Neutral Citation Number: [2012] UKUT 315 (AAC)

Appeal No.  T/2012/25

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

 

ON APPEAL from the DECISION of Roger Seymour Deputy TRAFFIC COMMISSIONER for the West Midland Traffic Area

Dated 2 May 2012

 

 

 

Before:

H. H. Michael Brodrick, Judge of the Upper Tribunal

Leslie Milliken, Member of the Upper Tribunal

George Inch, Member of the Upper Tribunal

 

 

Appellant:

FIRST CLASS FREIGHT LIMITED

 

 

 

 

Attendances:

For the Appellant: Philip Taylor, (Director) appeared in person on behalf of the Appellant

 

 

Heard at: Victory House, 30-34 Kingsway, London

Date of hearing: 24 August 2012

Date of decision: 10 September 2012

 

 

 

 

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that this appeal be DISMISSED.

 

 

 

 

 

 

 

 

 

SUBJECT MATTER:- Repute, Disqualification

 

 

CASES REFERRED TO:- Bradley Fold Travel Ltd & Peter Wright –v- Secretary of State for Transport [2010] EWCA Civ 695

 

 

 

REASONS FOR DECISION

 

 

1.           This is an appeal from the decision of the Deputy Traffic Commissioner for the West Midland Traffic Area to revoke the goods vehicle operator’s licence held by the Appellant and to disqualify Philip Taylor, (the sole director of the Appellant company), from holding or obtaining an operator’s licence for a period of 6 months.  The Deputy Traffic Commissioner directed that both orders should take effect from 2359 on 20 May 2012.

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

(i)                   The Appellant is the holder of a standard national goods vehicle operator’s licence, which authorised 1 vehicle.  This licence commenced on 27 January 2012 and was issued following an application dated 28 November 2011.

(ii)                 On 15 September 2011 an application by the Appellant for an operator’s licence for 3 vehicles was refused, on the ground that the Appellant did not have appropriate financial standing for that number of vehicles.

(iii)                On 14 November 2011 Robert Lees, a Traffic Examiner, met Stephen Ellis and Philip Taylor at a trading estate near Tamworth in order to carry out a records check.  This followed on from the retention of some documents after a vehicle was stopped on 7 October 2011.  At that time Stephen Ellis held an operator’s licence in his own name, “t/a First Class Freight”.  Philip Taylor introduced himself as the director of First Class Freight Ltd.  He told the Traffic Examiner that First Class Freight Ltd were the operators of the vehicles specified on the licence held by Stephen Ellis and that the company owned these vehicles, employed the drivers and scheduled and paid for maintenance.  The Traffic Examiner then asked if the Appellant company had their own operator’s licence.  Mr Taylor said that it did not but that it was in the process of applying for one.  The Traffic Examiner advised Mr Taylor that the Appellant company required its own operator’s licence.  The Traffic Examiner was then told that some 6 months earlier, when a VOSA Vehicle Examiner carried out a maintenance check he had advised Mr Ellis to change the trading name on his licence to ‘First Class Freight’.  The Traffic Examiner told them that the advice was incorrect.

(iv)                On 28 November 2011 Philip Taylor signed an application for a goods vehicle operator’s licence, on behalf of the Appellant.  The application was for a standard national licence authorising 1 vehicle.  At the top of page 2, in bold type, are these words: “Note: it is a criminal offence to give false information in this application”.  Section 14 of the application is headed “Previous licence history”.  At paragraph 14b Mr Taylor answered ‘No’ to the question: “Has any person named in this application (including partners, directors and transport managers) previously held or applied for a goods or public service vehicle operator’s licence in any traffic area?”  At paragraph 14c Mr Taylor also answered “No” to this question: “Has any person named in this application (including partners, directors and transport managers) ever had an application for a goods or public service vehicle operator’s licence refused by any EU licensing authority?” Immediately above Mr Taylor’s signature on the application was a declaration in these terms: “I declare that the statements made in this application are true and that all supporting evidence supplied with regard to my application is correct.  I understand that it is an offence to make a false declaration.”

