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I was recently asked a question regarding this case and after further investigation it soon became apparent that Mrs Joanne Connolly was the defendant.
The full case is as follows.
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Dayman (Drug Trafficking Act Receiver of Moore and another) v Anfield Services Ltd
Contract – Offer and acceptance – Acceptance – Sale of half-share of hackney carriage licence – Whether binding agreement entered into
[2006] EWHC 2937 (QB), HQ05X01991,
QUEEN'S BENCH DIVISION
JUDGE RICHARD SEYMOUR QC (sitting as a judge of the High Court)
26, 27, 31 OCTOBER, 1 NOVEMBER 2006
1 NOVEMBER 2006
This is a signed judgment handed down by the judge, with a direction that no further record or transcript need be made pursuant to Practice Direction 6.1 to Pt 39 of the Civil Procedure Rules (formerly RSC Ord 59, r (1)(f), Ord 68, r 1). See Practice Note dated 9 July 1990, [1990] 2 All ER 1024.
J Burton for the Claimant
J Connolly for the Defendant
Russell Jones and Walker
JUDGE RICHARD SEYMOUR QC:
[1] This is a curious case. It concerns the right to drive a Hackney carriage in the City of Liverpool. Although I have not been shown the relevant legislation, I have been told by Mr James Burton, who appeared on behalf of the Claimant in this action, that by Pt II of Local Government (Miscellaneous Provisions) Act 1976 provision is made for the regularisation of Hackney carriages by district councils. Essentially, as I understand it, in order to be able to ply for hire using a Hackney carriage a person desiring to carry on that business needs to obtain a licence from, outside London, the local district council. It appears that for the City of Liverpool the relevant local authority for granting Hackney carriage licences is Liverpool City Council. In this judgment I shall refer to that authority as “the Council”.
[2] Again as I understand it, where a person applies successfully to a district council for a licence to ply for hire using a Hackney carriage, that person is issued with a plate showing details of the licence granted, and the plate is to be applied to the vehicle in respect of which the licence has been granted. It appears that the physical licence plate is owned by the authority issuing the licence.
[3] By an application dated 29 August 1996 the Defendant, Anfield Services Ltd, to which I shall refer in this judgment as “Anfield”, applied to the Council for a licence to ply for hire in a vehicle having the registration C398 CUU. That application was successful. Consequently Anfield was issued by the Council with a Hackney carriage licence plate numbered 1235 in respect of that vehicle. In this judgment I shall refer to the rights conferred by the issue of a licence having that number as “the Original Licence”.
[4] Although almost no direct evidence about it was put before me, it seems that at all times material to this action until it was dissolved on 28 March 2000 there existed a company called Taximech Finance Ltd. In this judgment I shall refer to this company as “Taximech”. As I understand it, the issued shares in Taximech were held by Mr William Moore, Mr Francis Joseph Danher and Mr Peter Anthony Doherty in equal shares as between them.
[5] Notwithstanding that the issue and transfer of Hackney carriage licences in relation to the City of Liverpool are matters falling to be dealt with by the Council in accordance with its statutory powers and functions, it seems that in practice the Council is inclined to look favourably upon applications for the transfer of a licence from a holder of that licence to someone desiring to hold it. This, it appears, has brought about the creation of a market in licences. In other words, Hackney carriage licences in the City of Liverpool are bought and sold. The evidence was that people are prepared to pay substantial sums, amounting to thousands of pounds, in order to acquire a Hackney carriage licence. A constraint upon this trafficking, perhaps the only one, is that the Council is not prepared to countenance the issue or transfer of a licence to someone who is considered not to be a fit and proper person to hold the licence.
[6] It also appears that the Council, for reasons which were not investigated in evidence before me, is prepared to contemplate the issue or transfer of Hackney carriage licences to persons jointly. As is apparent from what I have already said about the issue of the Original Licence to Anfield, a licence can be granted or transferred to a limited liability company. The holder of a licence does not need to be an individual.
