Neutral Citation Number: [2010] UKUT 171 (AAC)

 

Appeal No. T/2010/16 & T/2010/21

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

 

ON APPEAL from the DECISION of Richard Turfitt

TRAFFIC COMMISSIONER for the Eastern Traffic Area

Dated 26 January 2010

AND from the DECISION of Philip Brown

TRAFFIC COMMISSIONER for the South Eastern and Metropolitan Traffic Area

Dated 24 February 2010

 

 

 

Before:

His Hon. Michael Brodrick, Judge of the Upper Tribunal

George Inch

Stuart James

 

 

Appellants:

ALAN COOPER t/a ALAN COOPER HAULAGE (Appellant in T/2010/16)

&

JEANETTE WOOTTEN t/a WOODHOUSE FURNITURE (Appellant in T/2010/21)

 

 

 

Attendances:

For the Appellant: Alan Cooper appeared in person for the first Appellant and Jeanette Wooten appeared in person for the second Appellant.

 

 

Heard at: Victory House

Date of hearing: 23 April 2010

Date of decision: 11 May 2010

 

 

 

 

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that each appeal be ALLOWED.

 

 

 

 

 

REASONS FOR DECISION

 

 

1.           We heard these appeals separately but now give a joint decision because the two appeals give rise to identical considerations.

T/2010/16 Alan Cooper t/a Alan Cooper Haulage

2.           This is an appeal from the decision of the Traffic Commissioner for the Eastern Traffic Area to refuse to disregard the fact that the Appellant’s licence had terminated following non-payment of the continuation fee on the due date. The Traffic Commissioner concluded that there were no exceptional circumstances within s. 45(5) of the Goods Vehicles (Licensing of Operators) Act 1995, ["the 1995 Act"].

3.          The factual background to this appeal appears from the documents and the Traffic Commissioner’s decision and is as follows:-

               (i)               The Appellant is the holder of a Standard National Goods Vehicle operator’s licence authorising 1 vehicle.

              (ii)               In about July 2008 the Appellant sent form GV81 to the Central Licensing Unit at Leeds, [“the CLU”], in order, amongst other things, to notify them of a change of address from 34 King Street, Whetstone, Leicester, LE8 6LS to 4A Trinity Road, Enderby, Leicester, LE19 2BU.

            (iii)               On 1 October 2009 the Appellant was sent the standard letter warning him that if he failed to pay the £10 renewal fee by 31 October 2009 the licence would terminate. The letter was sent to 34 King Street, his old address.

            (iv)               On13 November 2009 the Office of the Traffic Commissioner at Leeds, [“the TAO”], wrote to the Appellant to inform him that as no payment had been received the licence had terminated as a result of the provisions in s. 45(4) of the 1995 Act. The Appellant was also informed that if he wished to resume operating he must first apply for a new licence. Again this letter was sent to the old address.

             (v)               On 25 November 2009 the Appellant paid the fee, but as the payment had not been accompanied by any explanation as to why it was late the payment was returned on 12 December 2009.

            (vi)               On 11 January 2010 there was a telephone conversation between the Appellant and a member of the staff at the TAO. The Appellant indicated that he would ask for the late payment to be accepted because the CLU had failed to change his address following the notification in July 2008.

           (vii)               On 19 January 2010 the Appellant wrote to the TAO. He said that despite the formal notification of his change of address in July 2008 the renewal reminder was sent to his old address and that by the time it had been forwarded to him the period for renewal had expired, hence the late payment. He made the point that in these circumstances he considered that it was most unfair to require him to apply for a new licence. He urged the TAO not to send any more correspondence to 34 King Street because the position between him and his ex-partner, who was still living there, was not good, with the result that he did not receive mail sent to that address.

         (viii)               The matter was then investigated and considered in the TAO. It emerged that the GV81 was in fact sent in May 2008 in order to add another operating centre but that it also gave 4A Trinity Street as the correspondence address, with a note stating; “as of now please”. Supporting documents also showed 4A Trinity Street as the correspondence address. Notwithstanding this clear instruction the address was never updated, (perhaps because the variation application was not pursued), and correspondence continued to be sent to 34 King Street. The CLU should, perhaps, have been alerted to the problem by the return of a Recorded Delivery letter in June 2008. However it was also pointed out that the 2008 renewal fee was paid, suggesting that some correspondence had reached the Appellant via the old address. A recommendation was made that late payment should be refused.

