Neutral Citation Number: [2011] UKUT 180 (AAC)

 

Appeal No.  T/2010/84 & 86

 

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

 

ON APPEAL FROM THE DECISION OF MILES

DORRINGTON, DEPUTY TRAFFIC COMMISSIONER

for the WEST MIDLAND TRAFFIC AREA

Dated 29 October 2010

 

 

 

Before:

Her Honour Judge J Beech, Judge of the Upper Tribunal

Stuart James, Member of the Upper Tribunal

John Robinson, Member of the Upper Tribunal

 

 

Appellant:

COACH EXPRESS LIMITED

AK TRAVEL LIMITED

A2B TRAVEL LIMITED

MIBBO THANDI

AMARDEEP THANDI

 

 

 

 

Attendances:

For the Appellants: James Backhouse solicitor, of Backhouse Jones Solicitors

 

 

Heard at: Victory House, 30-34 Kingsway, London, WC2B 6EX

Date of hearing: 30 March 2011

Date of decision: 28 April 2011

 

 

 

 

DECISION OF THE UPPER TRIBUNAL

 

IT IS HEREBY ORDERED that these appeals be DISMISSED and that the orders of revocation and disqualification shall come into effect on 23.59 on 26 May 2011

 

 

 

SUBJECT MATTER:-  Good repute; maintenance; conditions & undertakings; revocation & disqualification

 

 

CASES REFERRED TO:- Brian Haulage Limited (2009/217); Priority Freight Limited (2009/225)

 

 

 

 

REASONS FOR DECISION

 

 

1.           This was an appeal from the decision of the Deputy Traffic Commissioner for the West Midland Traffic Area made on 29 October 2010 when he revoked the operator’s licences of the Appellant companies under s.17 of the Public Passenger Vehicles Act 1981 and disqualified Mibbo Thandi and Amardeep Thandi for 18 months under s.28 of the Transport Act 1985.

 

2.           The factual background appears from the documents and the transcript of the public inquiry.

 

3.           The Background to the appeal

 

Mibbo Thandi (“M Thandi”) is the father of Amardeep Thandi (“Avi Thandi”).  They operate commercial vehicles from one operating centre situated in Alma Street, Smethwick, West Midlands. Their involvement with companies that have held operator’s licences includes, but is not limited to the following:

 

(i)              City Solutions Limited which held a PSV licence from about 2002 until about 2007 when the company was dissolved.  It’s Director was Avi Thandi.

 

(ii)             Lynx Solutions Limited which held a Standard National Operator’s licence granted in November 2002.  Avi Thandi was a director and the nominated Transport Manager. The licence was allowed to lapse in October 2009.

 

(iii)            AK Travel Limited which held a Standard International Operator’s licence granted in 2004. Avi Thandi was the company secretary between 2004 and 2008 and he was then appointed as a director in 2008.  M Thandi was appointed Company Secretary in May 2010. He was also the nominated Transport Manager.

 

(iv)           Thandi Skips Limited held an HGV operator’s licence.  Avi Thandi was a director.  Sukhdev Singh was the Transport Manager.  The company was dissolved in 2009 following the revocation of its licence.

 

(v)             Coach Express Limited held a Standard International Operator’s licence granted on 9 March 2007.  M Thandi was the sole director of the company.  Avi Thandi was appointed Company Secretary in May 2010. Fredrick Taylor had been the Transport Manager but he left in 2007 (with no notification being given to the Traffic Commissioner and no replacement notified). 

 

4.           Regulatory action taken prior to 29 October 2010

 

(vi)           On 17 May 2004, City Solutions was called to a public inquiry for maintenance related issues.  A reduction in the number of vehicles authorised over the combined fleet was imposed by the Traffic Commissioner and the Thandis were allowed to choose which authorisations were to be reduced.  M Thandi elected to reduce the City Solutions authorisation to six; the AK Travel authorisation to one and the Lynx Solutions authorisation to eight.  In 2005, the operator’s licence of City Solutions was not renewed and its vehicle authorisation was transferred to Lynx Solutions upon application, increasing the Lynx Solutions authorisation to fourteen vehicles.

 

(vii)          In November 2004, Lynx Solutions received guidance concerning maintenance and driver defect reporting as a result of an unsatisfactory maintenance investigation.  On 17 June 2005, Lynx Solutions appeared at a public inquiry as a result of failing to operate registered local bus services in accordance with timetables.  A penalty of £2,200 was ordered to be paid and the company was prohibited from operating any local service within the centre of Birmingham for twelve months.  The company also gave an undertaking to install a rolling road for brake testing at the Alma Street depot as a result of shortcomings in its maintenance systems.

 

(viii)         Thandi Skips, AK Travel, Coach Express and Lynx Solutions were called to a conjoined public inquiry which took place on 5 and 6 January 2009.  The following findings were made and action taken:

 

a)    Thandi Skips: the operator’s licence was revoked upon the Deputy Traffic Commissioner being satisfied that the company had been convicted of six offences under s.33 of the Environmental Protection Act 1990 resulting in a fine of £30,000 and an order to pay costs of £9,064; that the company had been dissolved prior to the fines being imposed, a material change which had not been notified to the Traffic Commissioner; that the convictions had not been notified to the Traffic Commissioner.  In addition, M Thandi had been convicted of six offences under s.33 of the Environmental Protection Act 1990 and had been fined £25,000 and Avi Thandi had been convicted of one offence under the same section and had been fined £5,000.  These offences which were notifiable and serious within the meaning of Schedule 3, paragraph 3 of the Goods Vehicles (Licensing of Operators) Act 1995, had not been notified to the Traffic Commissioner. 

b)    AK Travel, Coach Express and Lynx Solutions: the Deputy Traffic Commissioner accepted the evidence of Vehicle Examiner Jones (“VE Jones”) whose evidence was that between June 2005 and December 2008, sixty seven prohibitions had been issued to vehicles operated by the three companies of which eight prohibitions had been “S” marked.  There had been a failure to record on either preventative maintenance inspection sheets (“PMI’s”) and/or driver defect records (“DDR’s”) many of the defects that had attracted prohibitions.  Many of the defects were of long standing and there was sub-standard preparation for prohibition removal.  Vehicles were being presented for annual testing with defects and then re-presented having been prepared to a “bare minimum standard”.  The combined first time pass rate of the three companies was 28% compared with the national average of 73%. There was a clear lack of management control in relation to maintenance and VE Jones had “serious concerns over road safety”.  The extensive advice and guidance that had previously been given to the Thandis’ over  a number of years had not been followed.  VE Jones was also concerned that vehicles were being swapped between the various licences held by the Thandis’ which led to difficulties with enforcement.  The Thandis’ accepted that Coach Express had been without a nominated Transport Manager since 2007 and Avi Thandi admitted that he had not been effective as a Transport Manager on the licences upon which he was named as such. 

c)     Lynx Solutions: the company had breached the previous undertaking to install a rolling road at the operating centre and had failed to inform the Traffic Commissioner of this material change. 

d)    The Deputy Traffic Commissioner heard evidence from Robert Gibson of the Lloyd Morgan Group (“LMG”), a company that specialised in assisting operators to be compliant with conditions and undertakings recorded on operators’ licences, in relation to maintenance.  Mr Gibson’s report proposed driver training, regular compliance audits and on-going support including preparation of vehicles for annual tests by LMG.  As a result of LMG input into the companies prior to the public inquiry, four out of five of the vehicles presented for annual testing had passed on first presentation.  As a result of Mr Gibson’s evidence and his report, the Deputy Traffic Commissioner felt able to step back from revoking the operator’s licences of the three PSV companies and made the following orders:

· each PSV licence was suspended for a period of fourteen days under s.17(2)(b) of the Act; 

· the vehicle authorisation of Coach Express was curtailed from ten to eight vehicles;

· the vehicle authorisation of Lynx Solutions was curtailed from fourteen to twelve vehicles;

· a condition was placed upon all three licences in the following terms: “given the issues with maintenance and the evidence in the public inquiry that vehicles appeared to have been swapped between licences, I also impose a condition under section 16(3) of (the Act) that the vehicles to be used on each licence must be specified with the Office of the Traffic Commissioner in Birmingham and that vehicles can only be specified on one licence at any one time”.  The condition was to take effect seven days after the date of the Deputy Traffic Commissioner’s decision. 

The Thandis’ gave the following undertakings:

·       that the operators were to send to the Office of the Traffic Commissioner in Birmingham (“OTC”) and to VE Jones, a copy of each quarterly fleet compliance report from LMG, to be received every three months.  The reports were to be evidence based.  The first report was due to be received no later than 16 May 2009.  The operator would not be released from this undertaking until three consecutive satisfactory reports had been received.

·       Within 21 days of the receipt of each audit from LMG, the operators were to provide parallel reports which addressed how they were to address any issues raised by LMG.

·       That a rolling road brake testing facility was to be installed and put into use by the operators within 4 months of the Decision and vehicles were to be put through a rolling road brake test every PMI thereafter.

·       That LMG were to undertake a pre MOT inspection of each vehicle prior to it being presented for MOT.

·       That by 1 April 2009, a new full time Transport Manager, or one additional to Amardeep Thandi, was to be nominated on each of the three PSV operating licences and that person was to be a person approved by the OTC.  Copies of the contract of employment for that person(s) for each company must be provided to the OTC by that date.

·       That M Thandi would not be a nominated Transport Manager on the licences for a period of at least 12 months from the date of the decision.   

·       That Avi Thandi would undertake a course in basic Human Resources management so that he could effectively manage disciplinary and grievance issues within the three companies.  Tangible proof of successfully attending such a course must be provided to the Office of the Traffic Commissioner in Birmingham no later than 1 April 2009.

·       That a professional trade body or an employment law solicitor with competence in transport law would review and then amend/re-write the contracts of employment for all drivers and mechanical staff employed in each of the three companies and those contracts were to have a written disciplinary procedure that gave clear examples of conduct which would be regarded as “gross misconduct”, “serious misconduct” or “misconduct” and the likely sanction that would result from such a finding.  An example of a contract for each company, including the disciplinary procedure would be sent to the OTC no later than 1 April 2009.