[7] By a document called a “Transfer Notification” dated 27 August 1997 Anfield and Taximech applied to the Council for the transfer by Anfield to Taximech of a half share in the Original Licence. What was the purpose of that transaction was not investigated in evidence. The application, however, was successful. Consequently, thereafter the Original Licence was held jointly by Anfield and Taximech. At some point, so it seems, the vehicle to which the Original Licence related was changed from that with the registration number C398 CUU to that with the registration number M784 VSF. No copy of any document evidencing the terms of the Original Licence was put before me, but I was told, and it did not seem to be in dispute, that the Original Licence expired by effluxion of time on 16 September 1999.
[8] On 9 April 1999 at Warrington Crown Court Mr Moore and Mr Danher were convicted of possessing heroin with intent to supply.
[9] On 6 May 1999 Moses J made an order pursuant to the provisions of Drug Trafficking Act 1994 in relation to Mr Doherty. By that order Mr Doherty was restrained from dealing with his assets. A list of his assets was set out in the order. It included “f) shares (including any dividends and interest) held in Taximech Finance Ltd.” The list did not include the Original Licence, or any vehicles.
[10] The order made by Moses J on 6 May 1999 was varied by Harrison J in an order dated 21 December 1999 so as to add: “h) Carbodies Taxi registration no M784 VSF with Taxi Plate No 1235” as well as a number of other taxis, all but one of which were also identified both by registration number and taxi plate. No evidence was put before me to explain how Harrison J came to make that order or as to what was his intention in listing the various taxis by reference to both registration number and taxi plate. In fact by the date of his order the Original Licence relating to the vehicle with the registration number M784 VSF had expired by effluxion of time.
[11] On 17 April 2000 Moses J made an order pursuant to the provisions of Drug Trafficking Act 1994 appointing a receiver in respect of Mr Moore. The receiver appointed was the Claimant in this action, Miss Sara Dayman. The purpose of the appointment was explained in para 1 of the order in this way:
“This means that the Receiver must, subject to the terms of this order, collect the Defendant's assets and sell enough of them to pay the confiscation order.”
[12] The order dated 17 April 2000 included a declaration, of which the part material for present purposes was:
“3 The Defendant holds a 1/3 beneficial share in Carbodies Taxi registration numbers M228 WSX and taxi licence plate no 183, M784 VSF and taxi licence plate no 1235, F279 SJH, M220 USG and taxi licence plate no 1177, H462 XYW and taxi licence plate no 1149, K988 PCM and taxi licence plate no 1591, H287 XYW and taxi licence plate no 1027, L579 HHV and taxi licence plate 1606, H669 YYN and taxi licence plate no 1621 and Metrocab L773 MSF with taxi licence plate 1032.”
[13] What prompted Moses J to make that declaration was not explained before me. The questions which arise are why he declared, on the face of it, that Mr Moore held a one-third beneficial share in, amongst others, the Original Licence, which had by then expired, and why he made such declaration when, on the material before me, the Original Licence during its period of validity had authorised not him, but Anfield and Taximech jointly, to ply for hire using, latterly, the vehicle with registration number M784 VSF. Even if one supposed that Moses J was intending to disregard the fact that Mr Moore was only a shareholder in Taximech and to treat him and his co-shareholders as if they each had a one-third share in the assets of Taximech, it appears that the learned judge must have been misled into thinking that Taximech alone, and not jointly with Anfield, held the Licence, as well as into thinking that at the date of his order the Original Licence was still extant.
[14] By the order of 17 April 2000 Miss Dayman was given the usual powers of a receiver, including the power to sell the assets of Mr Moore. As para 8 the order included:
“In this order 'the Defendant's assets' or 'assets of the Defendant' means any property in which the Defendant has any interest or to which the Defendant has any right and any property held by any other person to whom the Defendant has made a gift caught by the Drug Trafficking Act 1994, including but not limited to all property set out in the Schedule hereto.”
The list in the Schedule included the vehicles and taxi plates set out in the third paragraph of the declaration included in the order.
[15] Also on 17 April 2000 Moses J made against Mr Danher an order mutatis mutandis in the same form as that against Mr Moore from which I have quoted.
