QUESTION OF PRICE

Sun (Auckland), Volume 1, Issue 8, 31 March 1927, Page 13

QUESTION OF PRICE

SALE OF MOTOR FLEET CASE FOR FULL COURT (From Our Own Correspondent.) WELLINGTON, Wednesday. In pursuing his advocacy for the Royal Motor-Omnibus Company in the dispute with the Auckland City Council over the purchase of the company’s fleet of 28 buses, Mr. M. Myers, K.C., said before the Full Court yesterday afternoon that the plain purpose of certain sections of The Motor-Omnibus Traffic Act was clearly to ruin the business of motor services. This was particularly applicable to the section which stipulated that buses must charge a greater fare than the trams travelling along the same route, because the tramway authorities could raise the fares to 6 d or even 9d in order to make bus travelling impossible. In dealing with the question of purchase, Mr. Myers quoted section 15, which said that "in computing the price in respect to any undertaking, w'hether such price was arrived at by agreement or by the Compensation Court, no amount should be allowed for goodwill, but the price should be the fair value (not the market value, said Mr. Myers) as for the purpose of motorbus service, of the buses and for the property used exclusively for the undertaking.” The real point between the parties as seen by Mr. Myers was as to whether on the purchase of the undertaking the whole of the buses and plant and assets should be taken "in globo,” or whether each item should be valued separately and compensation limited accordingly. Mr. Meredith referred to what he termed “fleet value,” and said the price for a fleet of buses of uniform type and character would be expected to be greater than that of a homogeneous collection of motors, because of spare parts, convenience cf accommodation, and familiarity of drivers with the motors themselves. Mr. Stanton, in advancing the contentions of the City Council, said he interpreted section 15 of the Act to mean that each omnibus was to be valued separately on the basis that there i 3 a service in which it may be utilised. It did not provide for taking over a business as a going concern. He submitted also that if it be held that the section contemplated taking over a going concern then it was to be taken over at the valuation of the omnibuses and other property without any addition. The corporation was prohibited from paying anything for goodwill and also from paying anything more than fair value of the buses and property.