Many businesses require statutory licences in order to
operate within the law. These licences are effectively legal permits to enable
an operator to conduct the business. The reasons for creation of such licences
under the particular statute may be to regulate the operations of a particular
business either by restricting the types of persons able to conduct that
business to those properly qualified, or to restrict the number of persons in a
particular area who may conduct such business. Such a licence may be described
in a variety of ways.
For example, in Queensland
Retail Milk Vendors' Association v Deacon, a licence to operate a milk-run
was referred to as a lease. It was not a lease in the true sense but merely a
right to operate that run for a limited period in return for payments. The
right to a licence is certainly analogous to a property right. However, much
might depend upon the nature of the right and how it is created.
Similarly, a licence to operate a business would normally be
treated as part and parcel of the property being sold particularly where the
question arose as to whether it was part of the conveyance of property of the
business which might be dutiable. For example, in Commissioner of Stamp Duties (NSW) v Yeend, the court examined the
right to sell refreshments in two reserved enclosures at race meetings at
Warwick Farm racecourse. This right was held by the High Court to be no more
than a contractual right and not a property right. It was analogous to a
personal right to place posters on a wall or to take photographs. The effect of
that decision would be to discriminate between the contract which brings into
existence a merely personal right, not itself being a right of property, and
merely a right personal to that particular licensee. This has been held in
respect of a statutory licence where the object of the statute was to licence a
particular person to conduct a nominated business and not to create a right of
property.
Whilst a statutory licence could never attract customers, it
operates to the holder's advantage by ensuring that by a lack of choice, the
number of people issued with these licences will be restricted. Because it does
not influence or secure custom in any other way it is probably wrong to refer
to such a licence as property although its possession certainly enhances the
goodwill of a business.
A franchise right, although contractually conferred, could
also operate as a property right depending upon the nature of the franchise.
Whilst there is a degree of judicial difference of opinion as to the true
nature of these rights, they are plainly analogous to property although
technically not goodwill, but are nonetheless valuable rights. There are many
cases dealing with the question of whether or not a liquor licence, which is a
grant of a statutory monopoly to sell liquor, is part of the goodwill of a
business. It has been suggested that goodwill attaches to a statutory monopoly
right and that whilst such a right can be dealt with separately from goodwill,
it is not usually severable from the goodwill for practical purposes. This is
so in the sense that the goodwill attaches to a species of property and the
goodwill can only be dealt with attached to that statutory right. However, that
is not to say that the separate statutory right itself cannot be the subject of
a separate bargain and sale apart from the goodwill.
It is interesting to note that a statutory licence granted
by a government agency authorising the operation of a business may give other
rights to that licence holder. For example, in Ball v Consolidated Rutile Ltd,
commercial fisherman (the plaintiffs) were granted licences under fishing
legislation of Queensland which authorised them to take prawns for commercial
purposes by the use of nets from licensed fishing vessels in specified waters.
The activities could not be conducted without such licences so the plaintiffs'
authority to conduct their business derived entirely from legislation.
The defendants conducted sand mining operations on an island
adjoining the fishing grounds. As a result of their operations part of a large
sand dune slipped into the water taking with it a great deal of root masses and
other vegetation which was carried into the fishing grounds. The plaintiffs
complained that the damage had caused destruction to their fishing equipment
and it was no longer economical to fish in the waters for which they were
licensed to fish. The plaintiff fishermen claimed damages against the
corporation for public nuisance by failing to take reasonable precautions to
prevent slippage and causing economic loss to the plaintiffs who had to cease
fishing in the area in which they were licensed.
In the result Ambrose J, who found that the defendants were
not liable in public nuisance, did recognise that there may have been a public
right conferred by the statutory provision which licensed the fishermen? Again,
the licence was not a recognisable species of property but arguably gave
certain common law rights to the holders.
Thus, it may be seen, that a holder of a statutory licence
may logically form part of a specific class of persons who may be in a position
to take action to restrain others from interfering with the rights granted by
such statutory licences. In different circumstances from those in which the
fishermen had found themselves, such persons may sustain claims for loss,
including economic loss, if that loss is suffered through infringement of that
statutory right. The right, as was found in the above case, need not be
necessarily described as a property right.
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