 

The Deputy Traffic Commissioner made it clear that the good repute of M Thandi and Avi Thandi were severely tarnished and that “this is the very last chance” for the Thandis’ and the companies to operate compliantly, the evidence being such that loss of repute, revocation and disqualification would normally have followed but for the involvement of LMG.

e)    AK Travel, Coach Express and Lynx Solutions: the unchallenged evidence of Bus Compliance Officer Thompson (“BCO Thompson”) was that:

·  AK Travel: 133 journeys monitored; 6 were late; 3 were early; 114 failed to operate; 19 had incorrect or no destination blinds = overall compliance rate of 7.5%

·  Coach Express: 79 journeys monitored; 24 were late; 15 were early; 10 failed to operate; 26 had incorrect or no destination blinds = overall compliance rate of 38%

· Lynx Solutions: 11 journeys monitored; 2 were late; 2 failed to operate; 2 had incorrect or no destination blinds = overall compliance rate of 63.5%

Having given various explanations for the failure to operate services according to the registered particulars, including difficulties with drivers, Avi Thandi told the Deputy Traffic Commissioner that a decision had been made to concentrate on school services and that the companies would cease to operate any other registered services.  The Deputy Traffic Commissioner found that commercial considerations had been placed before the provision of timely services and that there was no reasonable excuse for the failure to operate 95% of services registered by the companies, in accordance with the registered time tables.  Financial penalties were imposed of £550 (AK Travel); £5,000 (Coach Express) and £5,600 (Lynx Solutions) and a condition was attached to all three licences under s.26 of the Transport Act that the only registered services that each company could operate were those that related to the provision of school contracts for a period of 12 months commencing 20 April 2009 “thus giving the operator sufficient time to cancel existing services that fall outside the scope of that condition”. 

 

5.           On 16 February 2009, the OTC received details of the new/additional Transport Manager for Coach Express and Lynx Solutions.  The Transport Manager was Jarnail Singh Thandi.  No application was received in respect of AK Travel and on the form relating to Coach Express, whilst there was reference to the hours that it was proposed Jarnail Singh Thandi would work for Lynx Solutions in addition to those he would work in respect of Coach Express, there was no reference to the number of hours it was proposed that he would work in respect of AK Travel (which would be expected if it was proposed that the same Transport Manager was to be responsible for all three licences). 

 

6.           On 2 March 2009, at Daventry Magistrates Court, Coach Express was convicted of failing to use a tachograph sheet or card and fined £2,000 and ordered to pay costs of £700.  The Traffic Commissioner was not notified of the conviction.

 

7.           LMG produced the first quarterly audit report on 8 May 2009.  It highlighted that following PMI’s undertaken by LMG, only prohibition items were being cleared by the Thandi maintenance staff as a priority and that some none prohibition defects identified during PMI’s were being carried forward through inspection periods.  A recommendation was recorded on each inspection sheet that the vehicles undergo a rolling road brake test, however there was no evidence that such tests were taking place, although a 15 metre inspection pit was being constructed with a rolling road brake tester and provision for wheel shaker plates.  The nature of the defects recorded on the PMI sheets were predominantly of the type that should be identified during the DDR walk round.  This could easily be addressed through improved management of the current driver defect reporting system with specific training for drivers in the identification and reporting of the defects. 

 

8.           The OTC did not receive a parallel report from the Appellants addressing the issues raised in the LMG report.

 

9.           On 15 May 2009, VE Jones undertook a maintenance investigation and examined three vehicles operated by Coach Express.  The investigation was marked as satisfactory.

 

10.        On 22 July 2009, an application was made by Avi Thandi on behalf of AK Travel to increase the company’s vehicle authorisation from one to ten vehicles.  No documentation in support of the application was submitted.  Further correspondence followed with documentation supplied.  By a letter dated 2 December 2009, the company was advised that the financial evidence in support of the application did not show access to the requisite amounts to support an increased variation. There is no further correspondence on the file in relation to this application and no further financial evidence was provided on behalf of AK Travel.  In the absence of further evidence, no decision was made on the application.

 

11.        On 25 July 2009, a Driver’s PG9 was issued in respect of a defective tachograph to Baljinder Singh.  A fixed penalty notice was issued.

 

12.        On 27 July 2009, LMG produced its second quarterly report which highlighted the continued failure of the Appellants to undertake rolling road brake testing and that the “vast majority” of the defects noted at PMI were of a driver related nature.  Further driver training in defect identification and reporting was recommended.

 

13.        The OTC did not receive a parallel report from the Appellants addressing the issues raised in the LMG report.

 

14.        On 22 September 2009, an application was made by Avi Thandi on behalf of Coach Express to increase the vehicle authorisation on the company’s licence from eight to twenty.  No documentation in support of the application was submitted.  Further correspondence followed with documentation supplied.  On 24 November 2009, the OTC wrote to the company advising that the financial evidence submitted in support of the application could not be accepted as the funds were not in the name of Coach Express.  There is no further correspondence on the file in relation to this application and no further financial information was provided on behalf of Coach Express.  No decision was made on the application.

 

15.        On 13 October 2009, the OTC wrote to Avi Thandi noting that despite two reports dated 8 May and 31 July 2009 from LMG, no parallel reports had been received.  He was asked to confirm within fourteen days whether he was going to be implementing the recommendations of LMG.  No answer to the letter was received.  On the same day, the OTC wrote to Avi Thandi as Company Secretary of AK Travel reminding him of the undertaking that a new or additional Transport Manager should have been nominated for the AK Travel licence by 1 April 2009 and that no application had been received.  He was given fourteen days to return the completed forms to nominate a Transport Manager.  No application or other correspondence was received by the OTC in relation to this issue. 

 

16.        As a result of the two variation applications (see paragraphs 9 and 13 above) and intelligence concerning Lynx Solutions, unannounced maintenance investigations took place on 17 October and 28 November 2009.  VE Jones was advised during the first visit that the Lynx Solutions licence was to be surrendered upon the granting of the variation applications made by Coach Express and AK Travel.  As already noted above, in the event, the licence of Lynx Solutions was allowed to lapse in October 2009.

 

17.        M Thandi and Avi Thandi were present on 17 October 2009, although Avi Thandi left the site leaving his father as contact and organiser.  Upon his return, Avi Thandi did not question any of the findings that VE Jones made in relation to AK Travel.  VE Jones was told that Jarnail Singh Thandi, who was not present at the depot, lived with M Thandi.  It was noted that the Alma Street depot was also being used by Gold Bus Limited and Goldenline Buses Limited (“Goldenline”).  VE Jones recorded that the rolling road facility that should have been installed by June 2009, had not been installed and parallel reports had not been received in response to the two quarterly fleet compliance reports undertaken by the LMG.  However, there was evidence that Avi Thandi had attended a discipline and grievance session in May 2009 and that new contracts of employment and a disciplinary procedure were in place.

 

18.        During the visit on 28 November 2009, it became apparent that vehicles were being swapped amongst licences.  For example, on 17 October 2009, four vehicles were displaying Coach Express discs.  On 28 November 2009, two of those vehicles (RUI 6687 and L104 PWR) were displaying discs issued to A2B Coaches Limited (“A2B Coaches”) and Goldenline respectively.  Likewise on the first inspection, there were nine vehicles displaying Lynx Solutions discs; on 28 November 2009, four of those vehicles were displaying A2B discs and one, a Coach Express disc.  VE Jones noted that previously, there had been a clear demarcation between vehicles operated by Goldenline and those operated by the Thandis.  The discovery that Thandi vehicles were displaying A2B Coaches discs was “unexpected” and M Thandi was advised that the question of legality of such use would be referred to the Senior Traffic Examiner for further investigation. 

 

19.        When M Thandi arrived at Alma Street, he was very agitated, aggressive and abusive towards VE Jones and complained of being victimised, although he later telephoned VE Jones to apologise.  When he was asked why some vehicles were displaying licence discs of A2B Coaches, M Thandi replied “what else do you expect me to do?”

 

20.        During the course of the two inspections, four vehicles were examined that were authorised on the Coach Express licence.  One, which was displaying a Goldenline disc was issued with an immediate PG9 for an air leak from the near side rear brake pipe when the foot brake was applied.  This defect caused VE Jones concern as it appeared to be longstanding in nature.  There were no inspection records available for the vehicle.  It appeared that the vehicle had entered service after a period of being “mothballed” without having a maintenance inspection. The prohibition rate for Coach Express vehicles during the investigation was 14%.  However, five vehicles had been examined on the road side since February 2009 and two immediate PG9’s had been issued, one being “S” marked.  The overall prohibition rate was therefore 40%.

 

21.        Two vehicles specified on AK Travel’s licence were examined and one delayed PG9 was issued.  The defect had been identified during the previous PMI of 9 October 2009 but no repair work had been undertaken.  That gave a prohibition rate of 50%.  However, one vehicle had been examined on the roadside resulting in a clear check.  Two vehicles displaying Lynx Solutions discs had been examined on a road side check and were issued with an advisory PG9 and one delayed PG9.

 

22.        The outcome of the investigation was marked unsatisfactory.  Whilst a rolling road had been installed by the second visit in November 2009, that should have been fitted by June 2009.  Further, each PMI sheet completed by LMG, was annotated “brake test required” but no such tests were undertaken.  Vehicles used on school contracts missed inspections during school holidays and were put back into service without a PMI taking place.  Undertakings and conditions had not been sufficiently actioned.  The MOT pass rate of 21.64% with vehicles attracting PG9’s at annual test along with the issue of a variation and refusal prohibition removal on re-presentation, demonstrated inadequate preparation for MOT and PG9 clearance, however the trend was improving.  It was considered that the Thandis’ were not complying with the Statement of Intent with regard to maintenance undertakings submitted at the time they applied for operator licences. 

 

23.        In the meantime, LMG produced its third quarterly report on 17 November 2009.  The report noted that M Thandi had reduced the input of LMG by directing that five vehicles per month would be inspected in house rather than by LMG and that he had reduced the number of days that LMG attended Alma Street.  Whilst on-going inspections showed an improvement in the standard of the vehicles with a steady reduction in defects and a reduction in defects being repeated over PMI’s, the “vast majority” of the defects noted on inspection were of a driver related nature suggesting work was needed to ensure that the defects were rectified between inspections rather than vehicles being permitted to run with a defect until the next PMI.  As a result in the reduction of visit frequency of LMG, some vehicles had exceeded the 28 day PMI interval.   No parallel report addressing these concerns was received by the OTC.

