A Black Top taxi driver has won a judgement in B.C. Supreme Court after the company tried to jack up his dispatch-system fee.
On September 30, Justice Robert Powers awarded Ranjit Singh Athwal $500 per month plus court-ordered interest dating back to February 2009, when the additional fee was imposed. Athwal was also awarded costs.
"Black Top was simply trying to avoid its contract with Athwal and charge a licensing fee under the guise of a dispatch system fee," Powers wrote in his decision.
Athwal had a relationship with Black Top since the late 1980s. In 2008, he reached an agreement with the company to operate a van taxi. He obtained it with the help of financing from the company.
Powers noted in his ruling that van taxis are "less desirable than the sedan taxis" because they are larger, heavier, and more expensive to operate.
"The drivers often have to assist the passengers getting into and out of the vans in wheel chairs and securing the chair in the van," the judge added. "They are not entitled to charge nor have the meter running before the vehicle is placed in motion or after they arrive at their destination."
As a result, Black Top waived its usual licensing fee for operators of its van-taxi fleet. They were still required to pay a $1,175 monthly dispatch-system fee, which helped cover the cost of the company's operations plus advertising.
According to the decision, Black Top had a contractual right over the following five-year period to increase the dispatch-system fee. There was en editing error in the contract, which stated that the fee could be increased on "thirty (60) days written notice".
"On November 27, 2008, Black Top sent a letter to all van lease operators, which would include Athwal, stating that effective January 1, 2009, a lease payment in the amount of $1,000 per vehicle per month will be charged," Powers wrote. "Black Top had no authority to impose such a charge."
The judge added: "No action was taken on that letter."
However at the end of December 2008, Black Top instructed van-lease operators that their dispatch fees would rise by $500 per vehicle, effective February 1, 2009. Those who leased vehicles for half days would have their dispatch fees hiked by $250 per month.
Powers noted two concerns. First, it was unclear in the contract whether Black Top had the right to increase the fee on 30 days notice. However, the bigger issue was Black Top's decision to impose the higher dispatch fee only on the van-lease operators.
"Black Top’s justification was that there were increased costs," Powers wrote. "The van lease operators were already getting a better deal than other operators because they did not pay a license fee. Even with the increased dispatch system fee they still paid a total amount less than other operators that were paying a license fee and a dispatch system fee."
Athwal's lawyer David Unterman, on the other hand, argued that Black Top breached its agreement not to charge a licensing fee "by essentially charging a licensing fee and calling it an increase in the dispatch system fee".
"In the agreement, the parties used the words 'license fee' and 'dispatch system fee'," Powers pointed out in his ruling. "If they were indistinguishable, as argued by Black Top, there would have been no purpose to use different words."
The decision noted that there is another action filed by Black Top taxi operators against the company called Hekim et al v. Black Top Cabs Ltd.
"The lawyers were going to reach some sort of an agreement as to how the decision in Athwal affects the Hekim matter," Powers wrote.
How the taxi business works
The ruling offered insights into the relationship between cab drivers and the company.
After paying fees, an operator receives all of the revenue, and is responsible for fuel costs, repairs, licensing inspections, and insurance. The car is owned by the licensee.
In return, the company provides a computerized dispatch system, a two-way radio, a meter, and a taxi camera. In addition, Black Top agrees to allocate trips in a "fair and reasonable" manner.
Powers noted that Black Top has "A" shareholders and "B" shareholders. The company holds the taxi licences, but the shareholders are entitled to use them.
Shareholders don't pay licensing fees to the company. These licences can only be transferred with permission of the board
Licences are often split into a day shift and a night shift. According to an affidavit filed by Amrik Mahil on behalf of Black Top, a day-shift licence is worth between $260,000 to $280,000. A night-shift licence is valued at $245,000 to $260,000.
Follow Charlie Smith on Twitter at twitter.com/csmithstraight.