Sharma v Singh [1973] FJLawRp 30; [1973] 19 FLR 164 (14 December 1973)

(1973) 19 FLR 164

IN THEN THE SUPREME COURT OF FIJI

NARENDARENDRA NAND SHARMA

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[SUPREME REME COURT, 1973 (Mishraishra J.), 14^th December]

CJurison

Contract – illegillegality – agreement for sale of t of taxi – breach of Traffic (Taxis ental) Regulations 1967 reg.&#/i0;5 (1>5 (1)5 (1) and <&##821– effect anct and enforcement of such illegal agreement.

In 1971 the partitered ered into a deed whereby the defendant sold a taxi to the plaintiff together wit taxiit, the purchase hase priceprice to be paid by instalments.

Taffic (Taxis and RentaRental Cars) Regulations 1967 reg. 12 (1) forbade the transfer or assignment of a permit, and at that particular time Government policy precluded the issue of taxi permiterefore all documentation, ion, registration and insurance remained in the name of he defendant although retained, renewed and paid for by the plaintiff.

Held: 1. greemeneement was illegal both in its making and performance and therefore no declaration was possible.

2. The plai&#821laim inim in conversion, however, succeeded.

3. The plai’s clas clas claim for damages for loss of earnings wsallowed as these earnings had been derived from the use of a vehicle on the strength of a of a taxi permit, an act forbidden by law.#160;
Cases referred to:d to:

Sajan Singh v. Sardara Ali [1960] 1 All E.R.br> <160;
Claim by the plaintiff in the Supreme Court for a declaration that he was the rightful owner of the taxi permit and for the return of thehase paid in then the alternative for the return of the cahe car and damages for conversion.
&#16> and&;and tel for the plae plaintiff.
A. Sahu Khan for the defendbr>
;
MISHRA J. [14<sup>tp>&#1cembe3] -

Thintiff and thed the dthe defendant are both taxi proprietors.tors. Both Both operate their taxis from Namaka Airport abr>&#br>In the plhe plaintiff owned one taxi and the defendefendant three. In September of that year year the latter offered to sell and the former to buy one of these three taxis.

In 1967 the Tc (Taxis axis and Rental Cars) Regulations were made with a view to exercising a measure of administrative control over taxis and rental cars through the Licensing Authority. Regulation 5 of tRegulations read as followsllows: -</sup>

“5. (1) Su toct to the provisions of these Regulations, the Authority may–

(a)

(b)

(2) The Authority, in exercising his discretion under this regulation, shn, shall have regard primarily to the interests of the public generally, including those of persons requiring and of persons providing facilities for transport whether by road, water or air, and, in so doing, shall have particular regard to the following matters:

(a) thd nee the area, in whin which the applicant proposes to base his vehicle, as a whole in relation to traffic;

<(b)&#/i>thancial abil ability of the applicant to provide the proposed service;

&#16>

) the cond conducthe applicant in any position he may hold or have held as a provider of a commercial transpoansport service.

(3) mit sbe inapproappropriate form specified in the SeconSecond Schedule to these Regulations.̶”

Regulation 12 is as fs: -

“12. (1) Subject to the provisions of this regulation. a permitermit shall be personal to the holder thernd shall not be transferred or assigned.

(2) Except whe prio prior conr consent of the Authority, the holder of a permit shall not appoint an agent or an attorney for the purpose of exercising any of the rights conferred by the permit nor shall older cause or permit any sany such agent or attorney to exercise any such right.

(4) If the holder of any permit purports, in contravention of the provisions of this regulation, to transfer or assign the permit to any other person, or causes or permits any other person to provide the service authd in the permit, both the hthe holder of the permit and the other person shall be guilty of an offence.”

On 5th Oc 1971 the plai plaintiff and the defendant entered into a deed which is in the following terms: -

“THIS TDEED ds made this 5th day of October 1971 BETWEEN JAG DEO SINGH Father’s name Banarsinarsi Singh of Nadi Airport, Transport Ope (who together with his executors administrators and assigns except where the context requirequires a different construction and hereinafter called “the Trustee”) of the one part & F’s name Ram Prasad Ssad Sharma of Narewa, Nadi Taxi Owner (who together with his executors administrators and assigns except where the context requirdiffeconstruction and and hereinafter called” the Purchasrchaser”) of the other part.