(v)                 On 21 December 2011 Philip Taylor was interviewed under caution.  He told Mr Lees that the Appellant company had been using the licence held by Stephen Ellis since the middle of 2010 and that Stephen Ellis was acting as Transport Manager.

(vi)                On 23 March 2012 the Office of the Traffic Commissioner, (“OTC”), wrote to the Appellant to give notification of a Public Inquiry to be held on 27 April 2012.  The letter went on to set out the Traffic Commissioner’s powers, including the fact that revocation was mandatory following loss of good repute.  It also set out a summary of the evidence that the Traffic Commissioner would consider, while the evidence itself was provided in the form of annexes to the letter.  Two matters were said to be of particular concern.  First, that vehicles used by the Appellant company were specified on a licence held by Stephen Ellis t/a First Class Freight and used licence discs issued to that operator and second, that Mr Taylor failed to declare, in the application for the licence, that an earlier application had been refused.

(vii)              The Public Inquiry took place before the Deputy Traffic Commissioner on 27 April 2012.  Mr Lees was present as was Philip Taylor on behalf of the Appellant, together with the new Transport Manager, Mr Short.  Stephen Ellis had been called to the same Public Inquiry in order that the Deputy Traffic Commissioner could consider whether he fulfilled the requirements of good repute and professional competence as Transport Manager.  He did not attend.  The matters relating to him were considered in his absence.

(viii)             The Traffic Examiner, Robert Lees, gave evidence in accordance with his statement, the contents of which have been summarised above.  He added that although Mr Taylor had told him, on 14 November 2012, that there was an application for an operator’s licence in progress this was not, in fact, correct.  He went on to confirm that Mr Taylor had been quite open, from the start, about who was operating the vehicles, adding that it appeared that Mr Taylor didn’t realise that he should not be operating in that way.

(ix)                Philip Taylor then gave evidence on behalf of the Appellant.  He said that he was 27 years old and the sole director of the Appellant company, which was incorporated on 15 June 2009 in order to undertake general haulage.  He explained that his previous experience in that field was as a lorry driver for about 6 months at the age of 18 and that since then he had been a car salesman.  He said that he decided to buy a lorry when a friend, Gavin Ellis, the son of Stephen Ellis, needed a job and told him that he would ‘take care’ of the licence and any other matters.  

(x)                 Mr Taylor went on to explain that, by chance, he was present when the Vehicle Examiner, Mr Hickin came to the premises.  He described in greater detail how Mr Hickin pointed out that the name on the operator’s licence was wrong but that the name could be changed by completing the correct form.  He added that he now accepted that this was wrong but stressed that he was not trying to hide anything.  He said that the next thing he did was to employ a new Transport Manager, Mr Short.

(xi)                The Deputy Traffic Commissioner then asked Mr Taylor about the two applications for an operator’s licence.  Mr Taylor accepted that the first had been refused for financial reasons.  He said that the second, dated 28 November 2011, had been made “straight afterwards basically” and was for one vehicle.  He was then asked why he had answered “No” to the question at paragraph 14c, (see paragraph 2(iv) above).  The following exchange took place:-

“A: Yes sir.  Because I presumed … I instantly sent the letter back so I presumed you’re just following on.  I didn’t realise.  Obviously refused-

Q: You were making a fresh application?

A: Yeah but I didn’t see it like that.  She wrote me a letter back saying, ‘You’ve not got enough money’, so I just resent the forms back off again.

Q: Well, as far as I am concerned, that is a false declaration.

A: I agree, yeah, (inaudible).”

(xii)               When the Deputy Traffic Commissioner acknowledged Mr Taylor’s frankness and pointed out that he had also admitted borrowing another operator’s licence Mr Taylor responded by saying that he didn’t understand “any of it at the time”.  The Deputy Traffic Commissioner replied that it was Mr Taylor’s responsibility to find out and that, in fact, the false statement in the application had allowed it to go through unchallenged because the application was treated as if made by a complete newcomer to the industry.

