S.M. attacks Ministry deal

Press, 12 April 1979, Page 10

S.M. attacks Ministry deal

PA Hamilton An agreement between the troubled transport firm, Nationwide Transport, and the Ministry of Works has been harshly criticised in the Magistrate’s Court at Huntly. The agreement, to “forbear” from , collecting §214,034 in ’ road-user charges owed by the company, had earned the Ministry nothing but the “opprobrium” of honest transport firms, said Mr T. B. Mooney. S.M., in a reserved decision. The Magistrate said that the “most unusual” document was signed by some individual in the Ministry' and William Mathew Burns Thompson on behalf of the holding company, Haulaways Corporation, and for the Nationwide group on November 9, last year. It was entered into in consideration of “the forbearance of the Crown to take immediate steps” to recover the amount owing. An officer of the Ministry had no rights to compromise criminal prosecutions, let alone bind the Crown, especially when the prosecuting authority was the Ministry of Transport, said the Magistrate. Nationwide was appearing for sentence on a charge of running a vehicle without a distance licence. The Magistrate fined the con pany $lOOO. Road-user charges due from the company had been estimated at §956. The Magistrate said that from April 1, 1978, goods service vehicles were required to have hubodometers fitted.

The company ordered 201 of these on March 23. last year, and sent 42 meters it already owned to the supplier for serial numbers to be fitted, in accordance with the law. They were still there. The Company applied on March 31, last year for user licences for its trucks and trailers. More than §30,000 in fees was paid but the mileages specified in the licences went from 0 to between 1000 and 5000. These licences were obviously intended for the hubodometers, said the Magistrate. These licences bore no relation to the individual vehicles’ speedometers. If the hubodometers had been available and if the company had applied for fresh distance licences at the end of April that would have been the end of the matter, said the Magistrate. But until the end of July the operators had to measure distances by speedometer. And after March 31 the company paid no more road tax. It kept an estimate of distance covered by its vehicles, and by the end of June the amount of tax owing was estimated at §120,107. The company paid no more road tax’ until September 20. when its estimate of the amount outstanding was $127,819. “That would seem to be an underestimate, but that figure was accepted by the Ministry of Works,” said the Magistrate. The company was in serious financial trouble at the end Of April last year

and did not take out distance licences then but sought special arrangements with the Ministry of Works. But it was not until the Ministry said the company would have to make the special arrangements with its own bankers, that the company applied for fresh licences. “The writing was on the wall six months before the axe fell.” The company then signed the “most unusual document” with the Ministry of Works on November 9. The “arrangement” for payment of the outstanding road tax became worthless within three weeks when receivers were appointed for the group. At September 30 the liabilities of the group exceeded the assets of 57.6 M by §911,000. “Naive the actions of the officer of the Ministry of Works may iiave been in entering into the arrangement: those of the group director are rather more questionable,” said the Magistrate. There had been no reason why the group could not have paid the tax month by month on the records it had kept — but for the fact it did not have the money. Mr A. E. Hilton, receiver for the National Bank, debenture holder of Nationwide Transport, had said the company was in poor financial condition at December i last year. On a realisation then the unsecured creditors would have got nothing. His list of unsecured creditors included, the

$127,819 road-user tax, $44,220 diesel tax, and 5214,090 P.A.Y.E, tax retained by the company. Mr P. B. Coote. receiver of the assets of the holding company, Haulaways Corporation, had said he expected the $911,000 deficiency to have risen to SI.SM by March 31. The Magistrate said it had been stated that if more than nominal penalties were imposed on the company the receivers would dispose of the assets and there would be nothing for unsecured creditors. “Did 'I believe there was any hope of the ‘arrangement’ being honoured, even in part, the present financial management would have to be taken into consideration,” he said. Such a hope was “ephemeral.” Where a carrier used a goods-service licence and deliberately refrained from taking out a distance licence. or flagrantly exceeded an authorised mileage, or failed to connect a distance recorder, there was no automatic debt to the Crown, said the Magistrate. In that respect the roaduser charges differed from the previous heavy traffic licences. The validity of the voluntary “debt” assumed by Car Haulaways of $214,034 might well be challenged by other unsecured creditors at a wind-ing-up. There was, however, certainty of liability when a court imposed penalties related to deliberate and repeated breaches by the company, said the Magistrate.