[16] It was, as I understood it, common ground before me that Mr Doherty was at some point convicted of a drugs offence of some kind, but no details were communicated to me. It also appeared that a confiscation order had been made in his case, but that no receiver was appointed. However, by an order made by Newman J on 2 December 2002 Mr Doherty, Mr Moore and Mr Danher agreed to the sale of all of the vehicles listed in the paras 3 of the declarations included in the orders of Moses J dated 17 April 2000, other than F279 SJH, with associated Hackney carriage licence plates. However, the Original Licence was not one of the listed Hackney carriage licence plates. The vehicle with registration number M784 VSF by that time carried a licence plate numbered 955.
[17] It appears that, notwithstanding that the Original Licence had expired by effluxion of time on 16 September 1999, that Taximech had been dissolved on 28 March 2000 and that each of Mr Moore, Mr Danher and Mr Doherty were, after conviction of drug offences, plainly no longer fit or proper people to hold a Hackney carriage licence, both the Claimant and Anfield considered that in some way which I did not understand the Original Licence continued to have a life after 16 September 1999, or at least was capable of being revived to the benefit of Mr Moore, Mr Danher and Mr Doherty so that the supposed interests of Mr Moore and Mr Danher could be realised by the Claimant.
[18] In that happy state of delusion the Claimant and Anfield, through Mrs Joanna Connolly, a director of the company, who appeared on its behalf, by my permission, at the trial before me, sought to negotiate terms for the acquisition by Anfield of the half share in the supposed continuing Original Licence which it did not at that stage hold. The Claimant engaged the firm of Edward Symmons & Partners, consultant surveyors, to advise her as to the value of the Original Licence. The matter was dealt with by Mr Robert McArdle, an associate partner. In a letter dated 17 October 2001 to an assistant of the Claimant Mr McArdle expressed the view that the value of the whole of the Original Licence was £25,000.
[19] The previous day Mr McArdle and Mrs Connolly had met. They had discussed the sale of a half share in the Original Licence by the Claimant to Anfield. Following that discussion Mrs Connolly wrote to Mr McArdle. The material part of her letter was in these terms:
“Further to our meeting this morning and our subsequent phone call I would like to confirm the following:
I accept in principle the current market value of a Liverpool Hackney Licence, as of today, being £25,000 (twenty five thousand pounds). I agree to pay 50% of this sum within five days from the receipt of an invoice from the receiver, if in return the receiver agrees in the interim to allow me to renew licence number 1235 with a replacement vehicle, the licence itself remaining for the time being in both Anfield Services LTD's name and the receivers name.
This offer is based upon the receiver agreeing to notify the Liverpool Hackney Carriage department that an agreement has been reached and that they consent to the renewal in both names in the interim period.”
[20] The response to Mrs Connolly's letter dated 16 October 2001 came from solicitors acting on behalf of the Claimant, Messrs Russell Jones and Walker, to the solicitors at that time acting on behalf of Anfield, Messrs Moore Sexton Bibby, in a facsimile transmission dated 25 October 2001. The material part of that facsimile was in these terms:
“I am pleased to confirm that our client, Bdo Stoy Hayward [the firm of which the Claimant was and is a member], has accepted your client's offer to purchase the half share of the Licence plate 1235 for the sum previously agreed.”
[21] What next happened, so it appears, was that an application was made to the Council jointly by the Claimant and Anfield for the grant of a Hackney carriage licence to them. No documents in relation to that application were put in evidence, but in a letter dated 14 August 2003 written by Mr Damien Edwards, a Licensing Officer of the Council, to BDO Stoy Hayward, of which a copy was put in evidence, Mr Edwards explained the position in this way:
“I draw your attention to Liverpool Hackney Carriage licence 1235 which is currently assigned in name (Proprietorship) to Anfield Services Ltd and BDO Stoy Hayward in joint ownership. The licence plate is associated with vehicle index number P211 PFM. The licence is operative from 13 June 2003 and due to expire on 12 July 2004.
The history of this licence is somewhat complicated the proprietorship having been solely in the name of Anfield Services and then by part transfer being registered in the joint names of Anfield Services and Taximech Ltd. BDO Stoy Hayward are currently the part proprietors of the licence by virtue of a Liverpool City Council Licensing Committee authorisation of 10 January 2002. Essentially the council wished to ensue [sic] that a taxicab vehicle was licensed and available for use by of [sic] the citizens of the City of Liverpool.”