 

24.        As a result of the findings of VE Jones and the apparent use of discs issued to A2B Coaches (as evidenced by four photographs of A2B discs being displayed in vehicles with Thandi livery), further investigations were commenced.  Company House records revealed that Richard Massingham of  Cross House Farm, Ruckcroft, Armathwaite, Carlisle had been the sole director of the company until 1 November 2009.  His wife had been the Company Secretary.  On 1 November 2009, M Thandi was appointed Company Secretary and Avi Thandi was appointed sole Director.  From documentation obtained from the North Western Traffic Area (“NWTA”), it was revealed that A2B Coaches held a standard international operator’s licence authorising ten vehicles from its operating centre at the Cross House Farm, which was also the correspondence address.  As at 4 June 2009, when a licence Check List was completed by Mr Massingham, there were no vehicles specified on the licence. 

 

25.        Traffic Examiner Smith (“TE Smith”), who was based in Carlisle, was asked to investigate the position and she visited Mr Massingham at Cross House Farm on 17 December 2009.  She was informed that Mr Massingham had sold the company, including the operator’s licence and discs to M Thandi.  No vehicles were involved in the sale.  He had informed the NWTA, approximately two weeks prior to TE Smiths’ visit, that he was no longer involved with the company and he stated that he had been advised by the NWTA office to surrender the licence as none of the original applicants were now connected with the licence.  This was confirmed by the NWTA office in Leeds.  TE Smith recommended that M Thandi be visited to ascertain the position regarding the use of discs issued by the NWTA in vehicles being operated outside the NWTA.

 

26.        M Thandi and Avi Thandi were visited by Traffic Examiner Robert Lees (“TE Lees”) on 8 January 2010.  M Thandi confirmed that he had purchased A2B Coaches and the ten operating discs without vehicles.  He said that he intended to become a director of A2B Coaches but that the paperwork had not yet “gone through”.  He said that the vehicles used under the A2B Coaches licence were based at Alma Street but that he intended to operate some regular services from Manchester using the A2B licence.  He said that he acquired the company in November or December 2009 and that a new CPC holder had been employed (un-named) who was based in Birmingham.  In fact, there had been no nominated Transport Manager on the licence since the resignation of Kate Bethal on 17 September 2009.

 

27.        On 29 January 2010, Pete Thompson, Director of LMG wrote to VE Jones informing him that LMG were no longer able to fulfil their responsibilities under the “conditions” attached to the Thandis’ licences.  The letter stated “We feel that following our last report to you that the operator is now failing to comply with the conditions as set by yourself, so we need to disassociate ourselves from them with immediate effect”.  A follow up report from Mr Thompson recorded his “notable areas of concern”:

 

·       A 28 day schedule of PMI’s was set up by Mr Thompson which coincided with inspection visits taking place on Mondays and Tuesdays.  This worked well until M Thandi insisted that inspections be scheduled by calendar month, which meant that on occasion, the 28 day intervals were being exceeded.  However, once M Thandi had reduced the LMG visits to once weekly from twice weekly in August 2009, Mr Thompson encountered difficulties in inspecting particular vehicles which stayed away from the depot on alternate nights.

·       Towards the end of LMG’s involvement with the Thandis’, it became apparent that they were not repairing defects noted as prohibitions and these were defects which required a financial input.  For example, vehicle RUI 2053 failed its rolling road brake test for imbalance at the rear axle, which was caused by a low efficiency at the offside rear service and parking brake.  M Thandi was advised that the likely cause was a seized brake shoe anchor pin.  Later that afternoon, M Thandi drove the vehicle into service without work taking place on the brake.  The following week the vehicle was presented to Mr Thompson as having been “repaired” but it failed the rolling road test again.

·       Within a couple of weeks of starting at Alma Street, it became apparent that licence discs were being swapped between vehicles and in some cases non Thandi licence discs were being used.  Mr Thompson started to record on PMI sheets, the name on the disc being displayed by the relevant vehicle.  After a couple of months, M Thandi asked Mr Thompson to stop making a record.  Mr Thompson stopped recording the details on the master copy of the PMI but he continued to record the details on his photocopy.  Mr Thompson attached a schedule of his findings.  Not only were discs being swapped, but registration numbers were also being swapped. 

·       By the beginning of the New Year of 2010, the Thandis owed LMG a substantial debt for outstanding fees.  Mr Thompson spoke to Avi Thandi and explained his concerns (set out above), the lack of payment and the implications if the licences were called back to a public inquiry. Avi Thandi simply said that he was not going to pay the debt or continue with the relationship with LMG and that if anything happened to the Thandi businesses, Mr Thompson “would pay”. 

 

An example of disc licence and registration number “swapping” from the 28 page schedule produced by Mr Thompson is vehicle RUI 2073 which on 3 March 2009 was displaying a Lynx Solutions disc; on 20 May 2009 it was displaying a Coach Express disc; on 26 May 2009 it was displaying a Lynx Solutions disc.  The number plates of the vehicle were then changed to T500 NDY and on 22 December 2009 the vehicle was displaying an A2B Coaches disc and on 26 January 2009, it was displaying a Goldenline disc.

 

28.        On 18 February 2010, M Thandi wrote to the OTC notifying a change in maintenance provider from LMG to Greenman Vehicle Services.  This prompted a response from the OTC dated 28 April 2010, reminding M Thandi of the undertakings made at the public inquiry concerning quarterly fleet compliance reports with parallel reports from the Appellants and pre MOT inspections of each vehicle to be undertaken by LMG.  Concern was expressed that no application had been received to amend the undertakings and that as a result, the Traffic Commissioner required to be informed immediately as to who was now undertaking the functions of LMG.  In response, M Thandi wrote informing the Traffic Commissioner that it was clear from the LMG reports that maintenance had improved significantly as had the MOT pass rate.  A brake roller machine had installed along with a beam tester and a 15 metre pit.  A vehicle replacement programme had commenced resulting in a significant change to the age of the fleet.  As a result of the improvements, M Tandi asked the Traffic Commissioner to remove the undertakings so as to allow the Appellants to undertake their own maintenance inspections.  After a considerable delay, the OTC wrote to M Thandi on 5 August 2010 informing him that the Deputy Traffic Commissioner had refused his application to remove the undertakings recorded on the Appellants’ licences. 

29.        On 25 March 2010, an application was made to change the operating centres of Goldenline from Unit 1 Avenir House and Unit 4 Seven Stars Road to the Thandi Bus and Coach Depot, Alma Street.  The application did not include confirmation from the owner of the depot that Goldenline had permission to use Alma Street and confirmation of the number of vehicles Goldenline could park at the site.  No reply was received to a request by the OTC that the information be provided and as a result, the application was not determined.

 

30.        In the meantime, between 4 March and 6 April 2010, Bus Compliance Officer Russell Thompson (“ BCO Thompson”) conducted nine days of bus monitoring in respect of three services registered by Coach Express.  It would appear that BCO Thompson had not appreciated that a condition had been attached to the operator’s licence in January 2009 that the Appellants must only operate registered bus services for the purposes of fulfilling school contracts.  The monitored services were services which operated all day.  Of the 44 observations, two departures operated early (4.55%); 12 departures operated late (27.27%) and 28 departures failed to operate at all (63.64%) with a total overall unsatisfactory service provision of 95.45%.  In addition, 16 buses displayed the incorrect service information which amounted to 36.6% of departures monitored.

31.        On 20 April 2010, BCO Thompson visited M Thandi to discuss his findings.  These were not in dispute.  M Thandi proposed purchasing electronic destination displays and said he would submit variations to his timetables.  M Thandi was subsequently invited to provide a written response to BCO Thompson’s findings. 

32.        M Thandi wrote to Richard Hollis, Bus Compliance Manager on 13 May 2010.  He contended that Mr Hollis had already made up his mind to call Coach Express to a public inquiry and that he had taken steps to recommend that the Bus Service Operators Grant (BSOG) received by Coach Express be stopped.  He complained that he had not been given an opportunity to respond to BCO Thompson’s findings and complained of BCO Thompson’s conduct during the meeting that he had with him on 20 April.  The main topic of conversation was whether Coach Express should be receiving the Bus Service Operator Grant (“BSOG”), which was not a matter for the bus compliance unit.  He accused the unit of having “a hidden agenda”.  The letter set out timings which M Thandi maintained he had gleaned from drivers’ records in relation to the observed services.  He contended that these records made BCO Thompson’s monitoring “high questionable”.  He maintained that one service had been amalgamated into two other services and that in respect of another service, a smaller vehicle which did not bear the Thandi livery was being used.  He did accept the findings in relation to destination blinds.  He did not produce any evidence in support of his timings or indeed of any service amalgamation. 

33.        In a letter dated 17 May 2010, Mr Hollis strongly refuted M Thandi’s allegations of bias setting out the standard procedures that were followed in the case of Coach Express, including the passing on of information to the BSOG for that department to determine whether BSOG’s should be withdrawn. 

34.        On 7 July 2010, VE Jones undertook a spot check at the Alma Street depot to examine vehicles being operated by Coach Express and AK Travel.  He noted that there were two vehicles in Thandi livery that were displaying operator discs for Goldenline and A-Line Buses Limited (“A Line”).  He was told that both licences were operated by M Thandi’s brother, Kaka Singh.  Neither licence were authorised to operate from Alma Street. 

35.        During the visit, both M and Avi Thandi were present.  Jarnail Singh Thandi, the Transport Manager for Coach Express was not present.  M Thandi informed VE Jones that the Thandi Group required twenty two vehicles to meets its contractual and operational requirements but that the joint authorisation of Coach Express and AK Travel was only nine vehicles. Twenty four vehicles were present at the depot; three displayed Goldenline discs; one displayed an A Line disc; two displayed Coach Express discs; one displayed an AK Travel disc and the remainder displayed no discs at all.  VE Jones concluded that it was apparent that vehicles were still being swapped between licences which would make it impossible to obtain accurate statistics on licence performance following the undertakings attached to the licences in January 2009.  VE Jones also noted that maintenance was now conducted in house and it was confirmed that LMG was no longer the specified maintenance provider. Since November 2009, seven vehicles operated by Coach Express had been stopped at the roadside and one immediate and one delayed prohibition had been issued.  One of those prohibitions were “S” marked.  The findings resulted in a 28% roadside prohibition rate.  Two vehicles operated by AK Travel had been stopped at the roadside and no prohibitions had been issued.   The failure rate at first time presentation for the annual test was 37.84% compared to the national average of 19.86%.  There had been numerous occasions of multiple defect failures and three instances of brake performance failure despite the installation of a rolling road at Alma Street.  VE Jones concluded that whilst vehicle condition at the time of the investigation was satisfactory, the “S” marked roadside prohibition indicated a lack of understanding of drivers to report promptly in writing any defects that occurred whilst vehicles were in service.  Undertakings/conditions attached to the licences had not been sufficiently actioned in relation to independent vehicle inspections, independent audits with corrective action and lack of quality of preparation and presentation of vehicles for annual test.  As a consequence, VE Jones considered that the operators were not complying with the statement of intent with regard to maintenance. 