WHEREAS:

1. THIS detion is supplemental to a to an application for transfer of ownership of Motor Vehicled the 28th September 1971 made between the Trustee and the Purchaser being for transfer of r of Taxi Car Registered No. AA 327 under Section 19 of the Traffic Ordinance Cap. 152 (together with Taxi Permit No. 2166) free from all encumbrances in consideration of the sum of $6,682.94 paid by the Purchaser to the Trustee.

<#160;THE #160;said sum of82.94 shallshall be paid by the Purchaser to the Trustee as follows: -

(a)

(b) the Pser Pser shall o the Tthe Trusterustee the sum of $2,000.00 on the 10th day of October 1971.

the Purc Purc shal the Trustee the balance sum of $900.00 on the 31he 31st day of December 1972.

&#160

(d)#160;the Purc Purchasell pa said sum of $2,000.00 and $900.00 free of interenterest.

&the ;the Trustee here hereby declares that hhat he holds the said Taxi Car No. AA 327 together with the said Taxi Perm trus the aser frer free from all encumbrances and hereby agrees that he will at the requesequest andt and cost of the Purchaser transfer the said Taxi Car and Taxi Permit to the Purchaser at the time in such manner or otherwise deal with the same as the Purchaser shall direct.

2.&THAT&#160 the Purchaser h covenants wnts with the Trustee that he will keep the Trustee and/or his personal representative and personal administrators indemnified from all costs damages expenses claims and demands in ct of the said Taxi Car fror from time to time.

60;THAT&#160 the Purchase insure the saie said Car in his personal capacity and the Trustee hereby covenants with the Purchaser that he will not do anything whereby the insurance p or pes shall become vome void.

4. THAT>THATT whenehe Purchaser may wish wish to dispose of the said Taxi Car and the Taxi Permit the Trustee hereby covenants with the Purchaser to repurchase same for the same consideration.”
&#1r>The specifically stay states ttes that the agreement between the parties was for the transfer of taxi car registered No. AA 327 together with taxi permit No. 2166. The plaintiff himself said in evidence, “I agreed to buy car AA 327 with the taxi permit”.

The defendant han paid paid the whole of the agreed purchase price with the exception of $350 held by the plaintiff's solicitors to the defendant’s credit. This sum is to be paid out to him when the plaintiff is issued with a taxi permit by the Licensing Authority in his own name in respect of car No. AA 327.

On 5th Octo971 the defe defendant handed over this car to the plaintiff together with permit No. 2166 (Exhibit 13) and all other necessary papers relating to the vehicle. papers and the permit remained in defendant’s name. ame. The defendant, however, on that day wrote to the Principal Licensing Officer, Suva stating that he was by that letter surrendering his taxi permit No. 2166 on the express condition that in its place a permit be issued in favour of the plaintiff. If the plaintiff’s application for a permit were refused by the licensing authority, the defendant was to retain permit No. 2166. On the same day the plaintiff applied for a taxi permit in respect of vehicle No. AA 327 of which he described himself to be the owner. On that day, the defendant also signed a form (Ex. 5) transferring ownership of motor vehicle No. AA 327 to the plaintiff.

Deo Sharan Sharma a licensing Officer, gave evidence that about the time this application for a taxi permit was received, a committee appointed by the Government was preparing a reporthe subject of public transport and that a policy decision sion had been made not to issue any new taxi permits until the committee’s recommendations had been received and considered by the Government. The plaintiff’s application was therefore left in abeyance and he was so informed. No decision has yet been made on his application. While the transfer of ownership (Ex. 5) signed by the defendant would have been sufficient to enable vehicle No. AA 327 to be registered in the plaintiff's name as a private vehicle, it was not sufficient without a taxi permit also in the plaintiff’s name, to have it so registered as a taxi. The vehicle’s registration, its third party insurance certificate and taxi permit No. 2166 therefore, remained in the defendant’s name and are so today.

From 5th Octo971 onwardnward, the plaintiff treated this vehicle as his own and operated it as a taxi on the strength of permit No. 2166. He renewed its registration and third party insurance certificate i defendant's name when thes these fell due and took out a general insurance in respect of the vehicle in his own name. He kept the vehicle in good repair at his own expense and obtained certificates of fitness as and when required. He showed the income derived from this car in respect of 1971 and 1972 on his own income taxi returns.

