Grey (t/a Citytax) v City & County of Swansea

Under the Public Passenger Vehicles Act 1981, a vehicle is used for carrying passengers throughout the period when passengers are on board for transport from one place to another. The requirement is engaged while the vehicle is stationary before departure and after arrival, not only while it is moving. The driver’s instruction to wait for an operator’s disc does not change that conclusion.

A contractual term allowing termination for use of a public service vehicle without an operator’s licence disc refers to the statutory obligation to display the disc. Read in the context of the contract, it is not ambiguous and is not confined to a disc having been allocated elsewhere. A technical breach remains a breach for these purposes.

The appellant operated school buses for the respondent Council under a contract containing a termination provision for use of a public service vehicle without an operator’s licence disc. On one occasion, children boarded a bus parked on an adopted highway before the missing disc arrived. The driver did not move the bus until the disc had been delivered and displayed.

The Council treated the circumstances as a breach and terminated the contract. The Swansea County Court, before Mr Recorder Thom QC on 5 July 2012, dismissed the appellant’s claim for a declaration and damages. The appeal concerned whether the stationary bus was being used for carrying passengers under the Public Passenger Vehicles Act 1981, and whether the contractual termination provision applied.

1. Appeal dismissed. Richards LJ delivered the leading judgment. Davis LJ agreed entirely and Lloyd-Jones LJ also agreed.
2. Under sections 12(1) and 18(1) of the Public Passenger Vehicles Act 1981, the relevant question was whether the bus was being used on a road for carrying passengers for hire or reward. A vehicle is used for carrying passengers throughout the period when it has passengers on board for the purpose of transporting them from one place to another. That includes the period after boarding but before the vehicle moves off, and the period after arrival but before passengers alight.
3. The statutory expression did not require actual movement at every moment. The driver’s instruction and intention not to move until the operator’s disc arrived did not alter the character of the use. The statutory policy supported this construction because the licensing and display requirements facilitate enforcement and enable passengers to identify properly licensed vehicles.
4. The authorities concerning carriage of goods or the meaning of carried in different statutory contexts gave limited assistance. GH Renton & Co Ltd v Palmyra Trading Corporation of Panama [1957] AC 149 was heavily dependent on the Hague Rules context. Roberts v Morris [1965] Crim LR 46 concerned a vehicle travelling to or from a place where goods would be carried and did not determine the position once passengers had boarded. Axa Insurance UK Plc and Norwich Union Insurance Limited [2008] Lloyd’s Rep IR 122 was likewise context-specific. The Theft Act authorities concerning “take” and “carried” involved different statutory wording.
5. The contractual reference to use of a public service vehicle without an operator’s licence disc meant use without displaying a disc as required by section 18. Applying the approach in Mannai Investments Co Ltd v Eagle Star Life Insurance Co Ltd [1997] AC 749 and Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, the provision had that meaning to a reasonable reader in the context of the contract as a whole. It was not ambiguous, so the contra proferentem rule did not assist the appellant.
6. The breach was technical and had not led to a prosecution, but that did not affect the Council’s contractual entitlement to terminate. The appellant was ordered to pay the respondent’s appeal costs, summarily assessed at £9,250 inclusive of VAT, at £2,000 per month with the first payment due within 21 days.

• Court of Appeal (Civil Division): [2013] EWCA Civ 1057, 27 June 2013. Unanimously dismissed the appeal and upheld the conclusion that the Council was entitled to terminate the contract.
• Swansea County Court: On 5 July 2012, Mr Recorder Thom QC dismissed the appellant’s claim for a declaration and damages.