(xiii)             Mr Taylor said that he had employed a Transport Manager, (Mr Stephen Ellis) to “keep the law straight at the time”.  The Deputy Traffic Commissioner pointed out that that person had been deceiving him and Mr Taylor agreed.  He said that he had contacted Mr Short as soon as he had spoken to Mr Lees.

(xiv)             Mr Short then gave evidence.  Initially he gave the address of a Public House in Wednesfield but when pressed by the Deputy Traffic Commissioner he said that he was currently living in Essex.  He accepted that this meant that he was about 150 miles from the operating centre.  He said that he had reached an agreement with Mr Taylor in May 2011 but that he did not know that at that time Mr Taylor was operating three vehicles illegally.  He accepted that he was aware that Mr Taylor wanted to apply for an operator’s licence on behalf of the Appellant company and that it was trading but he said that he never asked how it was trading if it did not have a licence.  When asked whether he was a Transport Manager for anyone else Mr Short said that he had been, for a company in Wales but that he had lost his good repute because the operator had made it impossible for him to do the job of a transport manager.

(xv)              At the end of the Public Inquiry the Deputy Traffic Commissioner indicated that he would give a written decision.  He began by setting out the issues and then summarised the evidence, in slightly more detail than we have done in the preceding sub-paragraphs.

(xvi)             The Deputy Traffic Commissioner then pointed out the gravity of using another operator’s licence and/or discs stating that not merely is it expressly forbidden by s. 38(1)(b) of the Goods Vehicles (Licensing of Operators) Act 1995, ["the 1995 Act"], but that it was also a criminal offence.  He gave Mr Taylor credit for his clear admissions of involvement in using another operator’s licence but rejected his assertion that this arose out of naivety and ignorance.  He did so because he found it inconceivable that Mr Taylor would not have been aware of the need for an operator of a heavy goods vehicle to hold an operator’s licence and because of his failure to question the use of operator licence discs in the name of another operator.  The Deputy Traffic Commissioner also pointed to a discrepancy in the evidence between Mr Taylor’s statement that he was unaware of the offences until his attention was drawn to them by Mr Lees and the evidence of Mr Short who said that he was approached by Mr Taylor in May 2011 to assist in applying for a licence.  He continued in paragraph 22:-

“Looking at Mr Taylor’s evidence as a whole I find as a fact that Mr Taylor was fully aware that he should have taken steps to apply for a licence from the outset and that his arrangement with Mr Ellis could not have been lawful.  As a result he knowingly operated two vehicles for a significant period of time without an operator’s licence”.

(xvii)            The Deputy Traffic Commissioner went on to consider over what period of time this had taken place.  He referred to the fact that the Appellant company was incorporated on 15 June 2009, that Mr Taylor became the registered keeper of one of the relevant vehicles on 5 May 2009 and that the Appellant became the registered keeper of another relevant vehicle on 1 September 2009.  As a result he concluded that the arrangement to use the licence held by Mr Ellis commenced around the middle of 2009.  He went on to conclude that the arrangement had continued until at least late September or early October 2011, judging by the evidence of the tachographs produced to Mr Lees.

(xviii)          The Deputy Traffic Commissioner turned to the question of the false declaration on the second application for an operator’s licence.  He rejected Mr Taylor’s explanation that this was simply a continuation of the first application, which had been refused on 15 September 2011.  He pointed out that Mr Taylor would have received a formal notification of the refusal of the first application and that he would have had to apply for a second application form.  Given the clear an unambiguous warnings set out in the form, which we have quoted above, the Deputy Traffic Commissioner concluded that the false statement was directly relevant to the issue of repute.

(xix)             The Deputy Traffic Commissioner went on to direct himself, correctly, that he should consider, first, whether the Appellant would be likely to be compliant in the future and, second, whether it was appropriate to put the Appellant out of business.  He concluded that: “the answer to both these questions must, at this point in time, be in the negative”. 

(xx)               As a result of these conclusions the Deputy Traffic Commissioner decided that the Appellant no longer satisfied the requirement to be of good repute and he revoked the licence, as he was compelled to do having made that finding.

