Neutral Citation Number: [2013] UKUT 192 (AAC) Appeal No: T/2013/06

T/2013/11

 

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

(TRAFFIC COMMISSIONER APPEALS)

 

ON APPEAL FROM THE DECISION OF R H MCFARLANE,

DEPUTY TRAFFIC COMMISSIONER for the SCOTTISH TRAFFIC AREA,

DATED 20 DECEMBER 2012

 

Before:

 

Judge M Hinchliffe, Deputy Chamber President (HESC); Judge of the Upper Tribunal.

L Milliken, Member of the Upper Tribunal.

G Inch, Member of the Upper Tribunal.

 

Appellants:

MUNRO’S OF JEDBURGH LTD

 

MICHAEL JENKINS

 

SHELAGH JENKINS

 

 

Attendance:

 

For the Appellants: Ms L Shand QC for Munro’s of Jedburgh Ltd.

Mr T Nesbitt for Michael Jenkins and Shelagh Jenkins.

 

Appeals heard at:   George House, Edinburgh

Date of hearing: 3 April 2013

Date of decision: 18 April 2013

 

 

DECISIONS OF THE UPPER TRIBUNAL:

 

IT IS HEREBY ORDERED that:

·       the appeal of Munro’s of Jedburgh Ltd be dismissed;

·       the appeal of Michael Jenkins be allowed and the question of disqualification be remitted back to be considered afresh at public inquiry before a different Traffic Commissioner, following the issue of a new call-up letter;

·       the appeal of Shelagh Jenkins be dismissed

 

 

Subject Matter:

Proportionality; Illegal lending of operator licence discs; Repute; Disqualification and Section 28 Transport Act 1985; Necessity of appropriate notice prior to disqualification; Partnerships in Scotland and effect of new partners; Responsibility of partners.

Cases referred to:

2010/84 & 86 Coach Express Ltd

Thomas Muir (Haulage) Ltd v Secretary of State (1998 SLT 666)

Crompton t/a David Crompton Haulage v  Dept of Transport (North Western Traffic Area) [2003] EWCA Civ 64

2002/217 Bryan Haulage (No 2)

2009/225 Priority Freight

T/2010/29 David Finch Haulage

AJ Cassels (6/2000)

Pagoda Travel Ltd (11/2001)

1999 G36 Greylands Waste Ltd

 

 

REASONS FOR DECISIONS:

 

1)     This was an appeal from the decision of the Deputy Traffic Commissioner for the Scottish Traffic Area made on 20 December 2012 when, amongst other things, he:

·       revoked the operator’s licence held by Munro’s of Jedburgh Ltd (“Munro’s”);

·       disqualified Ewan Farish (as a director of, and transport manager for, Munro’s) from holding or obtaining an operator’s licence, or from acting as a transport manager, for two years;

·       revoked the operator’s licence held by the partnership trading as Jenkins Travel;

·       disqualified John Jenkins (as a partner in Jenkins Travel) from holding or obtaining a operator’s licence for two years;

·       disqualified Michael Jenkins (as a partner in Jenkins Travel) from holding or obtaining a operator’s licence for two years;

·       refused an application by Michael Jenkins (trading as Edinburgh Group Travel) for the grant of an operator’s licence;

·       disqualified Shelagh Jenkins (as a partner in Jenkins Travel) from holding or obtaining an operator’s licence for one year.

 

2)     The action taken against Munro’s was based on loss of good repute – section 17(1)(a); section 14ZA(2)(b), and Schedule 3 of Public Passenger Vehicles Act 1981 (as amended). The orders for the disqualifications of Shelagh Jenkins and Michael Jenkins were made under the power to disqualify PSV operators as set out in section 28 Transport Act 1985.

 

3)     Not all of the Deputy Traffic Commissioner’s decisions have been appealed. The matters that are the subject of these conjoined appeals are:

 

·       the revocation of the operator’s licence held by Munro’s;

·       the disqualification of Michael Jenkins from holding or obtaining an operator’s licence for two years.

·       the disqualification of Shelagh Jenkins from holding or obtaining a operator’s licence for one year;

 

4)     The Deputy Traffic Commissioner had directed that the revocations and disqualifications should come into effect at 23:59 hours on 31 March 2013 – representing a period of deferment of some three months from the date of his decision. Subsequently, stays were granted pending determination of the appeals by the Upper Tribunal. Mr Nesbitt, on behalf of all the partners trading as Jenkins Travel, requested that a further three-month period of deferment be granted before the revocation, and any disqualifications, should come into effect. Although some aspects of this request were not part of the substantive appeals before us, we agreed to consider Mr Nesbitt’s request at the conclusion of the case.

