In re South Western Bus Co., Ltd.
1953Present : PuIIe J.B
In re SOUTH WESTERN BUS CO., LTD. et at.
In the matter of cases stated under the provisions of section 4of the Motor Car Ordinance, No. 45 of 1938, read with8ECTION 13 OF THE OMNIBUS SERVICE LICENSING ORDINANCE,No. 47 of 1942.
Omnibus Service Licensing Ordinance, No. 47 of 1942—Sections 4, 7, 14 (3)—Routelicence—Competing applicants—Matters to be considered when selecting a.particular applicant—Stage carriage permit—Motor Traffic Act, No. 14 of 1951,s. 246 (5).
Three omnibus companies—A., B. and C.—were applicants for a route licenceunder the Omnibus Service Licensing Ordinance. The Commissioner of MotorTransport granted the licence to A. On appeals taken by B. and C., the Tribunalof Appeal set aside the order of the Commissioner and granted the licence to B.In two cases stated by the Tribunal of Appeal at the instance of the Commissioner<on behalf of A.) and C. respectively—
Held, (i) that cases stated on questions of fact should not bo decided ona meticulous consideration of facts of minor importance. The question waswhether on vital matters the Tribunal of Appeal had erred to such a degreethat its decision was unsustainable.
that the person on whom the duty was cast in the first instance to decideon the respective merits of claimants to a route was the Commissioner and thatthe Tribunal was an appellate body.
that in .the issue of a route licence the.needs of the public were of para-mount consideration. If a particular company could give the best service, itshould not be shut out solely on the ground that it was endeavouring to increaseits profits by enlarging its existing operations.
that it was not a serious objection to a new operator providing a servicealong a route near to an existing one that the old operator would suffer adiminution of profits. It would, however, be against the public interest if, asa rbsult of the new licence, the old operator had to forego profits to the extent<if rendering his service unremunerative from a-business standpoint.
1 (1944) 46 N. L. R. 235.
PULLE J.—In re South Western Bus Co., Ltd.
0-4ASES stated under the provisions of section 4 of the Motor CarOrdinance, No. 45 of 1938, read with section 13 (8) of the Omnibus ServiceLicensing Ordinance, No. 47 of 1942.
V. Per era, Q.O., with H. W. Jayewardene and A. C. M. Uvais, forthe South Western Bus Co., Ltd.
Thiagalingam, Q.C., with S. E. J. Fernando, P. Somatilakam and
T.Parathalingam, for the High Level Road Bus Co., Ltd.
Stanley de Zoysa, with C. Manohara, for the Gamini Bus Co., Ltd.
V. Tennekoon, Crown Counsel, for the Commissioner of Motor Transport.
Car. adv. vult.
September 11, 1953. Polls J.—
* The questions which arise for determination in this matter are containedin two cases stated by the Tribunal of Appeal under section 13 (8) ofthe Omnibus Service Licensing Ordinance, No. 47 or 1942, read withsection 4 of the Motor Car Ordinance, No. 45 of 1938. The two casesstated bear Supreme Court Nos. 49 and 72 and they relate to the grantof a route licence to operate an omnibus service from the Bambalapitiyacoast road at its junction with New Bullers Road through ThurstanRoad, Flower Road, General’s Lake Road to the Pettah. This route willbe described throughout this judgment as route No. 3.
In 1947 the Commissioner of Motor Transport had before him aboutfifty applications by omnibus companies to operate on various routesthe termini of each being within the city of Colombo. The Commissionerselected four routes of which one was almost identical with route No. 3,the difference being that the southern terminus was not the junction ofBambalapitiya coast road and New Bullera Road but BambalapitiyaRailway station which is by the sea on the western side of the coastalroad. The Commissioner’s selection was altered by all the membersof the Tribunal of Appeal to the extent that the latter cut out the portionbetween the railway station and the junction referred to.
