Neutral Citation Number: [2009] UKUT 264 (AAC)

Appeal No.  2009/485

IN THE UPPER TRIBUNAL            

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

ON APPEAL FROM THE DECISION OF

Joan Aitken TRAFFIC COMMISSIONER for the

SCOTTISH TRAFFIC AREA Dated 20 July 2009

Before:

Judge Frances Burton

Leslie Milliken

Stuart James

Appellant:

B. KENNEDY COMMERCIALS LIMITED

Attendances:

For the Appellant:  Tim Nesbitt of Counsel

Heard at:                       Eagle Building, Glasgow

Date of hearing:           27 October 2009

Date of decision:         27 November 2009

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that this appeal be ALLOWED and the case remitted for rehearing by a different Traffic Commissioner or Deputy.

REASONS FOR DECISION

1.           This was an appeal from a decision dated 20 July 2009 of the Traffic Commissioner for the Scottish Traffic Area, when she refused an application by B Kennedy Commercials Limited for a standard national goods vehicle licence.

2.           The factual background appears from the documents, the transcript of the public inquiry and the written decision of the Traffic Commissioner and is as follows.

(i)               Brian Kennedy was originally in partnership with a Mr Neal Brooksbank when he first had an operator’s licence in that partnership entity, and the partnership subsequently changed to Mr Kennedy and a Miss Melissa Ross. The partnership had an authorisation for 8 vehicles and 7 trailers. The Transport Manager was Shonagh Kinnaird. The partnership then applied to increase the authorisation to 14 vehicles and 13 trailers. At this stage there was no evidence of any adverse regulatory history but the financial evidence suggested that there had been a change of entity when Melissa Ross was replaced by Miss Darlene Bell. The operator was therefore called to public inquiry to consider the issue of entity and the application.

(ii)              The public inquiry to which Mr Kennedy had been called (“the first public inquiry”) took place on 10 December 2008 and was conducted by the Traffic Commissioner who asked for an account of the different partnerships, having received a letter from Melissa Ross asking to be removed from the licence and making personal allegations against Mr Kennedy. Mr Kennedy had said in answer that he had sought to replace Melissa Ross’ name with Darlene Bell’s when he knew the former was leaving, and then commented “She wasn’t a partner in the business as such” although he confirmed that she did do the bookkeeping. Upon hearing this, the Traffic Commissioner had concluded that he had been operating as a sole trader, that he had therefore misled the Traffic Area Office and had promptly revoked the licence,  “because there’s been a change of entity and you’ve misled us”, apparently ignoring Mr Kennedy’s protest that he had misunderstood the distinction between his personal and business relationships and should have read more into the significance of the entity in which an operator licence was held. As he had formed a limited company, the present Appellant, a new application was made for authorisation for 8 vehicles and 8 trailers, recording the previous revocation and the reason for it, nominating 2 operating centres and Shonagh Kinnaird as Transport Manager. Mr Kennedy then wrote a letter of complaint to VOSA and the Traffic Area Office complaining of the conduct of the public inquiry in which the Traffic Commissioner had read out Miss Ross’ letter which made allegations against him of a personal nature,  whereupon the Traffic Commissioner had also made personal comments about his private life. He had also appealed to the Transport Tribunal, which dismissed the appeal as there had in fact been a change of entity, despite Mr Kennedy’s misunderstanding of the significance of the distinction between the respective status of a sole trader, a partnership and a limited company as the entity in which an operator licence is held.

(iii)            The application for a new licence in the name and entity of the limited company was then called to a further public inquiry (“the second public inquiry”) and this was held on 14 May 2009, again with the Traffic Commissioner presiding. At this stage there was a further application to replace the Transport Manager Shonagh Kinnaird with a new one, David Donald. At the opening of the public inquiry there was immediately an issue about the two nominated operating centres. Mr Kennedy stated that he had put them down on the form as he had used them before and he had “thought they would be OK” but it appeared that there were no formal arrangements for him to use at least one of these locations. Secondly he had since setting up the limited company appointed 2 directors, Mr Peter Frankowski and his mother, Mrs Linda Kennedy but had not notified the Traffic Area Office, and acknowledged that he should have done so. The Traffic Commissioner then appears to have become irritated with Mr Kennedy, commenting “Why don’t you start to tell the truth? Remember I’ve met you before, right? And I’m watching your facial expressions and your smirks here today, right? So I’ll just give you a warning, you can answer whatever you like, right, and I’ll take a view of you … we expect the truth to be told here”. Shortly afterwards she raised the subject of the letter of complaint against her in respect of the previous public inquiry and called for the letter to be retrieved.

