Contract Law Cases - OFFER AND ACCEPTANCE - HACKNEY CARRIAGE LICENCE

Dayman v Anfield Services Ltd

[2006] All ER (D) 02 (Nov)

Court: QBD

Judgment Date: 01/11/2006

CONTRACT - OFFER AND ACCEPTANCE - ACCEPTANCE - SALE OF HALF-SHARE OF HACKNEY CARRIAGE LICENCE - WHETHER BINDING AGREEMENT ENTERED INTO

In 1996, the defendant made a successful application to the relevant local authority for a hackney carriage licence (the original licence) for the city of Liverpool. A half-share of that licence was subsequently transferred to T Ltd. T Ltd had three shareholders. All three of those shareholders were later convicted at various times of drugs offences. Compensation orders were made in respect of two of them. An order was made in respect of the third, D, restraining him from dealing with his assets, including his shareholding in T Ltd. That order was later varied to include, inter alia, the original licence.

The claimant was appointed as receiver in respect of one of those shareholders in respect of whom a compensation order had been made. By September 1999, the original licence had expired by effluxion of time. Notwithstanding that that licence had expired, and that T Ltd was dissolved in March 2000, the parties considered that the original licence continued to have a life, or that it was capable of being revived.

Negotiations followed for the acquisition by the defendant of a half-share of the original licence. A joint application was made to the local authority, and a new licence was granted in January 2002. The defendant applied that licence to a vehicle which it operated. The claimant never rendered an invoice to the defendant in respect of the half-share of the licence, which had been envisaged in the negotiations. The defendant never paid the claimant the value of the half-share of the licence, which had been agreed at £12,500. A formal agreement in relation to the sale was prepared but never signed on behalf of the defendant. The defendant became concerned as to whether D could claim any interest in the new licence. Part 8 proceedings ensued to determine various issues. The claimant contended that there had been no binding agreement in relation to the sale of the half-share of the original licence; that the new licence was held on trust; that the court should execute the trust by ordering the sale of the half-share, and that the defendant should account to the claimant for the use of the new licence. The defendant's position was that a binding contract had been entered into.

Held - In the circumstances of the case, D had no share in the new licence. The original licence had ceased to exist on its expiry. There was, therefore, no impediment on the claimant disposing of the new licence. It was quite plain that a binding agreement had been entered into between the parties for the sale of the half-share of the new licence to the defendant. Under the terms of that agreement, the defendant was not required to make an account of profits to the claimant. Moreover, so long as an invoice had not been rendered to the defendant, it had not been obliged to make payment of £12,500. A declaration would be granted accordingly.

Dayman v Anfield Services Ltd

CONTRACT - OFFER AND ACCEPTANCE - ACCEPTANCE - SALE OF HALF-SHARE OF HACKNEY CARRIAGE LICENCE - WHETHER BINDING AGREEMENT ENTERED INTO

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