 

36.        On 16 July 2010, two buses in Thandi livery were seen parked at Alton Towers.  Vehicles P626 PSX and RUI 2055 were both displaying Goldenline operator’s discs.

 

37.        On 20 July 2010, TE Lees commenced investigations into A Line and Goldenline.  Company House records showed that the correspondence address for both companies was Charlcot, Alexandra Palace, Bilston.  In relation to A Line, M Thandi had been the sole director of the company from July 2005 until 1 October 2009, when Kaka Singh (M Thandi’s brother) was also appointed as a director.  Avi Thandi was the Company Secretary, having been appointed on 1 April 2010 and he was then appointed as a Director on 1 June 2010.  Avi Thandi resigned both appointments on 13 August 2010 (the day he would have received the call up letter dated 12 August 2010).   

 

38.        A Line held a standard national PSV licence authorising three vehicles with an operating centre at Unit 4, Seven Stars Road, Oldbury.  The correspondence address was 17 Soho Road, Birmingham.  The licence database recorded the sole director of the company as being Kulbir Kaur, although in fact she had never held a directorship with the company.  She had however, been the company secretary between July 2005 and December 2009.  The Transport Manager was Prinder Thandi. 

 

39.        On 20 July 2010, TE Lees wrote to the Company Secretary of A Line (who was Avi Thandi at the material time) at the correspondence address and operating centre address recorded on the licence database requesting the production of records for vehicles operated under the licence between 1 May and 30 June 2010.  No response to the letter was received.  TE Lees then attended 17 Soho Road, Handsworth and found that it was an unoccupied office which bore the name Mandla Bhomra & Co.  Occupants of the neighbouring office informed TE Lees that 17 Soho Road had been an accountant’s office and had been unoccupied for three months.  TE Lees then visited the operating centre of A Line at Seven Stars Road and found that to be unoccupied with no indication that the premises were in use.  No alternative correspondence address or operating centre had been notified to the OTC.

 

40.        The Company House records for Goldenline showed that Kaka Singh had been a director of the company since November 2003.  He was joined as a director by Avi Thandi on 1 June 2010.  The Company Secretary had been M Thandi between November 2003 and December 2009.  Avi Thandi was appointed Company Secretary on 4 April 2010.  Avi Thandi resigned his appointments as Director and Company Secretary on 13 August 2010. 

 

41.        Goldenline held a standard international operator’s licence authorising five vehicles.  Its correspondence address recorded on the licence database was Charlcot, Alexandra Place, Wolverhampton.  Its operating centres were recorded as Unit 1, Avenir House, Bagnall Street, West Bromwich and Unit 4 Seven Sisters Road, Oldbury.  The Transport Manager was Prandi Thandi.  The sole director notified to the Traffic Commissioner was Kaka Singh.   On 18 March 2010, at a public inquiry, the operator had been fined for non-compliance with registered time tables for local services.

 

 

42.        On 20 July 2010, TE Lees wrote to the Company Secretary of Goldenline (who was Avi Thandi at the time) requesting the production of documents for vehicles operated under the licence between 1 May and 30 June 2010.  He did not receive a reply. 

 

43.        On 2 August 2010, TE Lees visited Charlcot, Alexandra Place, which was a private dwelling house and spoke to M Thandi.  He stated that all matters relating to A Line and Goldenline were being dealt with Avi Thandi at the Alma Street operating centre.  He thought that Kaka Singh should be in the country but could not give any further details.

 

44.        On 4 August 2010, TE Lees spoke with Avi Thandi who stated that he had taken over both A Line and Goldenline.  When visited at Alma Street later that day, Avi Thandi stated that he was “in the process” of purchasing the two companies and that his accountants were conducting pre-purchase checks and that once they had been completed he would be buying the companies.  He stated that he intended to be the sole director of both companies with M Thandi acting as Transport Manager for both licences.  He denied being an appointed director of either company and stated that the Traffic Commissioner had not been informed of the material changes relating to the company.  He stated that he been using the licence discs issued to A Line and Goldenline since June 2010. 

 

45.        Later that day, TE Lees wrote to the Company Secretaries of A Line and Goldenline informing them that a formal interview was to be conducted on 17 August 2010 in relation to apparent offences of failing to produce tachograph records.  No company officer of either company attended the interviews and no communication was received from either company.  TE Lees concluded that the discs of A Line and Goldenline were being “lent” to Avi Thandi and had been used to operate AK Travel and Coach Express vehicles since June 2010. 

 

46.        By call up letters dated 12 August 2010, AK Travel, A Line, Goldenline and Prinder Thandi were called to a public inquiry.  By further letters dated 16 August 2010, Coach Express and Jarnail Singh Thandi were called to public inquiry and by a letter dated 19 August 2010, A2B Coaches was called in. 

 

47.        On 25 August 2010, an on line application was made to the NWTA to change the operating centre of A2B Coaches from Cross House Farm to Manchester House, Villiers Street, Salford, Manchester.

 

48.        On 21 September 2010, Prinder Singh Thandi resigned as Transport Manager of Goldenline and A Line and on the same day, Kulbir Kaur surrendered the operator’s licence of A Line.

 

49.        The public inquiry took place on 23 and 24 September 2010.  M Thandi and Avi Thandi were present and represented by Mr Trubshaw, solicitor of Bradin Trubshaw solicitors.  TE Lees, VE Jones, VE Jewess and BCO Thompson were present on behalf of VOSA.

 

50.        The Deputy Traffic Commissioner outlined the basis upon which he was considering whether regulatory action should be taken in respect of the companies, M and Avi Thandi, Kaka Singh, Prinder Singh Thandi, Kulbir Kaur and Jarnail Singh Thandi.  He read out paragraph 20 of his decision dated 16 February 2009 in which he had warned M Thandi and Avi Thandi that in stepping back from revoking their operator’s licences, he was giving them a “very last chance” to operate their companies compliantly and that the warning was unequivocal.  The Deputy Traffic Commissioner did however make clear that whilst that warning had been given at the conclusion of the last public inquiry, he had not made any predetermination on any of the issues being considered at the present one and that he had yet to hear the entirety of the evidence.  He went through the conditions and undertakings that had been recorded on the licences of Coach Express and AK Travel in January 2009.  The Deputy Traffic Commissioner was then informed that Mr Trubshaw was not representing either Goldenline or A Line and that there were no directors of those companies present at the hearing.

 

51.        VE Jones then spoke to his reports.  He accepted in cross examination that there had been a clear improvement in the condition of the Appellants’ vehicles over the months leading up to the hearing and the fact that this had occurred following the withdrawal of LMG’s services did not surprise him.  Once suitable maintenance systems were in place, the standard of maintenance should be maintained and if the systems were not in place, it would nevertheless take some time for vehicles to become unroadworthy again.  He was taken through some prohibition items:

 

·       19 June 2009: vehicle MIJ 3409 was issued with a PG9 for four defects all of which should have been picked up during the DDR walk rounds.  He accepted that vandalism was a problem on public service vehicles and as a result some operators have tighter DDR walk round systems.  He accepted that all of the items could have been caused that day.

·       19 June 2009: vehicle RUI 2054 was issued with a PG9 for a faulty door.  This had been identified on the DDR of 16 June 2009.  It was then signed off by a member of maintenance the staff as “valve sticky”.  An invoice dated 7 May 2009 showed that work had been undertaken and so it might have been an intermittent fault.  But the PG9 was “S” marked because it should have been spotted during the DDR walk round. 

·       17 October 2009: vehicle L104 PWR was issued with a PG9.  The vehicle had not been inspected after a period of being “mothballed”.  It was back in operation on 8 September 2009 and whilst it had been MOT’d on 6 August 2009, that was no substitute for a PMI.  In any event the PG9 was nine weeks after the MOT.  VE Jones accepted that the brake hose which was the subject of the PG9 could have deteriorated between MOT and PG9.

·       17 October 2009: vehicle T200 NDY had been inspected on 9 October 2009 and the air leak from the nearside rear brake chamber for which a PG9 was issued on 17 October had been recorded during that inspection, although the leak would not have affected brake performance.

52.        VE Jones accepted that there had been an improvement in the MOT first time pass rate between the dates of his two reports.  The Deputy Traffic Commissioner posed the question “was it a reaction (to the first inspection) or a pro-action by the Operator?”.

 

53.        In answer to questions put by the Deputy Traffic Commissioner, VE Jones stated that the problems caused by “disc swapping” were that it was difficult to collate accurate statistics in relation to prohibitions issued on the road side or non-prohibitions and accurate statistics within fleet inspections and MOT’s.  VE Jones produced his pocket book in which he had recorded the following: “Vehicles operating with .. A Line Buses Ltd and .. Goldenline.  Both are K Singh licences (it was Mr Thandi’s brother).  Mr Thandi has 22 vehicles on contracts but only has authorisation for one AK Travel and eight on Coach Express”.

 

54.        TE Lees then gave evidence concerning his investigations into A Line, Goldenline and A2B Coaches, including the report of TE Smith.  His evidence was accepted on behalf of the Appellants.  In response to questions from the Deputy Traffic Commissioner, he stated that when he had approached M Thandi about A2B Coaches he was fully co-operative and frank and said that the vehicles displaying A2B Coaches discs were based at Alma Street.  The implication was that those vehicles were being used.  As a result, he did not arrange for roadside encounters to take place to obtain evidence that Thandi vehicles were being used with A2B Coaches discs in them.  The PMI records showed that Thandi vehicles were being inspected with A2B discs displayed in them and that indicated that the vehicles were being used with those discs so displayed.