The principal claimants to this route (or substantially the same route)are three omnibus companies which I shall refer to as South Western,High Level and Gamini. Really the choice was between South Westernand High Level and since 1948 a fierce battle has been fought by themfor this route. The statutory provisions under which decisions had to bereached by the Commissioner and the Tribunal did not require them totake any formal evidence. The record consists of the transcript of thespeeches of Counsel and the documents marked by them. No consideredorder setting out the merits of the arguments urged before the Commis-sioner was delivered with the result that a wide range of topics was discussedboth before the Tribunal and this Court.
•Application made to the Privy Council for special leave to appeal from thisjudgment was refused.—Ed.
FULLE J.—In re Soiith WestemBus Co., Ltd.
The Commissioner by his order dated,the 1 Oth'July, 1948, selected the-route described earlier with the southern terminus as BambalapitiyaRailway station and stated his reason for granting the licence to South-Western as follows :
“ This is a route almost parallel to the Qalle Road. At present peopleliving in the Thuretan Road-Flower Road area who wish to proceedto Pettah would naturally go to Galle Road and take the South WesternBus Company’s buses. This company I consider has the best claimsto this route and I allow it. ”
Appeals were taken to the Tribunal of AppeaL by High Level andGamini. Of the three members constituting the Tribunal only the Chair-man was in favour of affirming the order of the Commissioner and theTribunal directed that the licence in favour of South Western be revokedand a licence granted to High Level subject to the condition “ that theyrun non stop from Slave Island to the Pettah and the Pettah to SlaveIsland ”. This condition had to be.inserted because South Western wasat this time operating a service between Slave Island and Pettah andit would have been a breach of section 7 (1) of Ordinance No. 47 of 1942for High Level to provide a service along the entirety of Slave Island-Pettah route held by South Western. The order of the Tribunal was madeon the 26th March, 1649, and shortly after the reasons for the Chairman’sopinion and the reasons for the majority decision were delivered. Undersection 4 (6) (o) of the Motor Car Ordinance either Gamini or the Com-missioner had the right to ask the Tribunal to state a case but not SouthWestern because that company was not an “ Appellant ” before theTribunal. I am aware of the practice of the Commissioner to assist anunsuccessful respondent who had obtained a licence to put his case beforethe Supreme Court. Case No. 49 was stated at the instance of the Com-missioner. In effect the appellant was South Western and learned Crown.Counsel who appeared for the Commissioner was more an amicus curiaethan an advocate for the Commissioner. Case No. 72 was stated at theinstance of Gamini. The substantial question which I have to decide incase No. 49 is whether the Tribunal was wrong in reversing the order ofthe Commissioner who granted the licence to South Western. It is concededthat the Tribunal in giving the licence to High Level has not contravenedsection 7 (1) of the Ordinance for the reason that High Level has to run“ express ” from Slave Island to Pettah.
In case No. 72 Gamini took up the position before me that if the choiceof the operator lay between them and High Level there was no validreason for preferring the latter. They haveno quarrel with South Western.Counsel for Gamini stated that the fact that South Western was alreadyproviding a regular service on a part of .the route, namely, Slave Island toPettah, ought to give them a preferential right as against High Level whohad no prior licence to operate an exclusive.service between termini lyingwithin route No. 3. If the Tribunal was-wrong in setting aside the order ofthe Commissioner then it is obvious that there is only one claimant towhom the licence must be given and that is the South Western.
FULLE J.—In re South Western Bus Co., Ltd.
in regard to all four routes I have had to listen to arguments for veryanany days regarding the policy of the Ordinance in so far as one couldgather it from sections 4 and 7. It was the desire of the Counsel engagedin these oases that I should defer my decision until I had heard the■arguments touching all four routes. On behalf of Sigh Level and Gam inisetting out a summary of their respective contentions were sent tothe. I do not think that these oases stated on questions of fact should be'-decided on a meticulous consideration of a number of facts of minorimportance. I ha veto ask myself whether on vital matters the Tribunalfma erred to such a degree that its decision is unsustainable. I havefurther to remember that while the functions of the Tribunal are in thenature of a re-hearing and while it is invested' with wide powers undersection 14(£)pf the Ordinance the person on whom the duty is oast inthe first instance'to decide on the respective merits of claimants to a routeis the Commissioner and that the Tribunal is an appellate body. .