(iv)            The Traffic Commissioner had then questioned the proposed new Transport Manager, Mr Donald, who did not appear entirely happy that he had accepted that role as Mr Kennedy had also admitted unauthorised use of vehicles, albeit at a low level, and subsequently on 17 May 2009 (after the public inquiry had been adjourned) Mr Donald wrote to say that he was withdrawing his application to be the nominated Transport Manager. However at the resumed public inquiry on 10 July 2009 a Mr John Arthur Potter had been proposed to take on the role of Transport Manager and he gave evidence of his experience on a number of licences through consultancies. He outlined his plans for spending a day a week on the job in Fife (although he normally resided in Rutland), that he had set up an account with Tachodisc to undertake tachograph analysis and was already planning to ensure drivers were properly trained. Following the conclusion of the hearing Mr Potter wrote to the Traffic Commissioner further clarifying his proposed involvement with the operator and offering references which could be taken up with named Traffic Examiners at VOSA.

(v)             Final submissions made by the operator’s solicitor (Mr Glover of Marshall Glover, solicitors) who had been representing the Appellant company, acknowledged that Mr Kennedy “had made a number of bad decisions, in relation to the confusion in past entities, changes in directorships and even (low level) unauthorised use, but submitted that “lessons had been learned” (though acknowledged that they should have been learned more quickly). However, he also submitted, there had never been any adverse findings about repute, that Mr Potter had the skills to satisfy professional competence and that the Appellant company could offer an undertaking about audits by a suitable third party. At this point the Traffic Commissioner again raised the issue of the letter of complaint interjecting “And I forgive him that letter”. The Traffic Commissioner’s decision was then reserved.

(vi)            The written decision, dated 20 July 2009, found that Mr Kennedy had misled her over entity issues under the old licence, that his letter of complaint had “introduced a sour note” and was “rather unpleasant”, that he had provided false information about operating centres, had admitted unauthorised use and confusion over directorships, that she “could not trust” Mr Potter and rejected him as Transport Manager. She then refused the application, commenting that she attached “scant weight on the letter of complaint”, because she was “not a vindictive individual”, but that she did “not trust Mr Kennedy”, a man “who does not live with the truth”.

3.           At the hearing of the appeal the Appellant company was represented by Mr Tim Nesbitt of counsel. His first ground of appeal was the significance that the Traffic Commissioner had attached to the letter of complaint about the earlier public inquiry. He submitted that while she stated that she attached “scant weight” to it she should not have had it in mind at all as it was quite inappropriate for letters of this kind to have any bearing whatsoever on a hearing of a public inquiry considering a new application. He referred to the well known passage in Porter v Magill, [2001] UKHL 67 in which Lord Hope, with whom the other judges agreed, refined the test to be applied for determining apparent bias

“The question is whether the fair minded and informed observer, having considered the facts, would conclude that there was a real possibility that the Tribunal was biased”.

In the circumstances, he submitted, natural justice required that the decision should not be allowed to stand.

4.           Mr Nesbitt’s second point was that the Traffic Commissioner should not have continued with the hearing once the issue of the letter had been raised, as natural justice demanded that she should have recused herself.

5.           Mr Nesbitt’s third point was that the Traffic Commissioner had attached excessive weight to the previous revocation and had exercised excessively harsh judgment about Mr Kennedy’s honesty. She had adjudged his obvious confusion about entities to be dishonesty and had categorised his naivety and disarming honesty in admitting things that went against him as a finding that he did “not live with the truth”.

6.           Mr Nesbitt’s fourth point was that she had been unjustified in finding that she could not trust Mr Potter, for which there was no basis. He was experienced and genuine.

7.           Mr Nesbitt requested that the appeal be allowed and the matter remitted for rehearing by a different Traffic Commissioner.

8.           We agree with Mr Nesbitt. While it is evident that there was a messy entity history and Mr Kennedy had made a number of mistakes (of some of which the active presence of a capable Transport Manager would be likely to preclude any repetition), the issue is that he should have had, and be seen to have, a fair hearing. The Traffic Commissioner had been satisfied with financial standing and with an experienced Transport Manager in place it would be fair that Mr Kennedy should now have his arrangements and proposals considered in an open minded manner by another Traffic Commissioner or Deputy who has not been previously involved.

9.           The appeal is allowed and remitted for rehearing by a different Traffic Commissioner or Deputy.

Frances Burton

27 November 2009