 

55.        Robert Gibson, General Manager and Senior Vehicle Inspector for LMG gave evidence in accordance with the report of Mr Thompson.  He confirmed that the 33 vehicles listed on the schedule of vehicles which showed disc and registration number swapping, were all being operated by the Thandi group.  He was taken to PMI sheets which did not have the roadworthiness declaration signed on them.  Mr Gibson stated that he would not sign the declaration because it was the operators’ who were arranging for repair work to be undertaken and it was therefore for them to sign off the work.  That was the same for the pre-MOT check.  He had advised the Appellants at the beginning of the school holidays that any vehicles taken off the road until the following term should be inspected prior to the vehicle being used again, regardless of the scheduled date of the next inspection.  He produced PMI sheets which confirmed that vehicles had been used following a period of disuse without being inspected prior to use and that operator discs were being swapped between vehicles.  In cross examination, Mr Gibson confirmed that he could not say who was operating the vehicles when he was inspecting them; neither could he confirm that when he saw vehicle RUI 2053 being driven out of the depot without repairs to its brakes being undertaken, that the vehicle was being taken into service rather than being tested, although he had placed the vehicle outside and the next thing he witnessed was the vehicle being driven out of the yard.  Mr Gibson stated that large amounts of money had been outstanding to LMG prior to the company withdrawing its services from the Appellants.  £42,000 was then paid and the final amount outstanding was £2,967.

 

56.        BCO Thompson then spoke to his report and produced the correspondence between M Thandi and Mr Hollis.  His evidence was not in dispute, M Thandi informing the Deputy Traffic Commissioner that he accepted a 5% compliance rate in relation to the registered services that he had been operating.  The Deputy Traffic Commissioner then asked BCO Thompson whether the services that were being operated were for school contracts.  His reply was that they were not.  Rather, they were long distance local services registered on OLBAS and the timetables and road maps demonstrated that. In addition, he did not witness any school children getting on the buses during the monitoring exercise.  M Thandi then stated that the services had originally been operated by Lynx Solutions and had been registered for twenty five years and that they were running “in concurrence” with school buses.  The Deputy Traffic Commissioner then warned M Thandi that he should be careful not to incriminate himself any further by his honesty.  But M Thandi then accepted that he had not de-registered any of the services that he had been operating at the time of the previous public inquiry having interpreted the Deputy Traffic Commissioner’s condition as meaning that he must not register any new services, which he had not done. 

57.        The public inquiry was reconvened on 24 September 2010.  The Deputy Traffic Commissioner reviewed the position in relation to M Thandi’s evidence that he had been running registered services other than those relating to school contracts and that as a result, a finding that there had been a breach of a condition imposed on the licence would be made.  That meant that the Thandis may have been unlawfully claiming BSOG and if that was the case then the Deputy Traffic Commissioner would be minded to refer the matter for investigation.  Mr Trubshaw was given a short adjournment to take instructions and for M Thandi to consider how he was going to give evidence on this subject.  Upon resumption of the hearing, the Deputy Traffic Commissioner repeated his warning, adding that if he did not hear evidence upon the issue which amounted to an innocent explanation of why grants  were claimed, he would pass the files to the police.  He was not however, going to make any determination on the issue and M Thandi did have the right not to answer questions on the issue .  Mr Trubshaw informed the Deputy Traffic Commissioner that he had advised his clients not to answer questions on the issue.

58.        Following a further short adjournment, the hearing continued with M Thandi giving evidence.  He commenced by informing the Deputy Traffic Commissioner that he considered the condition previously imposed upon the group’s licences restricting registered services to school contracts to be unfair because he had told the Deputy Traffic Commissioner during the last public inquiry that they needed to operate long distance journeys which he had operated for twenty five years.  If he had known that the condition prohibited operation of registered services other than school contracts he would have appealed the Deputy Traffic Commissioner’s previous decision.  He contended that the Deputy Traffic Commissioner was “making a mockery” of him and making him look like a “criminal”.  There had been no reason for the Deputy Traffic Commissioner to impose a condition restricting registered services to school contracts.

59.        After a further short adjournment to allow Mr Trubshaw to explain to M Thandi that the Deputy Traffic Commissioner was not going to make any determinations on the issue of dishonesty at the conclusion of the public inquiry, M Thandi then continued giving evidence.  He stated that at the conclusion of the previous public inquiry, he had not hesitated in agreeing to give undertakings, including the employment of LMG, which had been very expensive, because he and his son had wanted to stay in business.  He had been operating PSV’s for twenty five years and his biggest concern was vehicle safety and the avoidance of corporate manslaughter.  They had spent £200,000 on maintenance and LMG had cost them £42,000.  The inspection pit had cost £20,000 and that was delayed because it had collapsed when it was initially dug out..  The rolling road equipment had cost £29,325.  They had spent a further £81,000 between January and June 2010.  They had not wanted to fall out with LMG but the Group was not very professional and then Mr Thompson had had an argument with Avi Thandi.   M Thandi said his son could give evidence about that (he did not).  But he then went on to say that Mr Thompson had “tried to blackmail” the Thandis because of unpaid bills.  M Thandi considered that it was the biggest mistake that he had made to employ LMG.  He then contracted with Greenman Vehicle Services  but then they found that they were not undertaking the PMI’s but were sub-contracting the work out, so the Thandis decided to undertake all maintenance “in house”, hence the letter requesting that the undertaking in respect of LMG be removed.  When that application was refused in August 2010, the Thandis then faced a dilemma and so employed Mike Jones Consultancy.  The Deputy Traffic Commissioner then indicated that he would not make any adverse finding in relation to the termination of the contract with LMG.

60.        In respect of the failure to send to the OTC and VE Jones parallel reports addressing the issues raised in the reports of LMG, M Thandi stated that a letter had been written to the OTC stating that they had obtained a DVD to give to the drivers to educate them in relation to vehicle inspections and the completing of reporting sheets.  It appeared that the letter (he did not state when it was sent) had not arrived at the OTC and no copy was produced for the Deputy Traffic Commissioner to consider.  As for the other issues raised in the LMG reports, the Thandis worked closely with Mr Gibson.  They had also effected a lot of changes within their operations; they had transferred the authorisation from City Solutions to Lynx Solutions; in July 2009, a letter was hand delivered to the OTC stating that if the Lynx Solutions authorisation could be transferred to Coach Express, the Lynx Solutions licence would be surrendered (the letter was not received by the OTC and no copy was produced).  M Thandi stated that the OTC had been contacted several times about the transfer of authorisation and the Thandis had been told that variation applications had to be submitted which they did.  They had then allowed the Lynx Solutions licence to lapse in the expectation that the variation applications would not take long.  As a result, the joint vehicle authorisation reduced to twelve and to solve that problem, vehicles were hired to Goldenline and that operator operated the school contracts that the Thandis had.  M Thandi was unable to produce any hiring agreements and said any paper trail there might be to show hiring agreements would have been held by Goldenline and in any event it was a “family matter”. Kaka Singh had owed the Thandis money and the hiring arrangement wrote off his debt (he did not explain how hiring vehicles to someone who owed the Thandis money wrote off a debt).  Kaka Singh was paying the drivers but they were employed by the Thandis. 

61.        In respect of the registered services, M Thandi repeated that he had emphasised that their long distance registered routes were the backbone of their business.  He thought that the condition prohibited the registration of new routes other than new school contracts.  He had not intended to deceive by continuing to run registered services other than school contracts. 

62.        M Thandi concluded by stating that he and his son operated a viable company that had survived the constraints imposed upon them.  The increase in authorisation should not have taken as long as it had (he did not address the issue of why adequate evidence of financial standing had not been provided which would have enabled the variation applications to have been granted).  He felt that he was “deliberately being put out of business”.  He asked “why is it I cannot get my authority increased so I can .. run  my operations the way I want to?” They had purchased new vehicles, with more on the way.  They had employed Mike Jones Consultancy and the consultancy was going to be used to produce the quarterly reports for the OTC.  The Thandis wanted to be in a position to increase their authorisation “very soon” and they wanted the Deputy Traffic Commissioner to be proud of them.  They had money saved up which they were going to use and M Thandi had sacrificed twenty five years of his life for the company and its employees.  He wanted to start operating nationwide services and use the licence of A2B Coaches to operate from Manchester. 

63.        In response to questions put to him by the Deputy Traffic Commissioner about the acquisition of A2B Coaches, M Thandi stated that he had purchased the company before November 2009 and that at some stage had been appointed Company Secretary.  Avi Thandi was the director.  They held the shares 50-50.  No vehicles were purchased with the business.  The vehicle discs purchased with the company had been used  to undertake some exploratory journeys in order to create time tables.  This took place in January 2010 when TE Lees had asked about the use of the A2B coaches discs.  They had now nominated an operator’s centre in Villiers Street in Manchester for the vehicles to be used under that licence although all of the vehicles owned by the Thandis were based in Birmingham.  Otherwise, vehicles were hired to A2B Coaches so that the operator could undertake the work it had.  He did not produce any documentation in support of his evidence that there were hire agreements or that A2B Coaches had its own work.  He said that he did not need to notify the Deputy Traffic Commissioner about the use of the Thandis vehicles under the A2B Coaches licence because there was no condition on the A2B Coaches licence requiring vehicles to be specified on that licence.  In any event, A2B Coaches were now part of the Thandi group and its discs if used, were only used temporarily to monitor services.  M Thandi stated that they had never used more vehicles than they were authorised to. The Deputy Traffic Commissioner then indicated he would go on to ask questions about the use of Goldenline and A line discs by the Thandi group at which point, Mr Trubshaw indicated that M Thandi was not going to continue giving evidence, having addressed the issues he wished to address.  In relation to the failure to notify the conviction at Daventry Magistrates Court, the Deputy Traffic Commissioner was informed that as it arose out of a VOSA prosecution, M Thandi did not think that he had to notify the OTC of it.