Before I enter on a discussion of the reasons embodied in the two•opinions of the Tribunal I desire to make a few observations of a general•character. The needs of the public are of paramount consideration. Itwould not be proper to extend the monopolies envisaged by the Ordinance“beyond the limits laid down. If a particular company can give the bestservice or if any arrangement would ensure the speedy transport ofpassengers, I do not think it should be shutout solely on the ground thatit is endeavouring to increase its profits by enlarging its operations. Inthe case,.of route No. 2 I have held that so-called oity operators are notalways to b<* preferred to those who enter the city from termini .situatedout^de^T^tpne company is running services on what are called inlandroutes® Pity and another along the coastal belt is indeed relevant butcannot, ifelfhy view, be decisive.
It ia-hbtgjd tOihappen especially in a crowded city that the grant ofa Licence tb^bperate a service close to an existing one would take away apart of the custom of the earlier licensee. I do not think it is a seriousobjection*.**} a new operator providing a service along a route near to an•existing one- that the old operator would suffer a diminution of profits.
I quite sftcede to the argument of learned Counsel for High Level thatit would be against the public interest if, as a result of the new licence, the-old operator has to forego profits to the extent of rendering hia serviceunreinunet&tive from a business standpoint. He would then have noincentive to provide an adequate and efficient service. I would, however,entirely dissent from the view that if a company operating on a route is.making large profits it has, so to speak, a vested right to maintain thoseprofits at the same level and that in the assertion of that right every newcompetitor must be shut out..'
A rough background to the case is provided by the following facts :
South Western buses enter the city of Colombo from the south alongthe coastal road. Between Wellawatte and Pettah it has a few shuttleservices of which one that figures prominently in this case is from SlaveIsland to Pettah which comprises a part of route No. 3. High Level buses■enter Colombo along an inland route the point of entry being a bridge.
34PULLE J.—In re South Western Ji us Co., Ltd.
which is on the south eastern boundary of Colombo. A number of HighLevel buses on entering Colombo proceed to Pettah along HavelockRoad, Reid Avenue, Alexandra Place, Union Place, Darley Road andMcCallum Road. The Tribunal of Appeal has awarded this companyroute No. 2 the termini of which are entirely within Colombo. This routeruns from the junction of Bambalapitiya coast road and New Bullers-Road to Maradana via Thurstan Road, Cambridge Place, Albert Crescent,Museum Road, Alexandra Place, Union Plaoe and Darley Road. Gaminibuses also traverse Havelock Road. One of their services to Pettah entersColombo from a village on the southern outskirts of Colombo calledKohuwela and runs parallel with High Level along Havelock Road,Reid Avenue, and Alexandra Place and falls into Maradana via DeansRoad. 1 gather from a list tendered to me of bus services within theMunicipal limits of Colombo—which, has been accepted as correct—thatHigh Level and Gamini also have what has been described as “ shuttleservices ” within Colombo.
Both High Level and South Western also possess licences limited tocarrying school children to various educational institutions in Colombo.These are in the nature of occasional licences.
On the days that the Ceylon Turf Club holds a race meet and on otherspecial occasions when it is desirable to-avoid congestion of traffic on.Reid Avenue the Gamini and High Level buses are diverted. They getbetween themselves practically the whole of the passenger traffic to theracecourse. Their buses are allowed to halt in the vicinity of the oldSinhalese Sports Club Grounds, i,e., close to the junction of TorringtonPlace and Alexandra Place. From this point it is a short distance for thepassengers to walk to the racecourse, especially to the side of the openenclosure.
It would be a convenient stage now to discuss the reasons given by themajority of the Tribunal for reversing the Commissioner’s order.
