Neutral Citation Number: [2010] UKUT 474 (AAC).

 

Appeal No.  T/2010/72

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

 

ON APPEAL from the DECISION of

Joan Aitken Traffic Commissioner for

Scotland Dated 9 September 2010

 

 

 

Before: Hugh Carlisle QC  Judge of the Upper Tribunal

Patricia Steel Member of the Upper Tribunal

David Yeomans Member of the Upper Tribunal

 

 

Appellant:

JAMES BROWN

T/a FORTH TRAVEL

 

 

 

Attendances:

For the Appellant: Toby Sasse, counsel, instructed by Backhouse Jones, solicitors for the Appellant

 

 

Heard at: The Eagle Building, 215 Bothwell Street, Glasgow.  G2 7EZ

Date of hearing: 25 November 2010

Date of decision: 17 December 2010

 

 

 

DECISION OF THE UPPER TRIBUNAL

 

IT IS HEREBY ORDERED that the appeal be ALLOWED and that the case be remitted for rehearing by a different traffic commissioner.

 

SUBJECT MATTER:  Loss of repute; fronting; burden of proof

 

CASES REFERRED TO: 

Crompton v. Department of Transport North Western Area (2003) EWCA Civ 64

Muck It Limited & Others v. Secretary of State for Transport (2005) EWCA Civ 1124

 

 

REASONS FOR DECISION

 

 

 

1. This was an appeal from the Decision of the Traffic Commissioner for Scotland on 9 September 2010 when she revoked the Appellant’s licence on the grounds of loss of repute under s.17(1) of the Public Passenger Vehicles Act 1981.

 

2. The factual background appears from the documents and the transcript of the public inquiry and is as follows:

(i) The Appellant is the fourth member of the Brown family to have applied for a public service vehicle operator’s licence.

(ii) The Appellant’s father, Mr Alistair James Brown, had traded for many years as Browns of Edinburgh until 29 April 2008 when his licence authorising 15 vehicles was revoked for loss of repute.  VOSA had carried out an investigation into the use of tachographs and it transpired that wholesale use had been made of “ghost names” by which drivers had been able effectively to drive double distances without rest.  The managers directly involved were the Appellant’s brother Ronald Brown and his wife Rhona but the Traffic Commissioner expressly found that Mr AJ Brown knew what had been going on.  Mr AJ Brown was disqualified for four years.  He appealed to the Tribunal but the appeal was dismissed on 10 October 2008.  The Tribunal agreed with the Traffic Commissioner that this case was “extremely serious with the conduct causing grave risks to road safety and undermining the principles of fair competition” (see 2008/342 AJ Brown T/a Browns of Edinburgh, available on the Tribunal’s website).

(iii) Mr Ronald Brown was an operator in his own right and on 21 June 2008 his licence for five vehicles was also revoked for loss of repute.  He was disqualified for five years. 

(iv) Mr Ronald Brown’s son, Alistair Ronald Brown, applied for a licence for nine vehicles on 27 June 2008.  This application was referred to a public inquiry and was refused on 9 April 2009.  The grounds were loss of repute and the substance of the case against him was that he was a front for his father and grandfather.  In her decision the Traffic Commissioner stated:-

“I remind myself what I know of the Brown family.  They were ruthless and calculating people who set their face against compliant PSV operating to work the coaches hard.  They did this over a sustained period of time.  To the outside world, they presented meticulously – there were no problems with the maintenance of the vehicles.  To the outside world, the Brown family enterprise would have looked impeccable.  It was only when VOSA received the intelligence information that the truth was found – and the truth was resisted as emphasised by the Transport Tribunal.”

The Traffic Commissioner went on to say that the Browns were a shamed family and that she could not distinguish the Appellant Alistair Ronald Brown from it.  He appealed to the Tribunal but the appeal was dismissed on 3 September 2009 (see 2009/264 AR Brown).

(v) The Appellant applied for a standard international public service vehicle operator’s licence for six vehicles on 16 July 2009.  A licence was granted to him on 9 September 2009.  It seems that this grant was made under delegated powers.  When the matter was brought to the attention of the Traffic Commissioner she decided that the licence should be referred to a public inquiry.  A call-up letter was sent on 19 November 2009 and this alleged that the licence “may be a means of circumventing her revocation/refusal decisions for the Brown family”.  Financial standing was also put in issue and it was stated that the Traffic Commissioner “will require evidence as to the source of £37,000 deposited to your bank account on 2 April 2009”.

(vi) The first hearing of the public inquiry took place on 22 December 2009 before the Traffic Commissioner.  The Appellant was represented by Mr Kelly who sought more detail of the case against the Appellant.  The Traffic Commissioner said that there had not been any actual report from VOSA.  She explained that someone had realised that the application had been made by a member of the Brown family.  The Traffic Commissioner explained:-

“….. ideally I would prefer to have dealt with it at an application stage, but I am not going to ignore it because it has come to my attention as an issue that I have to look at because it is a licence that has been granted.  So now, I want to explore with Mr James Brown, who he is, what he is …..  and if he is in circumvention of my orders.”