[22] It is unclear why the application for the issue of a licence was apparently made not in the names of Miss Dayman and Anfield, but in the names of BDO Stoy Hayward and Anfield. One might have expected that if Miss Dayman was claiming some privilege in her capacity as receiver of Mr Moore and Mr Danher she would have sought it in her own name in that capacity.
[23] After the issue of the licence on 10 January 2002, which for the avoidance of confusion I shall call in this judgment “the New Licence”, Anfield applied it to a vehicle which it operated. The New Licence has been renewed as appropriate since it was granted and is, as I understand it, still current. Anfield has operated a vehicle as a Hackney carriage with the benefit of the New Licence ever since it was issued.
[24] After the issue of the New Licence it would seem that all of the conditions for payment of the sum of £12,500 set out in Mrs Connolly's letter dated 16 October 2001, other than the production on behalf of the Claimant of an invoice, had been complied with. However, it does not appear that an invoice has ever been rendered.
[25] A formal agreement intended, ostensibly, to give effect to the exchange of the correspondence of 16 and 25 October 2001, was prepared showing the vendor as Miss Dayman, not BDO Stoy Hayward. That formal agreement was signed by Miss Dayman and dated 8 August 2002. The document was presented to Anfield for signature, but it has never been signed. Instead there has been a very lengthy series of exchanges as to the sufficiency of the terms of the formal agreement. A particular focus of concern on the side of Anfield has been a desire to make sure that Mr Doherty could not claim an interest in the New Licence. The possibility that Mr Doherty might have an interest in the New Licence was first raised by Messrs Russell Jones and Walker, on behalf of Miss Dayman, in a letter dated 12 October 2001. It is ironic, as matters have turned out, that the issue was first raised on behalf of Miss Dayman. However, the question having been raised, both Anfield and the Council have looked to Miss Dayman and her advisers to satisfy them that no possible interest of Mr Doherty was any impediment to the transfer by Miss Dayman of her interest in the New Licence.
[26] As a result of the failure of the parties to reach agreement in relation to the formal document presented on behalf of Miss Dayman to Anfield, the present action has been commenced.
[27] The position of Miss Dayman in this action was that no binding agreement was ever made between her and Anfield for the sale of her half interest in the Original Licence because the exchange of the correspondence dated 16 and 25 October 2001 was subject to contract. In those circumstances it was contended that the New Licence was held by the Claimant and Anfield at law as trustees and that the court should execute the trust by making an order for sale. It was also contended that, having had the use of the New Licence, Anfield should account to the Claimant for the benefits which it had derived from it. It was further asserted that in the circumstances the costs of the sale should be borne entirely by Anfield.
[28] The position of Anfield was that by the exchange of correspondence of 16 and 25 October 2001 a binding contract had been made. I think that it was accepted by Mrs Connolly that Anfield was obliged to pay the sum agreed, £12,500. However, she contended, the issue was complicated by the possible interest in the New Licence of Mr Doherty. Mrs Connolly seemed to be seeking some warranty from the Claimant that Mr Doherty had no interest in the New Licence. Mr Burton submitted that the consent of Mr Doherty to a sale of the New Licence was unnecessary because the Claimant held her one half share in the New Licence on trust as to one third for each of Mr Moore, Mr Danher and Mr Doherty, so that a purchaser at law would not be interested in the beneficial interests.
[29] However, there was another issue, which was whether it was permissible under the terms of the order of Moses J dated 6 May 1999, as varied by the order of Harrison J dated 21 December 1999, for the beneficial interest of Mr Doherty to be sold. The question was whether the prohibition in those orders on dealing with the assets of Mr Doherty prevented the sale. Mr Burton submitted that the orders in question did not prohibit the sale because the Claimant was a third party to the orders and Mr Doherty's interest in the New Licence was an equitable interest. Alternatively, if permission to sell the New Licence was required, he sought such permission from this court.