In the second and third paragraphs it is stated that when OrdinanceNo. 47 of 1942 was brought into operation High Level and Gamini were“ relegated ” to the less profitable inland rentes. With great respect I donot think thiB was a proper approach to the problem. When licences werefirst issued under the Ordinance it was done in accordance with itsprovisions. There was no arbitrary assignment of a lucrative route to oneoperator or a " relegation ” of another to a less profitable route. Onecannot but assume that each applicant’s case was dealt with on its merits.The third paragraph further states, “In ouropinion it would be as unfairfor the South Western Bus Company Limited to come inland and skimthe cream of the passenger traffic of these two latter companies from theBoilers Road roundabout to the Pettah as it would be for the inlandroute companies to make a proposal to tap the passenger traffic along thecoast road of which the South Western Bus Company Limited has nowa monopoly ”. Whether the grant of route No. 3 to South Western would“ pkim the cream ” of the passenger traffio .of High Level and Gaminiwould be a question of fact depending on the evidence which I shall lateroonsider. I must say that I did net gather from anything said by Gamini
PULLE J.—In ro South Western Bus Co., Ltd.
before me that they anticipated such a disastrous result. They arereconciled to South Western getting the licence for route No. 3. If, asI said before, a grant has the effect of a crippling financial blow to the oldoperator, that would be a ground for withholding the grant or for givingthe licence to the old operator, but no company should be shut out by alabel being attached to it. No operator has any particular claim exceptwhat the statute recognizes.
In paragraph 4 the right of South Western to provide a service fromSlave Island to Pettah or Fort is described as a “ lodgment ” in an inlandroute brought about by wartime restrictions. The paragraph proceedsthat although the war is over South Western, in addition to the use of theold coastal route through Galle Face, “ clung ” to its right to operate on.the Slave Island route. It seems to me that the majority of the Tribunalfelt that what would otherwise be a circumstance in favour of SouthWestern was nullified by their perversity in not quitting an inland routeto take their proper place along the coast. I must express my surpriseat this argument. Whatever be the reason South Western was lawfullyin possession of a licence covering a part of route No. 3 and they wereentitled to a just appraisement of this fact. Counsel for South Westernsaid that far from being a “ lodgment ” the Slave Island route was heldby its predecessor in title and moved to read some official documents insupport. Counsel for High Level objected and I upheld the objection,although my impression was that it was agreed by all parties that officialOdocuments the authenticity of which was not challenged could beproduced before me. I have adverted to this only for the reason thatCounsel for South Western asked me to record his application.
Paragraphs 5 and 6 appear to suggest that in the opinion of the majorityHigh Level had acquired a strong claim to route No. 3 and that the onlyobstacle or “ snag ” in the way of a licence being granted to them earlierwas the attitude of South Western in clinging to the Slave Island-Pettahsection. The document which throws light on this subject is 3 S W B 3 datedthe 6th September, 1945, which is a letter addressed to the Commissionerby High Level. At this date McCallum Hoad was not open to traffic andthe High Level buses on the run from Nugegoda (a suburb of Colombo)to Pettah proceeded via Maradana. High Level without permission fromany authority carried out an experimental express service throughFlower Hbad, General’s Lake Road and Slave Island via Fort to Pettah.High Level informed the Commissioner that after watching the experi-ment for a, week or two they would apply for a special licence to run anexpress service in the mornings, until such time as McCallum Road wasopened. A copy of this letter was sent to South Western for their obser-vation and they objected to the proposal by their letter 3 SWB 1. Theyhonestly feared that in spite of the service being said to bo express HighLevel’s employees might set down and pick up passengers on the SlaveIsland section.
In paragraph 5 the majority describe the Slave Island section held bySouth Western as “the snag” which obstructed the High Level BusCompany Limited from obtaining the licence contemplated in 3 SWB 3.They add, “ It is noteworthy that the South Western Bus Compan y
PTILLfi J.—In re South 'Western 'B-ua Co., Ltd-.