 

5)     The factual background to this appeal appears from the documents, the transcript and the Deputy Traffic Commissioner’s decision and is as follows:

(i)     Munro’s are the holders of a standard national public service vehicle operator’s licence authorising the use of 32 vehicles.

(ii)    On 28 October 2011 the Vehicle and Operator Services Agency (VOSA) received information from an official of Midlothian Council that two vehicles that were not being operated by Munro’s had been observed displaying Munro’s operator licence discs. It appeared that the vehicles were being operated by Jenkins Travel, a partnership, authorised to operate seven vehicles. In due course the Council official said (and the Deputy Traffic Commissioner accepted) that there were no notices displayed on the vehicles declaring that they were on hire to Munro’s.

(iii)  Following an investigation, a number of facts emerged. At the end of the 2010/2011 academic year, Jenkins Travel had been given the opportunity to take over a number of school contracts in addition to those that they already held. This additional work could not readily be undertaken within the authorisation then held by Jenkins Travel. Accordingly, in July 2011, a variation application for an increase in authorisation from Jenkins travel was received at the Office of the Traffic Commissioner. The partnership sought an increase in authorisation from 7 to 14 vehicles. This request was later amended to 13 vehicles.

(iv)  Perhaps naïvely, Jenkins Travel expected this application for a variation to be approved without difficulty, and in time for the start of the new academic year. However, there were a number of matters that needed to be considered before the requested increase could be granted, including finance and a maintenance history. Consequently, by the time of the incident on 28 October 2011, the authorisation held by Jenkins Travel remained at seven vehicles, with the application for an increase still under active consideration.

(v)   On 2 November 2011 a VOSA Traffic Examiner observed a third vehicle operated by Jenkins Travel displaying a disk in the name of Munro’s. He took possession of the disc. He asserted (and the Deputy Traffic Commissioner accepted) that there was no notice displayed on the vehicle declaring that it was on hire to Munro’s.

(vi)  The driver of the vehicle on 2 November 2011 informed the Traffic Examiner that it was common knowledge that Jenkins Travel were waiting for extra discs to come through and, in the meantime, had borrowed discs from Munro’s.

(vii) When subsequently questioned by the Traffic Examiner, a partner in Jenkins Travel, Mr John Jenkins, claimed that an arrangement had been reached whereby Jenkins Travel would hire vehicles to Munro’s, who would carry out the school contracts with three of Jenkins Travel vehicles being driven by employees of Jenkins Travel.

(viii)         It was not claimed at the time that Jenkins Travel (or Munro’s) had been utilising the vehicle hiring provisions of Regulation 22 of The Public Service Vehicles (Operators’ Licenses) Regulations 1995 – and if such a claim had been made there were a number of significant ways in which the requirements of the regulation had not been satisfied. For example, quite apart from the fact that the vehicles and drivers originated from Jenkins Travel rather than Munro’s and the only things to be hired were the operator licence discs, it transpired that Jenkins Travel had utilised Munro’s discs on four separate occasions in 2011 namely, 22 August to 2 September, 12 September to 23 September, 3 October to 14 October, and 5 October to 4 November. Although reference to this regulation was subsequently made in passing, there is no suggestion that the arrangement reached here was anything other than unlawful. We would only add that, in 2010/84 & 86 Coach Express Ltd, the tribunal has provided clear guidance in relation to vehicle hiring agreements under Regulation 22. There is also guidance on the VOSA website.

(ix)  It emerged in the course of the investigation, and in evidence at the public inquiry, that the arrangement between Jenkins Travel and Munro’s arose after Mr Michael Jenkins approached Munro’s as he looked for a way to service the new school contracts. The person he dealt with was Mr Ewan Farish, a director and transport manager at Munro’s. Michael Jenkins is the son of John Jenkins and Shelagh Jenkins. In due course, as the investigation continued, Michael Jenkins produced some invoices which purported to support the claim that Jenkins Travel had hired vehicles to Munro’s.