            (ix)               The Traffic Commissioner considered the matter with great care. He considered a number of decisions of the Transport Tribunal and the Administrative Appeals Chamber beginning with the comment that these decisions: “… can, in the face of the clear requirements of the statute, be confusing where there is an absence of developed reasoning”. Given that recent decisions, which will be considered below, make it clear that the 1995 Act contains no provisions for sending reminders and that the obligation to renew is placed fairly and squarely on the operator the Traffic Commissioner concluded that there were no exceptional circumstances in this case and that there was, therefore, no discretion to accept late payment. The Appellant was notified of this conclusion in a letter dated 27 January 2010.

              (x)               The Appellant appealed by a Notice of Appeal dated 20 February 2010. He repeated the points he had made to the Traffic Commissioner and added that his ‘O’ Licence was valid until 2012, it was only the disc on display in the vehicle which required annual renewal.

T/2010/21 Jeanette Wootten t/a Woodhouse Furniture

4.           This is an appeal from the decision of the Traffic Commissioner for the South Eastern and Metropolitan Traffic Area to refuse to disregard the fact that the Appellant’s licence had terminated following non-payment of the continuation fee on the due date. The Traffic Commissioner concluded that there were no exceptional circumstances within s. 45(5) of the 1995 Act.

5.          The factual background to this appeal appears from the documents and the Traffic Commissioner’s decision and is as follows:-

               (i)               The Appellant is the holder of a Restricted Goods Vehicle operator’s licence authorising 2 vehicles with a correspondence address of 179 Brompton Farm Road, Strood, Kent.

              (ii)               In October 2009 the Appellant applied to add a new operating centre. On page 1 of the application the correct correspondence address was set out.

            (iii)               On 13 November 2009 the CLU wrote to the Appellant thanking her for the application and explaining how it would be handled. That letter was sent to 139 Brompton Lane, Rochester, it contained a request for further information.

            (iv)               On 16 November 2009 letters were sent to the Appellant from the TAO, in Eastbourne, giving her an opportunity to make representations about an unsatisfactory VOSA investigation. The letters were sent to a number of addresses, including 139 Brompton Lane and 179 Brompton Farm Road but it would appear that most were returned to the TAO marked ‘not called for’.

             (v)               On 19 November 2009 the Appellant telephoned the TAO at Eastbourne pointing out that the address in the system was wrong and that the correct address should be 179 Brompton Farm Road. The Appellant was advised that the system would be updated. She was sent a letter by the TAO on the same day to 179 Brompton Farm Road.

            (vi)               On 10 December 2010 the CLU wrote to the Appellant at 139 Brompton Farm Road, Strood giving her a final opportunity to resolve the outstanding issues in relation to the application to add an operating centre.

           (vii)               On 31 December 2009 the Appellant was sent the standard letter warning her that if she failed to pay the £4 renewal fee by 31 January 2010 the licence would terminate. The letter was sent to 139 Brompton Farm Road, Strood.

         (viii)               On 8 February 2010 the TAO at Leeds wrote to the Appellant informing her that as the renewal payment had not been received by 31 January 2010 the licence had terminated and that if she wished to resume operating she had to apply for a new licence. That letter was sent to the correct address.

            (ix)               On 23 February 2010 the Appellant sent an email to the TAO at Leeds explaining that she had just received a letter ‘regarding a reminder for the annual disc fee’ and that she had telephoned at once to explain that she had not received the original letter and had been told that it had been addressed to 139 Brompton Farm Road. She pointed out that she had had this problem before and that she had been assured that the incorrect address had been removed from the database. She added that this was the first year that she had had an operators licence and that she was not aware of the disc fee and that she was waiting to hear about the variation application.

              (x)               The matter was then considered in the TAO. It appeared that the Appellant had opted to pay for fees on a 5 yearly basis. It was accepted that the annual reminder letter of 31 December 2009, in respect of an annual fee of £4, was sent to the wrong address, but it was pointed out that reminder letters are sent as a matter of courtesy and that the expiry date is shown on the licence disc. The recommendation to the Traffic Commissioner was that there were no exceptional circumstances so that the licence should remain terminated.