64.         When it came to Avi Thandi giving evidence, Mr Trubshaw informed the Deputy Traffic Commissioner that he only wished to give evidence in relation to the requirement that a second Transport Manager be nominated for AK Travel in respect of which he stated that he had applied for Jarnail Singh Thandi to be appointed as an additional Transport Manager for Lynx Solutions, Coach Express and AK Travel, having handed all three applications in at the same time.  He did not reply in writing to the letter of 13 October 2009 requiring him within fourteen days to nominate a second Transport Manager but he thought he must have made a telephone call, although he had no details or log to confirm the position and the Traffic Commissioner’s file did not include a telephone attendance to that effect.  He said that there was no benefit to him in not nominating Jarnail Singh Thandi as the Transport Manager for AK Travel. He had been undertaking his role as a Transport Manager but had been thinking about employing a second Transport Manager to assist. 

65.        The Deputy Traffic Commissioner asked where Jarnail Singh Thandi was and what steps had been considered in the event that Jarnail Singh Thandi was considered to have lost his good repute.  M Thandi stated that he could be a Transport Manager and another one could be found who would work full time.  He confirmed that Jarnail Singh Thandi had in fact been Transport Manager for all three licences.  He thought that Jarnail Singh Thandi had not attended the public inquiry because he had “panicked”. 

66.        M Thandi then dealt with the applications to increase the overall authorisation of vehicles.  He said that they had a lot of vehicles which at present could not be used.  Three new companies were proposed: one undertaking school contracts; one for coaches; one for registered bus services.  All they were asking for was the same authority they had previously enjoyed when the Lynx Solutions licence was in existence. 

67.        In respect of Avi Thandi’s unwillingness to give evidence, M Thandi stated that the Thandi group was jointly operated by himself and his son and they both accepted joint responsibility for the overall operations.  They discussed every issue. 

68.        Prior to the conclusion of the evidence, the Deputy Traffic Commissioner, having read a report submitted by Mike Jones Consultancy, returned to the issue of A2B Coaches.  M Thandi stated that the drivers of the vehicles displaying A2B Coaches were paid out of the “global account”.

69.        In his closing submissions, Mr Trubshaw stated that the Thandis acknowledged that they faced a difficult task but that they had concentrated on maintenance and that had improved and they had employed Mike Jones Consultancy.  They were simplifying the administration of their operations and that would avoid any issues of disc swapping.  The reduction in their overall authorisation was an error as a result of a mistaken belief that variation applications would be granted.  Had the applications been granted twelve months prior to the hearing, there would have been no issue of disc swapping.  M Thandi understood that if you bought a company then you were entitled to use the discs.  The purpose of purchasing A2B Coaches was to commence operations in Manchester; there was no fraudulent intent behind the purchase of that company and there was no “hard evidence” of them using the A2B discs for the benefit of the other companies.  Mr Trubshaw asked that M Thandi’s explanation of his continued operation of registered services in breach of the condition prohibiting all but school services, to be an understandable mistake as was his explanation for not notifying the OTC of the Daventry conviction.  Likewise Avi Thandi’s failure to notify a second Transport Manager on his own licence.  Mr Trubshaw addressed the consequences of regulatory action and submitted that revocation would not be proportionate. 

70.        In a very detailed and careful decision, the Deputy Traffic Commissioner made the following findings and found the following breaches:

 

a)    A breach of the undertaking to install a rolling road by 17 June 2010, the equipment having been installed in November 2010;

b)    A breach of the undertaking that every vehicle be tested on a rolling road at every PMI and that this breach was on-going, VE Jones having found three PMI sheets which did not record braking efficiency during his visit to Alma Street on 7 July 2010;

c)     In relation to maintenance generally, that whilst the condition of vehicles had improved and a large amount of money had been spent on maintenance, there had been a breach of the  maintenance related undertakings; he accepted the evidence of VE Jones and the unchallenged evidence of Mr Gibson that prohibitable defects were not being repaired and that PG9’s were being issued for defects identified during PMI’s and generally;

d)    A breach of the undertaking that parallel reports to those of LMG would be provided which addressed the issues raised;

e)    A breach of the undertaking that a new or additional, full time Transport Manager to Avi Thandi be nominated for AK Travel, there being no tangible evidence to show that any attempt had been made for the undertaking to be complied with;

f)      A2B Coaches was purchased with the Thandis being equal shareholders.  Avi Thandi was in control of the company from 1 November 2009.  The NWTA was not informed of the change of directorship or any ongoing material change affecting professional competence and change of ownership within 28 days;

g)    A breach of the condition that the OTC be informed of vehicles being used on the licences of Coach Express and AK Travel.  He adopted the unchallenged evidence of Mr Gibson that vehicles were being presented for PMI’s to LMG which were displaying discs that were not those of either Coach Express or AK Travel and he found that vehicles were seen in Thandi livery at roadside encounters displaying Goldenline discs; that the Thandi group required 22 vehicles to service their contracts; that the evidence of VE Jones and TE Lees that discs were being swapped between operator licences was not challenged;

h)     That regulation 22 of the Public Service Vehicles (Operator’s Licences) Regulations 1995 meant that a disc alone could not be hired from one operator to another.  M Thandi, whose evidence was adopted by Avi Thandi, stated that he was using the discs of A2B coaches;

i) Discs from A2B Coaches, Goldenline and/or A Line Buses were being used by Coach Express and AK Travel for hire and reward when no valid hire agreement was in place, contrary to reg.22.  Having summarised the evidence upon which he made this finding, the Deputy Traffic Commissioner found that it was inconceivable that that discs belonging to A2B Coaches and Goldenline were displayed in so many vehicles at PMI if the vehicles had not been operated displaying those discs.  He rejected the evidence of M Thandi that A2B Coaches discs were only displayed for timing runs and there was no tangible evidence, direct or indirect, of any hire agreement with any operator.  The Deputy Traffic Commissioner interpreted reg.22 as meaning that a hire agreement had to be in writing, otherwise, the regulation would provide a clear opportunity for abuse because of the inability of the police and VOSA to establish whether the vehicle was subject to a valid hire agreement;

j) The unchallenged  evidence of the BCO was that Coach Express operated registered services which were less than 5% compliant with timetables and that this percentage had fallen from 38% in January 2009;

k)     The fact that these services were not school contracts meant that there had been a breach of the condition prohibiting the operation of local registered services other than school contracts.  The Deputy Traffic Commissioner rejected M Thandi’s explanation for continuing to operate prohibited services: the condition was clear in its terms; the Thandis’ had been represented by Backhouse Jones, a specialist transport firm of solicitors and no appeal had been made in respect of the condition;

l) The conviction of Coach Express at Daventry Magistrates Court on 2 March 2009 had not been notified to the OTC within 28 days and the Deputy Traffic Commissioner rejected M Thandi’s explanation for that failure, relying on M Thandi’s previous experience at public inquiry as a result of failing to notify other convictions;

m)   There was no evidence that Goldenline had paid the financial penalty imposed upon it on 18 March 2010 and in the circumstances, the Deputy Traffic Commissioner found that it had not.

n)     Avi Thandi made a false statement to TE Lees on 4 August 2010 when he said that he was not a director of A Line.  He also failed to reply to correspondence sent to the Company Secretary of A Line on 20 July and 4 August 2010 and deemed to be received by A Line when he was the Company Secretary of the company.  A Line failed to produce the tachographs requested and failed to attend an interview;

o)    Avi Thandi made a false statement to TE Lees on 4 August 2010 when he said that he was not a director of Goldenline.  He also failed to reply to correspondence sent to the Company Secretary of Goldeline on 20 July and 4 August 2010 and deemed to be received by Goldenline when he was the Company Secretary of the company.  Goldenline failed to produce the tachographs requested and failed to attend an interview;

p)    The Deputy Traffic Commissioner balanced in favour of Coach Express, AK Travel,  M Thandi and Avi Thandi the improvement in the condition of vehicles and maintenance against the improvements only having been made following the maintenance investigation of VE Jones, the serious evidence of breaches of specific undertakings and conditions imposed on the licence and the clear warnings given at the last public inquiry.  He asked himself whether the operator could be trusted in the future to comply in accordance with Transport Tribunal decision Priority Freight (2009/225) and answered in the negative.  He asked himself whether the operator’s conduct was such that it ought to be put out of business in accordance with the Transport Tribunal decision of Bryan Haulage (2002/217) and answered in the affirmative.  Accordingly, the Deputy Traffic Commissioner found that Coach Express, AK Travel, M Thandi and Avi Thandi had lost their good repute and the licences were revoked under s.17(1) and Schedule 3 of the Act and17(2), 17(3)(aa) and 17(3)(c) of the Act;

q)    In relation to A Line Buses, Goldenline and Avi Thandi, the Deputy Traffic Commissioner noted that little if any credit could be given to the operators who did not appear despite Avi Thandi having recently resigned as Director and Company Secretary of each company.  The Deputy Traffic Commissioner asked himself the same questions as in (p) above and determined that the operators were no longer of good repute.  In relation to both companies, they had failed to respond to communications and Avi Thandi’s misconduct was aggravated by the false statements that he was not a director of either company.  The licences were revoked under s.17(1) and Schedule 3 of the Act and ss.17(2) and 17(3)(aa) of the Act;

r)       The Deputy Traffic Commissioner found that A2B Coaches and Avi Thandi had been involved in numerous breaches of reg.22 and that amounted to serious misconduct and that together with the failure to notify the NWTA of material changes including change of ownership of the company meant that it was proportionate to find that the good repute of the operator and Avi Thandi was lost.  Its licence was revoked under s.17(1) and Schedule 3 of the Act and ss.17(2), 17(3)(b) and 17(3)(e) of the Act;

s)     All orders of revocation were to take effect from 23.59 on 21 November 2010;

t)      Avi Thandi’s good repute as a Transport Manager was lost with immediate effect as a result of all of the adverse findings in relation to maintenance, the operation of vehicles and his failure to communicate relevant information to the OTC;

u)     Jarnail Singh Thandi and Prinda Thandi’s good repute as Transport Managers was also lost with immediate effect;

v)     Coach Express failed, without reasonable excuse to operate local registered services compliant to timetables; only 4.55% of those monitored were on time.  This failure was aggravated by the fact that no local registered service other than school contracts should have been operated by the company in any event.  This was a bad case and the Deputy Traffic Commissioner therefore imposed a maximum penalty of £550 x 8 vehicles which totalled £4,400 to be paid before 21 November 2010.  A condition was also imposed that Coach Express was prohibited from operating any local service for 12 months commencing 2359 on 21 November 2010.  All existing registrations were cancelled by order from the same date;

w)   In disqualifying M Thandi for a period of 18 months under s.28 of the Transport Act 1985, the Deputy Traffic Commissioner was satisfied that this was a bad case where M Thandi failed to comply with undertakings and conditions, failed to operate timely registered bus services and breached reg.22 on several occasions despite being warned at a previous hearing.  He also failed to notify a conviction.  In many respects, M Thandi was in a worse position than he had been in January 2009;

x)     In disqualifying Avi Thandi for 18 months under the same section with a further 12 months disqualification to run concurrently, the Deputy Traffic Commissioner relied on the global failings of the operations (as above), the making of false statements to TE Lees, the failure to respond to correspondence and ensure a representative of Goldenline and A Line attended interviews.  As Director of A2B he permitted breaches of reg.22 and failed to notify material changes;

y)     The applications to vary the licences of Coach Express, AK Travel, Goldenline and A2B Coaches were refused. 