(x)   The Deputy Traffic Commissioner concluded that the account of vehicle hiring was untrue for a number of evidential reasons that are fully set out, and which have not been seriously impugned on appeal. He found that the invoices produced were not bona fide. He found that the true arrangement between Jenkins Travel and Munro’s was that Munro’s would loan three discs to Jenkins Travel. Munro’s did not hire any vehicles to Jenkins Travel and Jenkins Travel did not hire any vehicles to Munro’s. The arrangement concerning the discs was agreed by Mr Michael Jenkins and Mr Farish, although there was no written agreement. No thought was given by Munro’s to the maintenance of the vehicles that would be displaying their discs. The vehicles were Jenkins Travel vehicles and were driven by drivers employed by, and paid by, Jenkins Travel. When not in use, the vehicles were parked up at Jenkins Travel business premises. At one point in the evidence Mr John Jenkins said that although finance had not been discussed in any detail, but the arrangement required at some point that a payment be made by Jenkins Travel to Munro’s. It was said that Jenkins Travel paid £2,000.00 to Munro’s.

(xi)  As far as the Office of the Traffic Commissioner was concerned, the partners of Jenkins Travel were Mr John Jenkins and Mrs Shelagh Jenkins. However, it emerged that their son, Mr Michael Jenkins, had for some time held himself out as a partner. For example, in a contract with the FTA contained within the papers, Michael Jenkins had described himself in writing as a “partner”.

(xii) Mr John Jenkins explained to the Deputy Traffic Commissioner that Michael Jenkins had, indeed, been made a partner on the advice of the company accountant. Mr John Jenkins went on to accept that the partnership should have informed the Office of the Traffic Commissioner that “there was a third partner”, and confirmed that, in around 2007 “the accountant brought him in as a partner”. Mr John Jenkins went on to say that his son had, generally, been in charge of the day-to-day running of the office. In due course the solicitor representing Jenkins Travel and Michael Jenkins addressed the Deputy Traffic Commissioner in submissions, and he accepted that, on the advice of the accountants, Michael Jenkins had been brought in as a partner, for tax reasons a few years previously. The solicitor recognised on behalf of his clients that, perhaps, this change “should have been intimated at the time”.

(xiii)         Not surprisingly, the Deputy Traffic Commissioner found that, at all material times, the partnership of Jenkins Travel comprised Mr John Jenkins, Mrs Shelagh Jenkins and Mr Michael Jenkins. Mrs Shelagh Jenkins had not attended any of the hearings before the Deputy Traffic Commissioner and the Deputy Traffic Commissioner found that, although she was a partner, she was not active in the business. He was not able to form any other view about her (save that she had allowed her good name to be included in the list of partners) because she did not attend at any of the public inquiry hearings and therefore did not give any evidence. We observe in passing that Mrs Jenkins was not present at the hearing of her appeal before us, although she was legally represented.

(xiv)         The public inquiry call-up letters to Mr John Jenkins and Mrs Sheila Jenkins made proper reference to the Traffic Commissioner’s power, under section 28 of the Transport Act 1985, to disqualify any or all of the partners from obtaining or holding an operator’s licence either indefinitely or for a specific period - in the event of revocation of the partnership’s operator’s licence. This letter was not, however, sent to Mr Michael Jenkins because his involvement as a partner in Jenkins Travel had not been notified to the Office of the Traffic Commissioner.

(xv)In reaching his conclusions the Deputy Traffic Commissioner was clear as to the serious nature of the arrangement between Jenkins Travel and Munro’s. He said:

“The lending of the three discs in this case is a very serious matter. Discs are not transferable. They are not a form of commercial currency. The lending of discs unsettles the commercial playing field for all licensed operators. It strikes at the heart of good repute”

(xvi)         The Deputy Traffic Commissioner went on to find that Mr Farish had given him deliberately misleading information, as had Mr John Jenkins and Mr Michael Jenkins (who, it seemed, had fabricated invoices to try and support the dishonest explanations offered).

(xvii)        On the other hand, another director of Munro’s, Mr Bruce Campbell, had attended at the public inquiry and given evidence – and had impressed the Deputy Traffic Commissioner who said that Mr Campbell had allayed his concerns. The Deputy Traffic Commissioner accepted that Mr Campbell had no knowledge of discs being loaned by Mr Farish and concluded that no adverse finding against Mr Campbell as a director or transport manager could be sustained on the evidence

(xviii)      The Deputy Traffic Commissioner’s conclusions and orders, so far as they are relevant to this appeal, are set out above. It is pertinent to note that, having reached a favourable view of Mr Campbell, the Deputy Traffic Commissioner concluded that, in all the circumstances, he did not need to make an order disqualifying either Munro’s, or Mr Campbell, from holding or operating an operator’s licence in the future. Further, in considering the timescale for the implementation of the decisions dated 20 December 2012, the Deputy Traffic Commissioner said:

“to allow an orderly cessation of trading of Jenkins Travel and Munro’s of Jedburgh Ltd, and for Munro’s of Jedburgh Ltd to consider its position with regard to applying for a new licence, the orders and directions set out in this decision will come into force on 31 March 2013 at 23:59 hours.”