            (xi)               The Traffic Commissioner described the position as ‘a mess’ but found that there were no exceptional circumstances and therefore refused the application to disregard the automatic termination of the licence. The Appellant was informed of that decision by a letter dated 24 February 2010, sent to the correct address.

           (xii)               By a Notice of Appeal dated 8 March 2010 the Appellant appealed against that decision. In addition to relying on the fact that the reminder had been sent to the wrong address after she had been told that the incorrect address had been ‘wiped from the system’ the Appellant pointed out that she was unaware of the £4 fee because she thought that the licence had been granted for five years.

 

6.           The main points made by each of these Appellants were first, that it was not fair to put them to the time trouble and expense of applying for a new licence when the CLU was at fault for not entering their correct address in the system and second that as a result they had been deprived of an opportunity to make payment on time through no fault on their part. We have to consider whether or not these are valid arguments given the approach taken by the Tribunal in other cases and whether or not it is possible to provide more general guidance in an area in which Traffic Commissioners clearly find it difficult to do justice.

7.           The 1995 Act makes no provision for sending out reminder letters when an annual renewal fee is due, but s. 45(4) of the Act provides that: “If any fee or instalment of a fee in respect of the continuation in force of an operator’s licence is not duly paid by the prescribed time, the licence terminates at that time”. The Tribunal considered the effect of this provision, combined with the Act’s silence in relation to reminder letters in the cases of 2008/569 David Collingwood t/a Construction and Demolition Services and 2009/492 Clemente Fanciulli t/a P B Haulage. The Tribunal concluded that the Act placed responsibility for renewal ‘fairly and squarely on the operator’. The question is whether this is an absolute obligation, in which case no other considerations could be relevant or whether it is better described as the primary obligation, with the result that there will be cases where other factors can be taken into account. We sense that since the decisions in Collingwood and Fanciulli Traffic Commissioners have come to regard it as an absolute obligation but we are quite satisfied that such an approach is plainly wrong.

8.           It is plainly wrong to regard the obligation on the operator as absolute because if that was the case it is difficult to see how s. 45(5) of the 1995 Act could ever have any effect, yet Parliament has put it there to give Traffic Commissioners a degree of discretion. That subsection provides that: “The Traffic Commissioner may, if he considers there to be exceptional circumstances that justify his doing so in any case where subsections (3) or (4) has applied, direct that as from the time mentioned in that subsection its effect is to be disregarded”. The underlining of the word ‘any’ is ours because in our view it makes it quite clear that even where the operator has failed in his or her primary responsibility it is still open to the Traffic Commissioner to disregard the automatic termination of the licence, provided, of course, that there are exceptional circumstances which justify his doing so.

9.           Without in any way detracting from the fact that the primary responsibility for renewal rests on the operator the fact is that reminder letters are sent out. They are described as being sent ‘as a matter of courtesy’. We do not quarrel with that description, given the primary responsibility, which falls on the operator. But in our view it is also necessary to take a practical approach. If the practice of sending out these letters suddenly ceased the probability must be that the CLU would be overwhelmed by the number of new applications which would have to be processed as a result of the automatic termination of licences, which would have been renewed had the reminder been sent. Even if the licence fee covers the cost of such work in full, (which may be doubtful), it seems to us that the disruption, which would be caused, would reduce the ability of the CLU to process other essential work. In our view the reality is that while the primary responsibility for renewal rests fairly and squarely on the operator in many cases payment will, in practice, be triggered by receipt of the reminder letter.