Limited strongly objected to the route claimed by the High Level RoadBub Company Limited at that time'1’ and Continued in paragraph 6 :
“ But it is this very route that the Commissioner has, forgetful of thepast, granted to the South Western Bus Company Limited …. ”
It seems to me that if the Commissioner had forgot the past it enuredmore to the advantage of High Level, for the running of omnibus services,be they express or not, experimental or otherwise, without a licence mustalways be regarded as a serious lapse. v'
Paragraph 7 deals with an argument by South Western based on theirholding licences to carry school children. I agree that the Tribunal wasfree to attach little or no importance to these occasional licences.
Would the grant of route No. 3 to South Western “ skim the cream ”of the passenger traffic of High Level and Gamini, especially on race days ?The majority have answered the question in the affirmative. The Com-missioner evidently did not think that the normal traffic to Pettah byHigh Level and Gamini buses would be affected to any marked degree.It is a matter of common knowledge that the South Western coastal routefrom Bambalapitiya to Galle Face Hotel runs through thickly populatedareas on both sides and it would be rash for ahyone to say that the Com-missioner was wrong in stating, “ At presentpbople living in the ThurstanRoad-Flower Road area who wish to proceed to Pettah would naturallygo to Galle Road and take the South Western Company’s buses ”. HighLevel submits that the South Western buses from Bambalapitiya couldtake passengers only as far as Fort and nOt Pettah and, therefore, theCommissioner is in error in stating that, passengers who wish to proceedto Pettah would take the South Western buses. Probably the Com-missioner had in mind what everybody knows to his cost today thatit is easier to walk from Fort to Pettah than waste time looking for a publicconveyance. Even those who own oars find.it easier to park them in Fortand walk considerable distances to attend to their business.
The Chairman of the Tribunal in his dissenting note said,
“ Secondly, there is much weight in tbapoint put by Mr. Colvin R. deSilva. Admittedly, for many months there has been heavy congestionon the coast road buses : there have been long queues waiting. Whatis the reason for that ? The most probable explanation is that most of theinhabitants of South Colombo on- both sides of the coast road are wontto make their daily journey to the Fort or Pettah by South WesternCompany’s buses. Therefore, to give another company the short newroute through General’s Lake Road will damage the South WesternCompany as much as the opposite will damage the High Level Companyor more. ”
Counsel for High Level has argued that I must accept the finding of themajority that the grant of the licence to South Western would result ingrave loss of custom to High Level and that my function is limited toanscverii g whether the majority were wrong for that reason in revoking
Pi n .T.V) J.—In re South Western Sue Co., Ltd.
the licence granted to Sooth Western. I regret I am unable to agree.There is no evidence that High Level’s takings on their “ parallel ” route.to Pettah from Nugegoda would be affected to such an extent that therunning of that service would be unremunerative. On the order made bythe Commissioner South Western did operate on route No. 3 roughly fromJuly, 1948, to March, 1949. Did High Level feel the impact of the newcompetitor ? Did the number of passengers carried on their Pettah servicego down ? What was the loss on the racecourse traffic % Records of salesof tickets ought to have bean readily available to throw light on these■questions. It seems to me that High Level did feel the need of supportingtheir allegations as to loss of traffic before the Tribunal with documentary-evidence. They produced a statement of income and expenditure (3 H L R13) for the period 1st April, 1948, to 28th February, 1949, certified by anaccountant shewing a loss of Rs. 25,820. As evidence of High Level’s loss■during the time that South Western operated on route No. 3 the documentis entirely unconvincing. In producing 3 HLR 13 before the Tribimal■Counsel for High Level is recorded to have said :
“ I produce the accounts of Nugegoda to Dehiwala, Maharagama toKirillapone via Embuldeniya and Maharagama to Town Hall viaEmbuldeniya. Tho4e are grouped for the purpose of accounts. Everyyear we had profits but this time we have run that section at a totalloss of Rs. 25,820. This is from April 1948 to February 1949 ….So this loss must have been due to the competition of last 7 or8 months. ”.