[30] The question of the possible need for permission from this court for a sale of the New Licence seems to have arisen from a hearing of this case, which was commenced as a claim under Pt 8 of the Civil Procedure Rules, before Deputy Master Partridge. The learned Deputy Master gave judgment in writing on 8 February 2006. In the course of his judgment he said this:
“20 The point in question is this. I would, without more, have considered that once licence 1235 was renewed in the joint names of Claimant and Defendant, Mr Doherty ceased to have any interest therein whatsoever. However, in a letter from Russell Jones & Walker to Liverpool City Council dated 12 October 2001, objecting to the renewal of licence 1235 in the sole name of the Defendant, they stated:
'in relation to each taxi with associated licence plate, there is a one third interest to be divided between Messrs Moore and Danher (against when – sic – restraint and confiscation orders have been made) and Mr Doherty against whom no confiscation order has been made. Thus, it is extremely important to ensure that Mr Doherty's interest is properly protected.'
This statement, upon which the Council may have acted in deciding to renew the licence in joint names, may well found the existence of a constructive trust pursuant to which the Claimant holds her moiety of the licence as to one third thereof on trust for Mr Doherty and as to the remaining two thirds as Receiver of Danher and Moore.
21 The Claimant acknowledges that there exists a one sixth share to which she has no beneficial title and to which Mr Doherty is beneficially entitled unless that share already belongs to the taxpayer (as regards which latter possibility I find it difficult to see how Mr Doherty's share might have passed into public ownership absent a confiscation order). If Mr Doherty does indeed have a one third share in the licence then an order for sale of the licence as sought by the Claimant or an order that the Receiver transfer her moiety to the Defendant for the sum of £12,500, as sought by the Defendant, would give rise to a disposition of Mr Doherty's share. This would be contrary to the terms of the Restraining Order made against Mr Doherty and variation thereof would be necessary in order to sanction such disposition.”
[31] I have great sympathy with the learned Deputy Master and with his analysis. The supposed problem, as it seems to me, has been entirely created by the Claimant and her advisers. The answer to it lies in the initial reaction to the point of the learned Deputy Master. That is to say, when the New Licence was issued in the names of the Claimant, or BDO Stoy Hayward, and Anfield no one other than they had any interest in it. The Original Licence, in which both Anfield and Taximech, and perhaps through the latter, Mr Moore, Mr Danher and Mr Doherty, had had an interest, expired by effluxion of time on 16 September 1999. Thereafter that licence was dead. After the dissolution of Taximech the Original Licence could not have been renewed with it as a party. After the convictions of Mr Moore, Mr Danher and Mr Doherty the Original Licence could not have been renewed with any of them as a party because each of them would not have been able to satisfy any reasonable local authority that he was a fit and proper person to hold a Hackney carriage licence. It is in the failure of the Claimant and her advisers to recognise these elementary facts, but rather to treat the Original Licence as continuing, or capable of being resurrected after death, that confusion on this point has been created. Perhaps clear analysis of the position was obscured by the fact that the number of the New Licence was the same as the number of the Original Licence. However, it should have been plain that that circumstance did not mean, and could not mean, that the New Licence was the same licence as the Original Licence. In truth the position is that on the expiration by effluxion of time of the Original Licence it ceased to exist for all time and Mr Moore and Mr Danher ceased to have any interest in it, even if they had previously had any such interest. Consequently no issue arises, in my judgment, of Mr Doherty having any interest in the New Licence, and thus there never has been any impediment to the disposal of her interest in the New Licence by the Claimant.
[32] Ironically, it seems to follow that the Claimant should never have been involving herself in obtaining the New Licence. She had no interest in that as receiver of Mr Moore and Mr Danher, because neither of them had any interest in the New Licence. Their interest, if any, was in the Original Licence. However that may be, the fact of the matter is that the Claimant has involved herself in the obtaining of the New Licence and I must determine for the purposes of this action whether, as Mrs Connolly contended, the Claimant had agreed to sell her interest in the New Licence to Anfield, or whether that had not been agreed, in which case what should be done concerning the New Licence. I am not concerned in this action with any consequences for Miss Dayman in her capacity as receiver of Mr Moore and Mr Danher of having become involved in the obtaining of the New Licence.