10.        How should Traffic Commissioners reconcile these conflicting considerations? If they receive no explanation for a failure to pay or for a late payment no question of ‘exceptional circumstances’ will arise, with the result that s. 45(5) cannot be applied. However whenever an explanation is given, even if it appears that the operator has failed in his or her primary responsibility, Traffic Commissioners must consider whether the explanation could amount to ‘exceptional circumstances’. In doing so they should bear in mind two things. The first is that each non-payment case is likely to be different and each will turn on its own facts. If reliance is to be placed on earlier decisions it will be important to ensure that the relevant facts are sufficiently similar. The second is that the main dictionary definition of ‘exceptional’ is ‘unusual’. In our view an approach, (we recognise that there may be others), would be to ask first whether the circumstances put forward properly merit the description ‘exceptional’ in the sense of unusual and second, whether those circumstances have caused or contributed to the non-payment. If the answer to the first question is ‘No’ it follows that the Traffic Commissioner cannot disregard the automatic termination of the licence, because the pre-condition to the exercise of discretion will not have been established. On the other hand if the answer to both these questions is ‘Yes’ then it seems to us that there is likely to be a strong case for concluding that the automatic termination of the licence should be disregarded. Where there are exceptional circumstances the Traffic Commissioner must go on to decide whether or not to exercise discretion to disregard the automatic termination of the licence. The discretion must be exercised in a way which achieves a just and proportionate result. Factors which can, properly, be taken into account, include the operators past payment history and the extent to which the operator has failed to comply with the primary responsibility to pay the renewal fee on time. Without setting out the detail of previous Tribunal decisions on this issue our view is that the approach we suggest would have produced the same result in the overwhelming majority, and probably all such appeals. Those decisions are capable of providing guidance but only where the relevant facts are sufficiently similar. However it should be noted that some of those decisions relate to a time when more than one reminder letter was sent out. As we understand the position that practice has now ceased with the result that arguments based on an expectation that more than one letter should be sent will fail.

11.        It is accepted in both these appeals at the CLU was properly informed of a change of address by the operator. It is accepted that the CLU received the new address in each case and it is accepted that in each case the CLU failed to amend its records and continued to send correspondence to the old address. In our view there can be no doubt at all that the combined effect of all these factors amounts to exceptional circumstances, (unless it is going to be said that maladministration at the CLU is so prevalent that it has ceased to be unusual). As a result both these Appellants have been deprived of the opportunity to respond to the reminder letter by paying the renewal fee on time. Having seen and heard from both Appellants we are quite satisfied that they would have done so had they had the chance. It follows, in our judgment, that the failure of Leeds to enter the correct address on the system has contributed to non-payment on time. The final question concerns the exercise of discretion. Neither of these Appellants has any history of previous non-payment so the question is whether their primary responsibility to pay on time is outweighed by the failure on the part of Leeds. By way of an answer we pose this question: is it right or fair to impose the time, cost and trouble of applying for a new licence on either of these Appellants when admitted fault on the part of the CLU has contributed to the non-payment? In our view the answer is a clear and emphatic ‘No it is not’. The Tribunal has often made the point that the licensing system relies on trust and that, in particular that Traffic Commissioners must be able to trust operators. However trust is a two-way street because operators who give proper notice of a change of address are entitled to trust the CLU to make the necessary changes and to send correspondence to the new address. In the particular circumstances of these cases any decision other than disregarding the automatic termination of these licences would run the risk of undermining trust in the regulatory system in the eyes of the public generally and operators in particular.

12.        For these reasons both these appeals are allowed.

13.        In paragraph 5(x) we referred to the fact that Mrs Wootten had apparently opted to pay fees on a five yearly basis. She told us that she had, in fact, received a disc for one year and that she had been told in the course of a telephone call to Leeds that a refund cheque for £572 had been sent to her, though she has never received it and she did not know why this had happened. It appears that this too was sent to the wrong address. It also appears that the Traffic Commissioner was not informed of this part of the picture. While we have not taken these matters into account in allowing this appeal, because the situation remains far from clear, we nevertheless consider that it is right to mention them for two reasons. First, the fact that a cheque for £572 has been sent to the wrong address and has been lost to the operator, brings home the importance of ensuring that the CLU takes action as soon as possible after it receives notification from an operator of a change of address. Second, we consider that this is material, which should have been put before the Traffic Commissioner, because it was potentially relevant on the question of ‘exceptional circumstances’ and also relevant on the issue of exercising discretion. It is important that Traffic Commissioners are given all the relevant information on which to exercise discretion, if they need to do so. However we should finally add that the CLU is to be commended for frankly accepting that they had received notification of a change of address from each of these Appellants but had failed to act upon it.

 

 

 

 

 

Michael Brodrick, Judge of the Upper Tribunal,

Principal Judge for Traffic Commissioner Appeals.

11 May 2010