 

 

6)     At the hearing of this appeal, Munro’s were represented by Ms L Shand QC. Shelagh Jenkins and Michael Jenkins were represented by Mr T Nesbitt.

 

7)     Ms Shand’s first point was that, in deciding to revoke the licence held by Munro’s, the Deputy Traffic Commissioner had applied the wrong test. This, she said, was illustrated by the arrangement of findings in the written decision.

 

8)     This is how the Deputy Traffic Commissioner set out his thinking:

 

“227. Lending discs is one aspect of the situation that Mr Farish has created for Munro’s. Giving me misleading information culminating in my determination that Mr Farish is not a credible witness is another aspect. Taking them together leads me to conclude that I cannot trust Mr Farish.

 

228. Mr Farish is, however, one of two directors (and transport managers). Inter alia the legislation requires me to have regard to “each of the company’s directors…”. It follows that the conduct of Mr Farish alone is sufficient for me to determine the Munro’s of Jedburgh Ltd is no longer of good repute. As such I do not trust him both at this time and in the future.

 

229. However I must also consider whether as a (further) consequence of Mr Farish’s wrongdoing, Munro’s of Jedburgh Ltd ought to be put out of business. In his concluding submission, Mr Mackie submitted that it would be disproportionate to do so. I do not agree. The conduct is so serious. As already stated, it strikes right at the heart of good repute. It shatters the relationship of trust between the Traffic Commissioner and licence holder. The nature of the conduct is such that I cannot be satisfied that Munro’s of Jedburgh Ltd is likely to be compliant operator in the future with the consequence that it does require to be put out of business.

 

230. That being so, as provided for in section 17(1)(a) of the Act, I revoke the licence held by Munro’s of Jedburgh Ltd”

 

9)     Ms Shand produced a bundle of authorities that we have considered carefully. We trust that she will forgive us if we mention only those that seem to us to be the most salient, and to refer, in addition, to one of our own.

 

10) In Thomas Muir (Haulage) Ltd v Secretary of State (1998 SLT 666) the Court of Session said:

 

“It does not follow that Traffic Commissioner is prevented from taking into account, where appropriate, some considerations of a disciplinary nature and doing so in particular for the purpose of deterring the operator or other persons from failing to carry out their responsibilities under the legislation. However, taking such considerations into account would not be for the purpose of punishment per se, but in order to assist in the achievement of the purpose of the legislation. This is in addition to the obvious consideration that a direction may be used to provide direct protection to the public against dangers arising from the failure to comply with the basis on which the licence was granted. Whether or not such disciplinary considerations come into play must depend upon the circumstances of the individual case.”

 

11) In Crompton t/a David Crompton Haulage v  Dept of Transport (North Western Traffic Area) [2003] EWCA Civ 64, the Court of Appeal considered whether intimidating and threatening behaviour by a licence-holder following a public inquiry should have led to a subsequent finding of loss of good repute, even after apologies had been offered. The court held that there must be a relationship of proportionality between the finding and the sanction, and that this relationship must have a direct bearing on the approach to be adopted in any set of circumstances relating to the question of whether or not the individual (or company) has lost good repute. In this regard, the focus should be on the licence-holder’s fitness to hold a licence. Behaviour which is reprehensible, but is somewhat remote from the business of holding an operator’s licence may be serious, but it may not be such as to undermine fitness to hold a licence. At paragraph 24 of the judgment, Kennedy LJ stressed that this did not mean that the Traffic Commissioner had to expressly refer to proportionality, or to anything other than directly relevant domestic legislation.