 

71.        At the hearing of this appeal, the Appellants were represented by James Backhouse who produced, in addition to the grounds of appeal previously lodged, further grounds which formed the basis of the appeal.  In addition, he provided a Skeleton Argument for which we were grateful.

72.        His first ground of appeal related to vehicle hiring arrangements between Coach Express and AK Travel on the one hand and Goldenline, A Line and A2B Coaches on the other and the Deputy Traffic Commissioner’s interpretation of and reliance upon reg.22 of the 1995 Regulations which reads as follows:

 

Operators under hiring arrangements

22.

The person who is to be regarded as the operator of a vehicle which is made available by one holder of a licence to another under a hiring arrangement is the holder from whom the vehicle is hired in a case where-

(a) the holder to whom the vehicle is hired is not, under the hiring arrangement, entitled to keep the vehicle in his possession for a total period of more than 14 days;

(b) not less than 14 days have elapsed between the finish of any previous period (of whatever duration) in which the hirer to whom the vehicle is hired was entitled to the use of the vehicle under a hiring arrangement with the holder from whom the vehicle is hired and the start of the period mentioned in sub-paragraph (a) above;

(c) at all times when the vehicle is being used for carrying passengers for hire or reward during the period mentioned in sub-paragraph (a) above there is affixed to the vehicle a disc which has been issued to the holder from whom the vehicle is hired;

(d) the vehicle, if made available to the holder of a restricted licence, is not adapted to carry more than sixteen passengers; and

(e) the vehicle is not a licensed taxi made available to or by the holder of a special licence.

 

The Deputy Traffic Commissioner’s interpretation of the regulation was as follows:

 

“158. This means that a vehicle on its own can be hired by an operator who then use their own operator licence disc if the vehicle is used for hire and reward, or a vehicle from another operator and that same operator’s disc can be hired to a different operator when more vehicles than that operator is authorised to operate are required to cover peak business periods or emergencies.  However a disc alone cannot be hired from one operator to another ...

160. ... (i) no tangible evidence of any hire agreement with any operator was shown to me.

161. On that last point, (i), above I interpret regulation 22 to mean that a hire agreement has to be in writing in order to comply with regulation 22.  It would be a meaningless regulation if it was interpreted any other way and a clear opportunity for abuse because there would be no way that VOSA or the Police could properly check whether a vehicle was subject to a valid hire agreement unless any such hire agreement was in writing.”

Mr Backhouse submitted that the Deputy Traffic Commissioner appeared to interpret reg.22 to mean that a) the only way that a vehicle could be used by another operator is by falling within the provisions of reg.22; b) that reg.22 could only apply to a situation where an operator who hired a vehicle used its own disc; c) that the provision applied to the limited situation  where an operator required more than its maximum number of vehicles; d) that the regulation required a written hiring agreement.  All of these interpretations were wrong.  Reg.22 merely allowed the first operator under a hiring agreement to hire to another operator a vehicle with a disc for a limited period of 14 days.  This allowed for flexibility and was not limited to situations where an authorisation might otherwise be exceeded.  Whilst paragraph 158 of the Deputy Traffic Commissioner’s decision was a correct statement of the law save that reg.22 did not allow for vehicles on their own to be hired without a disc (although that was in fact the law) it was not a requirement for the agreements under reg.22 to be in writing and it was common for short term hiring agreements to be oral.  The issue of whether reg.22 applied to the operating arrangements of the Thandis was not raised in the call up letter and the issue was not explored in depth.  Neither was the issue of sub-contracting work between operators explored.

 

73.        Our starting point when considering the issue of disc swapping is the question of who was the operator of the vehicles which were owned by or registered to either Coach Express, AK Travel or the recently dissolved Lynx Solutions when those vehicles were seen to display the discs of Goldenline, A Line and A2B Coaches.  We remind ourselves of the interpretation of the phrase “operator of the vehicle” in s.81(1)(b) of the 1981 Act which is:

a)    The driver, if he owns the vehicle; and

b)    In any other case, the person for whom the driver works (whether under a contract of employment or any other description of contract personally to do work).

The operator of the vehicle must display a vehicle licence disc issued to that operator.  Vehicles can either be owned by an operator who is operating the vehicle for hire or reward or it may be leased or hired on a long term basis.  Whichever is the case, the disc displayed in those vehicles are those issued to the operator who is operating the vehicle for hire or reward.  The exception to this general rule is contained in reg.22 of the 1995 Regulations.  Under this regulation the operator from whom the vehicle is hired (for no more than 14 days) is still to be regarded as the operator under the hiring agreement.  The requirement for gaps of at least 14 days is to prevent long-term arrangements of hiring a vehicle along with a disc being disguised by short breaks.  If the disc of the operator who has hired the vehicle out under reg.22 is not displayed in the vehicle, then reg.22 ceases to apply and the operator hiring the vehicle for hire or reward will be operating the vehicles without a PSV licence.

 

74.        The Deputy Traffic Commissioner’s statement of the law on this issue at paragraph 158 is correct and we do not interpret the Deputy Traffic Commissioner’s decision to mean that the route of the unlawfulness of hiring or using discs of another operator is reg.22, although as Mr Backhouse conceded in any event, to hire or use discs of another operator is unlawful. 

75.        The second point arising out of the Deputy Traffic Commissioner’s interpretation of reg.22 is whether the regulation requires a written hire agreement.  We accept that there is no requirement within the regulation that the agreements must be in writing.  However, when there is evidence that an operator is displaying discs of another operator in his vehicles, it is incumbent upon him to show that such use of those discs is legitimate and a paper trail at the very least should be demonstrated if not a written agreement.  In this case, the evidence of the Thandis’ vehicles being used whilst displaying the discs of A Line, A2B Coaches and Goldenline was overwhelming leading to the irresistible conclusion that disc swapping was taking place (as had previously occurred). Whilst it appeared that Goldenline operated some vehicles of its own, A Line and A2B Coaches did not.  In relation to the latter operators, in order to demonstrate that the use of their operators’ discs in Thandi vehicles was lawful, the Thandis’ needed to demonstrate:

a)    That they were hiring or leasing vehicles to A Line and A2B Coaches pursuant to long term agreements which would then entitle those operators to display their own discs; and

b)    That A Line and A2B Coaches were employing the drivers; and

c)     Insofar as those vehicles were then undertaking Coach Express and AK Travel work, that they were then sub-contracting work to those operators.

This exercise would have required documentation to be produced, either in the form of written agreements or some other indirect but determining documentary evidence.  None was produced.  Whilst it may be overstating the position to require written agreements, some cogent evidence was required to establish the lawfulness of what was going on.  It is not enough to make a bare assertion of some “family” or other informal arrangement or that all the companies concerned were under the Thandi umbrella with wages being paid from the Thandi global account. 

 

76.        In respect of Goldenline discs, the same matters as would need to be demonstrated for A Line and A2B Coaches needed to be demonstrated or that Goldenline was in fact hiring its vehicles to the Thandis, an unlikely scenario bearing in mind that the Thandis had more vehicles than they needed to operate their services.  We are satisfied that the Deputy Traffic Commissioner’s findings in relation to disc swapping (which we emphasise is unlawful) were correct with the result that the Thandis were in breach of the undertaking that all vehicles used under the Thandis’ licences must be specified on the respective licences.

77.        Turning to the next complaint about the Deputy Traffic Commissioner’s reference to and determination under regulation 22, we do not accept that the failure to refer to the regulation in the call up letter was in any way a procedural irregularity.  The call up letter referred to the condition imposed on the licence in February 2009 which was intended to prevent disc swapping and the report of VE Jones and indeed the statement of LMG concerning disc swapping was enclosed with the letter.  It was abundantly clear that the issue of whether disc swapping had been taking place was likely to be a major issue for consideration. Regulation 22 provides the only basis upon which short term vehicle hire can be effected whilst using another operator’s disc.  The Deputy Traffic Commissioner had no means of knowing what explanation was to be put forward by the Thandis’ as to why the vehicles of Coach Express and AK Travel displayed discs issued to other operators whose companies and licences had been acquired by the Thandis at a time when they had insufficient authorisation to fulfil their contractual obligations.  They are experienced operators and had the benefit of legal advice.  No complaint was made that regulation 22 was being considered or that Mr Trubshaw was unable to deal with the issue of disc swapping.

78.        Finally, in respect of regulation 22, Mr Backhouse complained that the issue of sub-contracting should have been dealt with in greater depth.  The difficulty that Mr Backhouse faces with this argument is that when the Deputy Traffic Commissioner started to ask questions about the basis upon which the A2B Coaches discs were being used, M Thandi refused to answer any further questions.  It was open for Avi Thandi to give evidence on the point but he refused to answer any questions other than to deal with the absence of a second Transport Manager nominated on the AK Travel licence.  The Deputy Traffic Commissioner re-opened the issue concerning A2B Coaches to clarify the limited evidence that had been given on the point at the end of the second day.  In the absence of co-operation, documentary evidence and presentation of a case on the issue as to why the Thandis conduct was lawful, it was incumbent upon the Deputy Traffic Commissioner to himself consider the possible means by which vehicles can display another operator’s discs.  Whilst disc swapping is not strictly speaking a breach of regulation 22, it is unlawful and the Deputy Traffic Commissioner cannot be faulted for his approach to the issue.  In all the circumstances, we reject the ground of appeal relating to regulation 22.