The Traffic Commissioner referred to the evidence of financial standing as being a matter within the Appellant’s own knowledge.  Mr Kelly pointed out that if anything adverse was found this would go to repute although this had not been raised as such in the call-up letter.  Eventually Mr Kelly stated:-

“Mr Kelly: ….. where is the problem?  What is causing your Honour’s office concern, given that this is an existing holder?

“The Traffic Commissioner: I think it comes down to the fact as I understand it that the regional intelligence unit has referred this through to my office because they think there is a circumvention.  Why do we not just tackle it head on, Mr Kelly? Why does Mr James Brown not want to tell me about this?”

The Traffic Commissioner offered an amended call-up letter.  Mr Kelly applied for an adjournment and this was granted.

(vii) An amended call-up letter was sent out on 24 May 2010.  This alleged that intelligence had been received that the application was “a phoenix” and that the transport manager, Mr James Reilly, was an ex-Brown’s driver.

(viii)  The next hearing of the public inquiry was on 3 June 2010.  Mr Kelly again appeared and the Appellant produced a manuscript statement (which was not included in the papers sent to theTribunal).  Mention was made that the Appellant had notified the change of his operating centre (by “operator self service procedure”) on 19 April 2010.  A further adjournment was granted. 

(ix) The next hearing took place on 6 July 2010.  Mr Woolfall appeared for the Appellant.  Mr James Reilly also attended, as had been requested in the call-up letter.  Mr Woolfall had only recently been instructed and after a discussion about documents a further adjournment was granted.  The Traffic Commissioner indicated that she regarded the “source of funds issue” as significant.

(x) The final hearing of the public inquiry was on 19 August 2010.  Mr Woolfall apologised for the absence of Mr Reilly who had been taken ill that morning.  The Traffic Commissioner decided to proceed with the public inquiry but said that she could revisit this aspect if necessary.  The Appellant then gave evidence.  He was 49 years old and was not the holder of a PSV licence.  He had been a slater after leaving school and had then moved on to operating taxis from the airport.  He had never before been involved in the operation of buses.  The opportunity to get into buses had arisen and he decided to give it a go.  He had started off with an operating centre at Harbour Road, Edinburgh but he had been given notice to leave and had moved to Drovers Road, Broxbourne.  This was a site that his brother Ronald had used.  His funding had consisted of £12,000 of his own money and £25,000 which his mother had given him: she had sold some property and had given money to his brothers and sisters as well.  He had been helped in filling out the application form by his nephew AR Brown because the latter had already completed such a form on his own behalf and he knew what to do: AR Brown had told the Appellant that his own application had been refused.  The vehicles happened to be vehicles which his grandfather AJ Brown had operated.  After his revocation the finance for the vehicles had been taken over by another operator, Ian Adam of Harlequin Travel, and the Appellant had then taken over the finance from him.  The Appellant had not realised where the vehicles had come from and took them on at what he thought to be a good price.

(xi) The Appellant emphasised that neither his father nor his brother were involved in his business.  This was different from that which they had carried out.  Mr Reilly had worked as a driver for his father but was an old friend of the Appellant and had agreed to act for him.  Mr Reilly organised the drivers and the coaches.  The Appellant said that he was continuing to operate taxis but that on most days he spent about two hours in the morning and about one in the afternoon on buses.  He had tried to do everything by the book and would not have business dealings with his family. 

(xii) The Traffic Commissioner tested the Appellant’s evidence by detailed questioning.  He agreed that the bank statements provided to the Traffic Commissioner did not specify the source of the funds.  He volunteered that his nephew, Alistair Ronald Brown, did work for him in his office.  He paid him on an hourly basis but was reluctant to provide details to the Traffic Commissioner.  Eventually Mr Woolfall asked for a short adjournment and the Appellant then did give details.  The Traffic Commissioner indicated that she had never previously had a bus operator who had refused to answer her questions.  The Appellant was asked about the purchase of the vehicles and said that he had taken over finance rather than actually pay for the vehicles.  The Traffic Commissioner suggested that the vehicles had been kept warm for someone from the family to take them over but the Appellant denied knowledge of any such plan. 

(xiii) Mr Woolfall re-examined the Appellant who repeated that he was not in partnership with other members of his family.  No-one else was involved with him.  Mr Woolfall then made closing submissions.  He emphasised that there had been no adverse evidence from VOSA and that no criticisms had been made of Mr Reilly as transport manager.  The Traffic Commissioner reserved her decision.

