is not necessary that the person sought to be taxed should in fact use the carriage; it is enough that he keeps it for use, that is with the intention of using it when wanted. In Davey v. Thompson (1), where the owner of a carriage, which had accidentally become disabled during the year for which an excise licence had been duly taken out, was accommodated by his coachbuilder, during the repair of the carriage, with the use of another carriage without payment, the coachbuilder was held not liable to take out a licence in respect of the carriage so lent. But the ground of the decision was that, though he kept it for use, he so kept it for use not by himself, but by his customers. A. L. Smith J. said, "I think the meaning of 'keep' there is keep for use." And had the coachbuilder kept the carriage for use by himself the decision would have been otherwise. Here the respondent clearly kept the reserve cabs for use by himself.

[BANKES J. But did he keep them as hackney carriages? From the definition of hackney carriage in s. 4, sub-s. 3, of the Act of 1888 - "'Hackney carriage' means any carriage standing or plying for hire" - it would seem that these particular cabs never came within that category.]

Under the Act of 1869 no distinction was drawn between a hackney carriage and any other form of carriage. They paid the same duty. Under the Act of 1888 hackney carriages are now taxed at a lower rate; they are entitled to a partial exemption from the duty to which they were formerly liable. But it is not for the revenue officer, but for the person taxed, to shew that he is entitled to that exemption. It could not be disputed that these cabs were carriages, and, apart from the question of whether they were kept or not, the only effect of failure to shew that they were hackney carriages within the definition would be that they would lose the benefit of the lower rate and become chargeable with the full carriage tax.

No counsel appeared upon the other side.

LORD ALVERSTONE C.J. The facts of this case are some what peculiar. The respondent took out revenue licences for ninety-four cabs. He had in his yard a number varying from 102 to 104. But it is to be observed that he was a carriage builder, and he from time to time sold cabs built by him. Therefore the mere possession of unlicensed cabs would not be sufficient to shew that he kept them. That was really decided in the case of Davey v. Thompson (1), where it was sought to tax a coachbuilder for a carriage which he had lent to a customer while his own carriage was being repaired, and the Court held that the coachbuilder did not keep the carriage within the meaning of the statute. Here the case finds that none of the reserve cabs, seven to ten in number, were ever in fact used during the six months in respect of which the tax is claimed. Mr. Danckwerts has argued that that is immaterial, and that, provided the cabs in question were kept in all respects ready to be used if at any time one of the other cabs broke down, they were being kept within the meaning of the section. The section, s. 27, says that "Every person who shall .... keep a greater number of carriages than he shall be authorised to .... keep" shall be liable to a penalty. It is to be noticed that hackney carriages are not there specially referred to, the reason being that in that Act no distinction for purposes of taxation was drawn between hackney carriages and any other class of carriages. The special tax on hackney carriages was imposed by the later Act of 1888. But in order to render the respondent liable he must be shewn to have kept "a greater number of carriages," meaning thereby hackney carriages, than he was licensed to keep.

The question is, When did he begin to keep the hackney carriages which he owned? As regards the ninety-four he undoubtedly kept them during the whole of the preceding six months. But did he keep the reserve hackney carriages which were locked up in his coach-house? It seems to me that until a carriage stands or plies for hire it is not a hackney carriage and is not the subject of taxation as such. If these had been private carriages lying unused in the coach-house there can be no question but that the owner would not have been liable even though he may have intended to use them in the future if occasion demanded. And it seems to me that in order to prove that the magistrate's decision here was wrong it is necessary to alter the definition of a hackney carriage and say that it means not only a carriage standing or plying for hire, but a carriage standing or plying for hire or being ready for use for standing or plying for hire. Mr. Danckwerts pressed us with the fact that the respondent had gone to the expense of putting plates on these cabs and paying for police licences for them. But that does not really advance the argument. It does not go to shew that he was keeping as hackney carriages cabs which had never in fact gone out of the yard. I quite agree that if any of them had gone out and taken the place of another cab the decision ought to be different. But here there was no evidence that the seven to ten cabs in the coach-house were hackney carriages or were kept by the respondent as such. The appeal must be dismissed.

BRAY J. I am of the same opinion. We must take it as found upon this case that these reserve cabs were never in fact used, and never stood or plied for hire. Under those circumstances are they subject to the tax? In my opinion they are not. Sect. 22, which is the section requiring persons keeping servants, carriages, &c, to make declarations, contemplates the tax as being imposed in respect of the use of the taxable subject. It begins "Every person employing any male servant." Mr. Danckwerts conceded that that did not mean merely entering into an agreement with a man, or paying him wages without more. It means using him as a servant. Later on it deals with "wearing or using any armorial bearings." There must be an actual user to render a person liable to the tax. And when it speaks of "keeping any carriage" I think we ought to construe the word "keeping" in the same way. Keeping does not mean merely having in one's possession, but actually using. And in my opinion the tax on a carriage is not payable until it is actually used.

BANKES J. I agree. I wish to add that under s. 22 of the Act of 1869 every person who keeps a carriage is required to make a declaration in the form provided by the Commissioners as to the number of carriages kept by him. The form of declaration so provided by the Commissioners to be used in the case of a hackney carriage differs from the form to be used in the case of an ordinary domestic carriage. The former commences with the words "This declaration must be duly made and licences obtained before the end of January in the above year or within twenty-one days after first becoming liable to the duty by every person keeping any hackney carriage." The form defines the term "hackney carriage" as meaning "any vehicle drawn by a horse or mule or horses or mules and standing or plying for hire." And in the directions on the back of the form it is stated that "If at any time during the remainder of the year, after making this return, a person .... takes an additional hackney carriage .... into use the necessary licence .... must be taken out within twenty-one days." That shews that, whatever the rule may be as to the liability of a person who keeps an ordinary domestic carriage for use, in the sense of keeping it with the intention of using it when required, the owner of a hackney carriage first becomes liable to the duty when he takes it into use by causing it to stand or ply for hire.

Appeal dismissed.

Solicitor for appellants: Edward Tanner.

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