(xxi)             He went on to consider the question of disqualification saying:-

“… taking into account his frank admissions and current inadequate efforts to establish a compliant operation I feel able to limit any disqualification to a period of six months from the effective date of revocation.  This should enable Mr Taylor to seek out and attend a training course of operators before attempting to re-enter the industry”.

(xxii)            On 19 May 2012 Mr Taylor gave Notice of Appeal on behalf of the Appellant.  He set out seven grounds of appeal to which we will refer in due course.

3.           At the hearing of the appeal Mr Philip Taylor appeared in person to represent the Appellant company.  His main points were (i) that he felt that it was a harsh decision, for a first offence, (ii) that the Appellant had had no warning, (iii) that the use of the discs from another licence was the transport manager’s responsibility and (iv) that he thought, at the time, that the second application was merely a continuation of the first.  These points reflected some but not all of the grounds set out in the Notice of Appeal.  However the grounds to which Mr Taylor did not refer in his oral submissions related to the fact that in relation to maintenance, safety, daily checks, the use of defect books and the like the Appellant was fully compliant.  We accept that these are all important issues and that the fact that the Appellant was compliant is very much to its credit however they are not, in our view, sufficient to outweigh the serious matters raised by the remaining points.

4.           In order for the appeal to succeed the Appellant must show that the decision of the Deputy Traffic Commissioner was plainly wrong.  The difficulty of that task was explained by the Court of Appeal in the case of Bradley Fold Travel Ltd & Peter Wright –v- Secretary of State for Transport [2010] EWCA Civ 695 , where Leveson LJ, giving the judgment of the Court quoted from a number of earlier decisions when setting out the correct approach.  Paragraph 39 of this decision ends with this quotation from Laws LJ:-

“The true distinction is between the case where the appeal court might prefer a different view (perhaps on marginal grounds) and one where it concludes that the process of reasoning, and the application of the relevant law, require it to adopt a different view.  The burden which an appellant assumes is to show that the case falls within this latter category.”

In paragraph 40 Leveson LJ spelt out what he understood Laws LJ to be saying and he went on to make it clear that this approach was applicable to appeals to the Transport Tribunal, which was the predecessor to the jurisdiction of the Upper Tribunal in relation to appeals from Traffic Commissioners.  He said this:-

“Thus, Laws LJ made it clear that the question was whether the appellate tribunal “concluded on objective grounds that that a different view from that taken by the Adjudicator was the right one, or (and we mean it to be the same thing) whether reason and the law impelled them to take a different view” ([53]).  For my part, this reasoning applies equally and with as much force to appeals from the Commissioner to the Transport Tribunal; neither do I read the recent decisions emanating from that tribunal to which we have been referred as suggesting to the contrary. ……”

5.           It follows that the question which we have to consider is whether reason and law compel us to take a different view either on the issue of loss of good repute or on the issue of disqualification or on both.  We must stress at the outset that the Deputy Traffic Commissioner had the benefit of seeing and hearing the witnesses, which is an important consideration in the overall assessment of the evidence in a case such as this.

6.           Having seen and heard from Mr Taylor the Deputy Traffic Commissioner concluded that Mr Taylor was aware of the need to apply for a licence from an early stage and aware that the arrangement with Mr Ellis, to use the discs from his licence, was unlawful.  We have summarised the reasons for this conclusion in paragraph 2(xvi) and (xvii) above.  In our view, on the material before him, the Deputy Traffic Commissioner was entitled to reach those conclusions.  We are not persuaded that reason and the law compel us to reach a different conclusion.  Using discs from another licence for the purpose of operating heavy goods, (or for that matter public service), vehicles is a serious matter because it means that the operation falls outside the jurisdiction of the Traffic Commissioner.  Traffic Commissioner’s play a central role in the enforcement of the regulatory regime for both types of vehicle.  That regime is intended to ensure, amongst other things, that heavy goods and public service vehicles are properly maintained and safely operated by operators who comply with the operator’s licensing system and compete fairly with other hauliers.  If follows, in our view, that knowingly operating outside the jurisdiction of the Traffic Commissioner, by using another operator’s discs, is a matter which clearly goes to good repute and is capable, on its own, of leading to a finding of loss of good repute.