79.        The next point made by Mr Backhouse related to the power to impose a condition on the operator’s licences requiring that vehicles to be used on each licence must be specified with the OTC and that vehicles could only be specified on one licence at any one time.  This power was purportedly exercised under s.16(3) of the 1981 Act but Mr Backhouse submitted  that this section applied only to the imposition of conditions to be attached to licences to regulate journeys to and from sporting events (see reg.7 of the Public Passenger Vehicles Regulations 1995) and was not applicable to the facts of this case.  We are able to agree with that submission.  Mr Backhouse referred us to s.26(5) of the 1985 Act which does provide Traffic Commissioners with the power to impose conditions in the terms imposed on the Thandis’ licences.  Mr Backhouse submitted that it would appear from the copy of s.26(5) that he had “downloaded” that the power had only recently been conferred by amendment to s.26(5) and perhaps as late as 9 February 2009 by the Local Transport Act 2008; that date fell  between the conclusion of the last public inquiry and the date of the Deputy Traffic Commissioner’s decision.  Having considered the amended section ourselves during the course of the hearing,  we agreed that it did appear that Mr Backhouse’s submission was correct and we further agreed that at the very least, the Deputy Traffic Commissioner should have invited representations before imposing the condition.  However, upon conclusion of the hearing, we considered  s.26(5) in its un-amended form and it was then clear that the power conferred by that section pre-dated the amendments which came into effect on 9 February 2009.  We are therefore satisfied that the submissions of Mr Backhouse on this point were misconceived.  However, the issue remained that the Deputy Traffic Commissioner, whilst exercising a power that he was lawfully entitled to exercise, had mistakenly attributed that power to s.16(3) of the 1981 Act.  In those circumstances, we are satisfied that the power was lawfully exercised and that the mistake could and should have been rectified if either the Thandis or their specialist legal advisors had either queried the exercise of the power under s.16(3) of the Act or had appealed the lawfulness of the condition.  If that had taken place, we have no doubt that the slip rule would have been used to rectify the Deputy Traffic Commissioner’s error and that is what we do now.  Any references to s.16(3) of th1981 Act in either the decision of 14 February 2009 or the decision of 29 October 2010 should be read so as to read s.26(5) of the 1985 Act.

 

80.        The next ground of appeal related to the Deputy Traffic Commissioner’s references to and warnings about possible unlawful claims for BSOG.  The issue was raised at the end of the first day’s hearing when M Thandi admitted that he had been operating registered services other than those which were school contracts.  The Deputy Traffic Commissioner questioned whether that had any implications on BSOG claims that the Thandis may have made but stated that BSOG was not within his jurisdiction. However, at the beginning of the second day, he raised the issue again and he alleged unlawful claims of BSOG.  At this point Mr Backhouse submitted that the Deputy Traffic Commissioner should have adjourned the hearing to allow the Thandis’ to consider the position.  In the event, there was no real opportunity for the Thandis to deal with other issues raised in the public inquiry when they had been threatened with a criminal investigation.  The Deputy Traffic Commissioner made it clear that unless the Thandis’ gave evidence upon the issue and that their explanation amounted to an innocent one for any claim they may have made, he would refer the matter to the police.  The issue then dominated the first half hour of the hearing, with the Deputy Traffic Commissioner then purporting to warn M Thandi of the risk of self incrimination but in fact the warning was more of a threat.  Mr Backhouse acknowledged that time was given to Mr Trubshaw to take instructions on the issue and to give his clients advice but that was insufficient bearing in mind that the BSOG issue had not been raised in the call up letter. In the event, M Thandi did not give evidence upon the issue and the Deputy Traffic Commissioner accepted his decision in this respect but he then referred to the issue in his decision. 

81.        We do not consider there to be anything in this point.  Firstly, until BCO Thompson had stated in his evidence and M Thandi had accepted that he had been operating registered services other than school contracts, the Deputy Traffic Commissioner had no knowledge of a possible or likely breach of the condition attached to the licence prohibiting those registered services.  He was not therefore in a position to raise the issue in the call up letter.  When he was aware of the position, he raised the issue at that moment and then returned to it the following day.  The Thandis were legally represented; Mr Trubshaw was offered and was given two adjournments to take instructions upon the issue and to give advice; he did not ask for more time.  Ultimately, neither M Thandi or Avi Thandi gave evidence on the issue and no adverse findings were made in relation to it.  There is nothing in the detailed decision from which it could be inferred that the BSOG issue featured in the Deputy Traffic Commissioner’s consideration of this very serious case.  Whilst the issue may have unsettled M Thandi at the beginning of the second day of the hearing, he only chose to give evidence upon certain issues and there was no indication that this choice was influenced by how the hearing unfolded at the beginning of the second day. 

82.        The next point raised by Mr Backhouse related to the condition prohibiting the operation of registered services other than school contracts.  Mr Backhouse accepted that the prohibition was clear in its terms.  However, he submitted that the Deputy Traffic Commissioner failed to order the cancellation of the Thandis’ registered services under s.26(3) of the 1985 Act at the same time as imposing the condition under s.26(1) of the Act, as he should have done. He had no power to make an order requiring the Thandis’ to cancel those registrations which were not school contracts because he had no power to force operators to de-register services.  It was for him to cancel them under s.26(3).  The beauty of the powers in ss.26(1) and 26(3) was that they were definitive.  Neither did the Deputy Traffic Commissioner require an undertaking from the Thandis that they cancel all services other than school contracts.  Mr Backhouse submitted that the only way in which a Traffic Commissioner should not exercise their dual powers under ss.26(1) and (3)  was when they wished to give an operator an opportunity to select which registered services they wished to cancel, for example, when a reduction in registrations was ordered.  Mr Backhouse argued that in all of the circumstances all the registered services operated by the Thandis were valid registrations.  This was further enforced by the transfer of the Lynx registrations to Coach Express on request after the condition had been placed on the licences.  By allowing the transfer, even if it was undertaken by delegated authority or by some administrative act and in error, the Deputy Traffic Commissioner was “stuck with it” and the continued operation of all of the registered services was endorsed and approved. 

83.        There is nothing in this point.  There is no requirement within s.26 of the 1985 Act to make an order of cancellation under s.26(3) when imposing a condition on a licence prohibiting vehicles being used for registered services under s.26(1). The powers are mutually exclusive and both discretionary.  The licensing system is based upon trust.  Allowing the Thandis to continue to operate school contracts in line with the evidence given by Avi Thandi during the public inquiry held in January 2009 was an act of mercy in the circumstances of the case.  It was within the knowledge of the Thandis which registrations served school contracts and/or the general public and in some instances one registered service might serve both.  It was perfectly proper in those circumstances to allow and trust the Thandis to determine which registered services either had to be withdrawn or modified.

 

84.        Mr Backhouse then moved onto the Deputy Traffic Commissioner’s introduction to the public inquiry in which he reminded the Thandis that he had previously given them a “last chance” to comply in stepping back from revocation in February 2009.  In referring to the “final warning” in his last decision, the Deputy Traffic Commissioner had fettered his discretion.

 

85.        We are satisfied that in referring to the “last chance” that he gave the Thandis in February 2009, the Deputy Traffic Commissioner was setting the scene for a public inquiry which on any view, was to deal with very serious issues of non-compliance against the background of a previous public inquiry at the end of which very serious findings of non-compliance had been made.  It was only natural that he should refer to his words of warning in those circumstances.  He made it clear that having reminded the Thandis of his previous findings, he had not heard the evidence and had not made any pre-determinations.  We do not consider that the Deputy Traffic Commissioner did fetter his discretion or appear to do so.

 

86.        Mr Backhouse then addressed us on what he described as core compliance issues.  Maintenance had “vastly improved”; non-compliance with the undertaking in relation to installing a rolling road was hindered by the collapse of the pit; he accepted that whilst the Thandis did not comply with “the letter of the undertakings” the main objective of the maintenance related undertakings had been achieved; he conceded that “better dialogue” was needed with the Deputy Traffic Commissioner; something had been done with driver training and there had been one letter in respect of the LMG reports (with no evidence of it having been received); a lot of money had been spent on maintenance; there was no evidence of dishonesty in acquiring operator’s licences with discs but no vehicles and then sub-contracting in a “loose family arrangement” to keep vehicles operating. They were not disc swapping, which was unlawful.  Mr Backhouse submitted that if one looked at the evidence as a whole, the proposal for consolidation of the Thandis’ operation was sensible and that was what they were in the process of doing.  There was no dispute that the penalty imposed for non-compliance with bus service registrations was appropriate but proportionality must be considered in relation to the evidence as a whole.  The Thandis were not naive about the position they were in but the way the second day of the public inquiry began had an adverse effect on them. 

 

87.        Mr Backhouse then submitted that we should allow the appeals and substitute our own decisions imposing a number of conditions and undertakings on the licence or alternatively, that we should remit the case for re-hearing.  He submitted that the tight control which would result from the various undertakings and conditions imposed would ensure that the Thandis could be trusted in the future and that the Bryan Haulage question could be answered in the negative. 

 

88.        This was a very bad case.  Conditions and undertakings were attached to the Thandis’ licences in February 2009 as an alternative to revocation. Every condition and undertaking was breached.  Maintenance was still a significant issue with prohibitable items not being addressed at PMI; registered bus services were being operated in breach of a condition and that breach was aggravated by a 95% non-compliance rate; disc swapping continued and at a greater level with three companies at least being either acquired or used for the purposes of using their authorisation to allow the Thandi contractual obligations to continue operating.  There was no attempt to produce evidence that even purported to show that the way that vehicle discs were used was legitimate.  For all of the reasons set out in the decision of the Deputy Traffic Commissioner we are satisfied that the Thandis, having been through a number of public inquiries in the past with different operations and in particular the public inquiry in January 2009, could not be trusted to run a compliant operation in the future.  It is a surprise that they had been allowed to continue to operate at that time but having given significant undertakings, they had been.  We have no doubt that the Deputy Traffic Commissioner was not plainly wrong to have made the orders that he did.  He was in fact, plainly right. 

89.        In the result, the appeals are dismissed and the orders of revocation and disqualification shall come into effect by 23.59 on 26 May 2011

 

 

 

 

Her Honour Judge J Beech

28 April 2011