(xiv)  The Traffic Commissioner’s decision is dated 9 September 2010.  She set out the background in detail and incorporated the previous decisions.  She said that Mr Kelly had questioned her entitlement to detail of the source of funds but that she wanted to know with whom she was dealing and that that went to trust.  She reviewed the Appellant’s evidence and was critical of his demeanour and behaviour during the public inquiry.  She said that he “displayed a defensiveness which did not assist at all in him cultivating the trust that is necessary between traffic commissioner and operator”.  She considered the timings of the other revocations and of the refusal of Mr Alistair Ronald Brown’s application and thought that the Appellant had moved in “to take up this opportunity”.  He had not been forthcoming about his nephew AR Brown’s involvement and had taken exception to being asked about his earnings.  She doubted that tax was being paid on these and said that the Appellant’s evidence on this aspect was “far from straightforward: he prevaricated with me”. 

(xv) The Traffic Commissioner concluded that the business was being run by Mr AR Brown and by Mr Reilly as transport manager.  She went on:-

“I do not trust Mr Brown.  I do not think I have been told the half of what is really going on.  There has not been full and frank disclosure to me.  It could be countered that it is for me to find out not for him to tell.  That is true to an extent.”

(xvi)  The Traffic Commissioner said that “the source of funds is from grandmother Brown at a time when the Brown family needed someone to be an operator”.  She continued:-

“I am of the view that it is beyond reasonable doubt that this application is a phoenix for the continuation of Browns of Edinburgh.  Having so decided, I cannot find that Mr James Brown retains his repute.  Thus, I have to revoke that licence.  I consider that it is proportionate to do so.  He took a chance and the link to grandson Brown has been discovered.  He has had the advantage of a period of operation from November to date.”

The licence was revoked with effect from 30 November 2010 but this order was subsequently stayed. 

 

3. At the hearing of the appeal the Appellant was represented by Mr Sasse.  We are grateful to him for his skeleton argument and for his helpful submissions.  He reminded us of the Crompton case and the Muck It case and said that it was trite law that a licence once granted was a valuable possession and that the burden of proving loss of repute or of financial standing lies upon the Traffic Commissioner.  This is to be contrasted with an application for a licence when the burden of proof lies upon the operator.  Mr Sasse’s essential submission was that the Traffic Commissioner had failed properly to apply the burden of proof and that she had required the Appellant to show cause why his licence should not be revoked.  The transport manager was unwell but had indicated his willingness to attend and the Traffic Commissioner should have received his evidence if she had any doubt about the Appellant’s position.  There was no evidence of any involvement by any disqualified member of the family and it was irrelevant if Mr AR Brown was assisting the Appellant because his involvement, as a refused applicant, did not constitute a “phoenix”, in the Traffic Commissioner’s words, unless he was being directed by the two disqualified family members.  The Appellant was to be treated as an existing licence holder of good standing: there were no adverse reports from VOSA.  Insofar as a finding of lack of trust was made this was based on the Appellant’s poor showing as a witness and had to be seen as being a reaction to the Traffic Commissioner’s own strongly stated views.

 

4. We have been troubled by this case.  It is clear from the call-up letters and from the Traffic Commissioner’s comments that there was no “VOSA intelligence” apart from the fact that someone realised that the Appellant was a member of the Brown family.  This was raised by Mr Kelly and it is a moot point whether if the Appellant had chosen not to give evidence there would have been sufficient evidence to have transferred an evidential burden to him.  But the Traffic Commissioner required evidence by him to be given and so the public inquiry proceeded.  We think that it is no surprise that the Appellant got off on the wrong foot with the Traffic Commissioner because she did not conceal her opinion of the Brown family.  Counsel did not go so far as to suggest that the Traffic Commissioner displayed a perception of bias but we have to say that we think that in the particular circumstances it would have been preferable for the Traffic Commissioner to have arranged for a deputy to have acted.

 

5. In the absence of an investigation report from VOSA there was no evidence available to the Traffic Commissioner apart from that of the Appellant.  It is apparent that he did himself no favours.  However, Mr Reilly had indicated his willingness to give evidence and would have been present if he had not been taken ill overnight.  In the circumstances we think that the Traffic Commissioner should have adjourned the public inquiry in order to have enabled Mr Reilly to attend and give evidence.  The Traffic Commissioner had flagged up this possibility earlier and seems to have overlooked it.  On any view evidence from Mr Reilly was likely to have been of assistance.  We do not think that it was for Mr Woolfall to have mentioned Mr Reilly’s position because he was not to know what was then in the Traffic Commissioner’s mind. 

 

6. In the result we are satisfied that the decision cannot stand.  The appeal is allowed and the order of revocation is set aside.  We remit the case for rehearing before a different traffic commissioner.  We think that an investigation by VOSA is desirable and direct that a fresh call-up letter be sent in order that the issues may properly be identified.

 

 

 

Hugh Carlisle QC

Judge of the Upper Tribunal

17 December 2010