[33] The next issue which I do have to determine is whether, by the exchange of correspondence dated 16 and 25 October 2001 a binding agreement was made for the sale by the Claimant to Anfield of her interest in the New Licence, if and when issued, for the sum of £12,500. It is quite plain, in my judgment, that such a binding agreement was made. Although the offer of Mrs Connolly on behalf of Anfield was subject to conditions, those conditions needing to be met before a binding contract came into force, namely that the Claimant allowed Anfield to obtain the New Licence in the name of both of them, giving appropriate notification to the Council of consent to that effect, and permitting Anfield to operate a Hackney carriage using the New Licence, were met by the time the New Licence was issued. Moreover, although there was in fact no subsisting licence at the date of the agreement, it is plain that what was envisaged was the transfer of the Claimant's interest in the New Licence once granted. The facsimile transmission dated 25 October 2001 was not expressed to be “Subject to contract”, or anything like that. On its face it was a straightforward acceptance of the offer made by Mrs Connolly on behalf of Anfield in her letter dated 16 October 2001 to Mr McArdle. In my judgment it took effect as such straightforward acceptance.
[34] I find that it was a term of the agreement made between the parties that payment of the agreed price of £12,500 did not become due until five days from receipt by Anfield of an invoice from the Claimant. No such invoice has ever been rendered. Thus the £12,500 is not yet due. However, it will be due within five days of delivery of such an invoice, if such invoice is now delivered.
[35] Mr Burton submitted in closing that it was not open to Anfield to take the point that the sum of £12,500 was not due because no invoice had been issued on behalf of Miss Dayman because that point had not been pleaded. It is right to say that the point only came clearly into focus when Mrs Connolly prepared a written skeleton argument in advance of the trial before me. That skeleton was served two days before the first day of the trial, which was itself six days before the date upon which this judgment is delivered. Knowing of the point Mr Burton had cross-examined Mrs Connolly on the question of the non-delivery of an invoice, and it is impossible to say that the trial before me would have taken any different course had the point been put in a formal statement of case. No invoice had been served by the conclusion of the trial.
[36] In fact when she was asked about the invoice point in cross-examination Mrs Connolly pointed out that in the Acknowledgment of Service Anfield had stated that it was seeking as a remedy, “that original agreement be upheld” and that form of words also appeared in Anfield's Defendant's Response to Particulars of Claim and in the Defendant's Counterclaim. The use of that form of words, as it seems to me, was sufficient to alert the Claimant to the case which was being advanced on behalf of Anfield, namely that the contract between the parties was that contained in the letter dated 16 October 2001 written by Mrs Connolly and in the facsimile transmission dated 25 October 2001 written in response. It should have been obvious that, since it was common ground that Anfield had not in fact paid the agreed sum of £12,500, that case involved Anfield having a justification for not making payment. A moment's thought by someone who had read the letter dated 16 October 2001 would have alerted one to the issue of the non-delivery of an invoice.
[37] In the result it does not seem to me that justice to the Claimant requires that the invoice point should be treated as not open to Anfield.
[38] As property in the whole of the New Licence passed to Anfield on the issue of the New Licence, there can be no question of Anfield being under any obligation to the Claimant to account for any profits earned by using the benefit of the New Licence. If all had gone as it should have, as from sometime early in January 2002 the Claimant would have rendered an invoice to Anfield and, within five days of receipt thereof by Anfield, been paid the £12,500 payable under the agreement. The Claimant had no legitimate expectation of being paid any further or other sum.
[39] In the result the claims of the Claimant in this action fail and are dismissed.
[40] The counterclaim of Anfield for an order, as it was put, “that the original contract be upheld”, succeeds. In the circumstances the appropriate form of order is a declaration that the Claimant and the Defendant entered into an agreement to sell the Claimant's interest in the New Licence, if and when issued, to the Defendant for the sum of £12,500 and that agreement is binding upon the Claimant. Anfield did also seek an order that the Claimant satisfies the Council as to the position regarding Mr Doherty's interest. As I have explained, that issue does not arise. If the Council has any abiding concerns on the question, those should be allayed by the Council being shown a copy of this judgment. The alternative claim in the counterclaim for damages for misrepresentation does not arise.
[41] I will hear further argument as to any consequences of the conclusions which I have expressed in this judgment.
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