7.            However in the present case we must also consider the conclusion that Mr Taylor, acting on behalf of the Appellant, made a false declaration in the second application for an operator’s licence.  The Deputy Traffic Commissioner rejected the explanation which Mr Taylor put forward, (and repeated before us), namely that he considered the second application as no more than a continuation of the first.  In our view the Deputy Traffic Commissioner was plainly right to reject this explanation.  Indeed he could have given several other reasons for saying that Mr Taylor must have known that it was a separate application.  The first application was rejected on 15 September 2011.  Mr Taylor must have been aware of that decision within a matter of days.  The second application was signed on 28 November 2011, which clearly contradicts the assertion made by Mr Taylor that it was made “straight afterwards basically”.  Mr Taylor frankly accepted that he had requested a new application form in order to make the second application.  He also accepted that he had paid another fee and that he had had to advertise on a second occasion.  In our view when all these factors are taken into account it must have been perfectly clear to Mr Taylor, at the time, that this was a new application and that the correct answer to the questions posed at paragraph 14(b) and 14(c) was ‘Yes’.  In our view making a false declaration in an application for an operator’s licence is also a serious matter which, again, on its own, is quite capable of leading to the conclusion that the applicant is not of good repute.

8.           Given the gravity of the two grounds on which the Deputy Traffic Commissioner found that the Appellant was not of good repute we cannot agree that this was a harsh decision.  Nor do we believe that this was a situation in which a warning would have been appropriate.  While it is true that a transport manager must “effectively and continuously” manage the transport activities of the undertaking for which he or she works and is now required to be familiar with a wide range of topics, including the law in relation to operator’s licencing, that does not mean that the person or persons who control an entity which operates heavy goods or public service vehicles is or are absolved of responsibility.  Such a person must know enough to ensure that someone employed as a transport manager is up to the job and they must also be able to supervise them to ensure that they do a proper job.  It is, after all, for the director or directors of a company to set the standards which the employees are required to meet.  It follows, in our view, that Mr Taylor is not entitled to blame the Transport Manager for suggesting the use of discs issued to Mr Ellis.  He should have known enough about the operator’s licensing regime to know that the suggestion was wrong and unlawful.

9.           For all these reasons we are satisfied that the Deputy Traffic Commissioner was correct in concluding that the Appellant company no longer satisfied the requirement to be of good repute.  It follows that revocation was mandatory and that the appeal against revocation must be dismissed.

10.        Mr Taylor also expressed concern about the disqualification.  It seems to us that the Deputy Traffic Commissioner took the view that Mr Taylor was a person who might well wish to make another attempt to enter the road haulage industry but that, if he did so, it was desirable in everyone’s interests that he was better informed about the nature of the regulatory regime, the requirements it imposes on operators and the obligations which fall on those who operate heavy goods and public service vehicles.  In our view this was a thoroughly sensible approach.  The period of disqualification was short and it was imposed for good reason and, in this particular case, with a specific purpose in mind.  We can see no basis on which we can properly interfere with this aspect of the decision.  In fairness to Mr Taylor we should add that he told us that he had sought advice as to whether he should obtain a Certificate of Professional Competence, with a view to acting as transport manager for the Appellant.  He said that he had been advised that acting as his own transport manager might give rise to a conflict of interest between his desire, as a director, to maximise profits and his duty as transport manager to ensure compliant operation at all times.  While we agree that this was good advice in relation to acting as transport manager for the Appellant company it overlooked the advantages which the qualification would have given Mr Taylor by ensuring that the transport manager was suitable in the first place and he was properly supervised thereafter.

11.        For all these reasons the appeal against the revocation of the licence and disqualification must be dismissed.  The Appellant was granted a stay pending the hearing of the appeal.  On the assumption that the decision as a whole was stayed the revocation will come into effect at 2359 on 21 September 2012 and the period of disqualification will commence at the same time.

 

 

 

 

His Hon. Michael Brodrick, Judge of the Upper Tribunal,

Principal Judge for Traffic Commissioner Appeals.

11 September 2012