RENTAL CAR BUSINESS

Press, Volume LXXXI, Issue 24740, 4 December 1945, Page 6

RENTAL CAR BUSINESS

LICENCE APPLICATION OPPOSED ALLEGED MISUSE OF TRIBUNAL The profits, made-in the rental car business, its suitability ior rehabilitation, and the legality of a director in one company applying (for himself and his serviceman son) for a licence to establish a new business operating 10 rental cars from premises in Christchurch were among topics debated for three hours before Mr T. H. Langford, No. 3 Transport Licensing Authority, at a sitting yesterday. The allegation was also m=de that the tribunal'was being made “a chopping-block for the ventilation of a private grievance." The applicant was J, D. E. Winskill (Mr W. R. Lascelles), a farmer, of Cheviot. The application wits opposed by Mutual Rental Cars, Ltd. (Mr K. W. Walton), Large’s, Ltd., and Archibald’s Garage. Ltd. (Mr R. A. Young), and C. L. Rhodes (Mr K. G. Archer). Mr Lascelles said that Winskill made the application (for a licence covering 10 vehicles, an economic unit) intending partnership with a son serving in Italy, and about to return. Rehabilitation of the son, who was attracted to motors and mechanics' rather than to fanning. w;s the primary object. Existing licences. Mr Lascelles said, seemed to be shared by a number of companies—Large’s, Ltd., Mutual Rental, Gold Band Taxis, Archibald’s, and C. L. Rhodes. Winskill. sen., was a director of Large’s, Ltd., a substantial shareholder, but had no control of that company’s policy. He was not conlemplating anything prejudicial to I/nT?' 1 ;. Ltd., out r-"u--.hl the licences jlVo:.; '•.-v n ;r.T:'-.’. ; ,r. *.h.ro' yet j■' Lavj/jV, TM, wouL nj' be' u.vjov .ceu or; : .ore than if the licences were gr.nted to a competing stranger; indeed, there was a spur to co-operation in the fact of Winskill holding shares in this company. The applicant -was within his rights to apply, and there was nothing of a combination or conspiracy involved, Mr Young said that the application would be contested to an appeal, if necessary, because it was considered that Winskill was in a fiduciary position as far as Large’s, Ltd., were concerned. and had no right to apply. Value of Holding Winskill said that Large’s. Ltd., held 35 licences, but about 1,7 cars were operating at present. He did not seek that the company should have to give up any licences. Rental cars were very much in demand, about 20 per cent, of applicants being declined, according to his observations. To Mr Young, Winskill said that he had applied for the licence about a week ago, without actually consulting his son. He admitted that his 400 £1 shares, or 40 per cent, holding in Large’s,. Ltd., was to-day worth several thousands of, pounds; and that he would, not take £4OOO for his interest; that he" had received about £4OO in director’s fees in three years; that he had .disagreed . with Large’s policy; that by a share transference, when he had been pleased with the way Large conducted the business some years ago, Large had ended with 500 shares: Mrs Large 100 shares, and he himself with 400 shares (he originally held 500). He had at the time given 50 to Mrs Large. The undertaking had been that the shares would not be used a gains. l , him. To Mr Walton, Winskill denied that he had any axe to grinq with Large. He told Mr Archer- that he had financed the flrm v in the first place. Asked if he was'in “a big way” in farming, he said that his interest covered about 4000 acres (including his own farm), but that the son, one of a family, had previously stated that he would not be interested in farming. To Mr Lascelles, Winskill said that if he and Large had been co-operating in harmony, he might have taken the opportunity of establishing the son' in that business. Commenting on counsel’s questions, Mr Lascelles said it was very natural that any man with a son to rehabilitate and with the Sort of bal-ance-sheet this firm produced-, would want to v establish the boy in such a line. , Alleged Abase of Tribunal . Mr Walton said he could not understand how it was possible to contend in the light of the evidence that Large and Winskill could operate in close harmony if Winskill’s application succeeded. and if they . did it would amount to the beginning of a combine. Mr Walton also, submitted that the tribunal was being used as a chop-ping-block for the ventilation of a private grievance. He said there was no evidence of an express desire by Winskill’s son to enter the rental car business; that .fiirst consideration should be for firms whose licences had been reduced by lapsing or refusals through war conditions; that the application was without merit, and that the applicant had shown a complete lack of frankness. Mr. Young said that there had clearly been disagreement on policy in Large’s, Ltd., but on the face of it Large’s conserving, policy had been wise. Winskill, as a minority holder, had to bow to that policy. Mr Young added that to grant the application would be to reduce the tribunal to a farce. He submitted that rehabilitation did not arise in the case—that the son knew nothing of the application and was being used as a makeweight. Offered £2: l a Share After comments by Mr Lascelles on evidence to the effect that rental car businessmen did not think that type of business the best for rehabilitating servicemen, Large, questioned by Mr Archer, said that he had not long ago been offered £22 a share (for £1 shares) and had declined the offer. Large added that deferred payment of dividends partly accounted for the ‘‘false share value," and that the profit was not so remarkable when it was considered that interest ■ had been compounding over several years. A copy of the firm’s balance-sheet was submitted to the Authority, but details were not disclosed. Mr Lascelles said that any theory that the application was made to “get one back on” Large showed an absence of realism. It was patent that the rental - car business had been vfery orofitable indeed, and as licences were being granted it was natural for a businessman to try to get some to establish his son. It was a highly profitable business., so why should not some of the soldiers be allowed into it. he asked. Mr J. S. Haywood, district officer of the Transport Department, said he had not found the Rehabilitation Department, enthusiastic towards this type of business. He said he could call a representative of the department. Mr Langford: I think that would be unfair. He does not know as much about it as I do. Our department doesn’t know as much as it should about it.