The minority say they are convinced that if South Western is allowed-the route the cream of the High Level passenger traffic would be skimmed.They could not have based that finding on 3 HLR 13.1 fail to see on whatother material they could have come to that finding.
That both High Level and Gamini will lose a part of the racecoursecustom is evident but not to the extent of being described as “ skimmingthe cream ”. If South Western bring race traffic from Pettah the pointnearest to the racecourse appears to be the junction of Flower Road andRacecourse Avenue. A passenger going to the open enclosure, not to thecovered stands, would have to walk along Racecourse Avenue, a partof Reid Avenue and then turn right at Maitland Crescent-TorringtonPlace junction. For this reason it seems to me that High Level and Gaminion their Pettah routes have an advantage in relation to race traffic overSouth Western operating on route No. 3, for the two former companies canput down their race passengers at a more convenient spot. I have referredto what is comparatively a minor circumstance to show that the descrip-tion “ skimming the cream ” of race traffic is exaggerated.
Another reason for setting aside the Commissioner’s order is containedin the latter part of paragraph 11. It is said that some day South Westernmay apply for a licence to ply on a part of route No. 3, as a shuttle service,from Bullers Road roundabout to Pettah and that if it were given a seriousimpasse would be created. I am clear in my mind that a contingency sue has this ought not have influenced the Tribunal.
PULLE J.—In re South Western Bus Co., Ltd.
' On an examination of the reasons given by the majority I am satisfiedthat they have erred in setting aside the aider of the Commissioner. I do-not think it is necessary to examine in detail the reasons given by the-Chairman for affirming the Commissioner's order. He rightly placesemphasis on the Commissioner’s function to select a route in his discretionand to give the licence to an operator who -will best serve the needs of thepublic. I cannot say that the Chairman was wrong in drawing the inference-that, because South Western had as many as 138 new buses of the Nelsontype and 48 old of the same type as against High Level’s 45 Nelson ofthe new type and 57 of the old type, the former could render a moreefficient service than the latter. I note that in granting route No. 2 toHigh Level the Tribunal were unanimous in asserting that one of thereasons for preferring High Level to Gamini was that the former hada larger number of buses of the Nelson type. I agreed with that view inmy judgment on route No. 2.
The Chairman thinks that High Level’s employees may be guilty ofevasion of the law in picking up passengers on the Slave Island sectionand that would be a reason for preferring South Western. Taken byitself I do not think it is a good reason, but the fact that South Western iaalready providing a service on the Slave Island section of route No. 3is a point in their favour and to that extent I agree with the Chairman.
In the result I find that the Tribunal was not justified in reversing theorder of the Commissioner granting the licence to the South Western BusCompany Limited.
There is no Tribunal of Appeal constituted under the Motor CarOrdinance, No. 45 of 1938, to whom I canremit these cases stated. I do-not think I have the power to do so under section 246 (4) (a) of the MotorTraffic Act, No. 14 of 1951, as it deals only with " appeals ” and that canmean only appeals to the Tribunal- and not cases stated undersection 4 (6) (a) of the Motor Car Ordinance, No. 45 of 1938. My deter-mination on these cases stated is that the application of South Westernfor a road service licence under Ordinance No. 47 of 1942 in respect ofthe third route determined by the Commissioner, but subject to themodification of the southern sector indicated by the unanimous opinionof the Tribunal, should be granted with the result that I direct the Com-missioner of Motor Traffic to grant to the South Western a stage carriagepermit under section 246 (5) of the Motor^Tcaffio Act, No. 14 of 1951.I am aware that there is no express provision authorising me to directthe Commissioner to grant a stage carriage ^permit; but as the duty togrant the permit is laid down in mandatory terms in sub-section 5 I donot see any legal objection to issuing the direction. It has at least theadvantage of avoiding new and fruitless litigation in Ceylon over thisroute.
As arranged by Counsel the question of costs is left over for furtherargument.
Order of Tribunal of Appeal set aside.
IN RE SOUTH WESTERN BUS CO.LTD et al