On 26th J972 the defendefendant wrote to the Principal Licensing Officer, Suva (Ex. 14) requesting him not to take any further action in respect of taxi permit No. 2166.tated that there was a possibility of a settlement being reng reached between him and the plaintiff. According to the plaintiff, he was not informed of this letter.

On 13th October 197 defe defendant took possession of car No. AA 327 from the plaintiff's driver and has since refused to give it back to the plaintiff. He states that he is the true owner of the car and that thintiff has no claim to it. it. He has used it in the meantime for his own benefit.

The dant himself gave nave no evidence but relied mainly on legal submissions by his counsel. These submissions allege that the agreement of sale and purchase was cry to regulation 12 of the Traffic (Taxis and Rental Cars) ars) Regulations 1967 and was therefore tainted with illegality. The plaintiff therefore, says the defendant, cannot seek this Court's assistance in_. enfo that agreement. He fure further states that such an agreement would be ineffective to pass to the plaintiff the property either in the vehicle or in the taxi p.

The plaintiff on the ohher hand asks for a dr a declaration that he is the owner of the vehicle No. AA 327 and seeks an order giving him possession thereof. Alternatively he claims damages in the sum of $6,682.94c. He also seeks a declaration that he is the rightful owner of taxi permit No. 2166 or that the defendant holds it in trust for him. He further claims that the defendant has converted this vehicle and has detained it against the plaintiff’s wish and seeks damages in respect of such conversion.

Regulation 1of the Traf Traffic (Taxis and Rental Cars) Regulations 1967 forbids transfer or assignment of a taxi permit. Regulation 12(2) forbids permitting any person other than the holder to exercise any of the rights conferred by a taxi permit.

The agreeme the instantstant case was for the purchase of the vehicle together with the taxi permit and the total purchase price undoubtedly included the price placed on the permit. Applications were forwarded to the Licensing Authority requesting the issue of a taxi permit to the plaintiff in respect of the said vehicle in place of the defendant’s taxi permit which was conditionally surrendered. But a copy of the agreement itself was not forwarded to the Authority.

When trties learnt that that the matter could not, for the time being, receive the Authority's consideration they decided, nevertheles proceed with the performance of the agreement. The plaintiff commenced to operate the vehi vehicle as his own, while the taxi permit remained in the defendant’s name. The defendant received the price in regular instalments and treated the plaintiff as the owner of the vehicle. For two years defendant permitted the plaintiff to exercise the rights conferred by the taxi permit upon the defendant and to receive the benefits accruing from such exercise.

The agreemes, thereforeefore, illegal both in its making and in its performance and the plaintiff cannot succeed either in his claim for a declaration that he is the rightwner of taxi permit No. 2166 or for the return of the sum osum of $6,682.94 paid by him under the agreement.

The plaintialternative tive claim, however, is in tort. He alleges that on 13th October 1973 the defendant seized vehicle No. AA 327 of whi, the plaintiff was then the rightful owner and of which be then had actual possession. He . He claims the return of this car and damages for conversion and detention. The present value of the car is $2,500.

The law e subject was swas stated by the Privy Council in the case of ([1960] 1 All E.R. 269) as follows: -

They stated fu (at p. 2 p. 273): -

e present case this wous would be so notwithstanding section 19 (8) of the Traffic Ordinance under which registration is regarded as prima facie proof of ownership.

The plaintiff'im inersiversion, thereforeefore, succeeds and there will be an order for delivery of the vehicle No. AA 327 to him. It is not for thurt to say what action the Licensing Authority ought to take with regard to the issue of a of a taxi permit in respect of this vehicle.

As for damages tly dama damage proved by the plaintiff is the loss of earnings since 13th October 1973. These earnings would have been derived from the use of vehicle AA 327 on the strength of taxi permit No. 2166, an act forbidden by law. This court will not, therefore, allow such earnings to be taken into account for the purpose of calculating damages. No other damage has been proved.

Thintiff will have the the costs of this action, to be agreed or taxed.

Judgment for piff onff on claim for conversion.

Mishra J.