 

12) In 2002/217 Bryan Haulage (No 2) the Transport Tribunal considered the effect of the Crompton judgment:

 

“In applying the Crompton case it seems to us that Traffic Commissioners and the tribunal have to reconsider their approach.  In cases involving mandatory revocation it has been common for findings to have been made along the lines of “I find your conduct to be so serious that I have had to conclude that you have lost your repute: accordingly, I have also to revoke your licence because the statute gives me no discretion”.  The effect of the Court of Appeal’s judgment is that this two-stage approach is incorrect and that the sanction has to be considered at the earlier stage.  Thus, the question is not whether the conduct is so serious as to amount to a loss of repute but whether it is so serious as to require revocation.  Put simply, the question becomes “is the conduct such that the operator ought to be put out of business?”.  On appeal, the tribunal must consider not only the details of cases but also the overall result.”

 

13) A further case, not included in Ms Shand’s bundle but which is generally regarded as a further helpful gloss, is 2009/225 Priority Freight. Here, the tribunal said:

 

“The third point taken by Mr Laprell was that the Traffic Commissioner gave no reasons for concluding that ‘the conduct was such that the appellant company ought to be put out of business’.  There will be cases where it is only necessary to set out the conduct in question to make it apparent that the operator ought to be put out of business.  We are quite satisfied that this was not such a case.  On the contrary this was a case which called for a careful assessment of the weight to be given to all the various competing factors.  In our view before answering the ‘Bryan Haulage question’ it will often be helpful to pose a preliminary question, namely: ‘How likely is it that this operator will, in future, operate in compliance with the operator’s licensing regime?’  If the evidence demonstrates that it is unlikely then that will, of course, tend to support a conclusion that the operator ought to be put out of business.  If the evidence demonstrates that the operator is very likely to be compliant in the future then that conclusion may indicate that it is not a case where the operator ought to be put out of business.  We recognise, of course, that promises are easily made, perhaps all the more so in response to the pressures of a public inquiry.  What matters is whether those promises will be kept.  In the present case the appellant company was entitled to rely on the old saying that ‘actions speak louder than words’.”

 

14) Ms Shand submits that the Deputy Traffic Commissioner reached his conclusion first (repute was lost) and then went on to find, as a consequence, that Mr Farish could not be trusted and deserved to be put out of business. We think that this is an inaccurate interpretation, and omits to place the Deputy Traffic Commissioner’s words in the context of the overall decision and, importantly, within its factual context.

 

15) It seems to us that the purposes of the legislation are not achieved, and the public interest is not protected, by too formulaic an approach. Traffic Commissioners will express themselves in different ways. What matters is that the end result is the outcome of an accurate application of the law to a fair, balanced and sequential analysis of the facts and overall seriousness, undertaken in a manner consistent with the relevant authorities.

 

16) We take as our starting point the conduct that led to the public inquiry, and the Deputy Traffic Commissioner’s findings of fact and his analysis of seriousness. These seem to us to be evidentially grounded and adequately explained in his written decision. Munro’s, through the deliberate and dishonest actions of Mr Farish acting without the knowledge and consent of his fellow-director, had allowed three of the company’s operator licence discs to be illegally used by Jenkins Travel. The arrangement may or may not have been for personal financial gain, but the Deputy Traffic Commissioner could see no other likely explanation.

 

17) The arrangement had the consequence that, at certain times, Jenkins Travel used more public service vehicles for the carriage of students on the public road than they had authorisation for, and it provided an apparent means whereby Jenkins Travel might hope to deceive the authorities about what they were doing. It was an abuse of the authorisation held by Munro’s. It amounted to Munro’s giving Jenkins Travel the appearance of an increase in authorisation without anyone checking maintenance, finance and the other essential criteria that were occupying the Office of the Traffic Commissioner at the material time. Far from being remote from the business of holding an operator’s licence, this conduct went right to the heart of the system, and it undermined and damaged it. The regulatory role of the Traffic Commissioner was usurped. Such conduct by a director is manifestly relevant to the question of fitness to hold an operator’s licence and possess licence discs. As we said to Ms Shand, it has long been regarded as at the extreme end of seriousness. And, as an inescapable but aggravating feature, all parties to this unlawful arrangement attempted to lie about it and cover it up.

 

18) At paragraph 227, the Deputy Traffic Commissioner asked himself the ‘Priority Freight question’ and concluded that he could not trust Mr Farish. In our view, any other conclusion would have been extraordinary. Then, at paragraph 228, Deputy Traffic Commissioner considered the fact that the other director and transport manager had not been involved. Could the conduct of Mr Farish alone bring down the company? This, we consider, was a very reasonable question. The Deputy Traffic Commissioner concluded that the conduct of Mr Farish alone was “sufficient for me to determine the Munro’s of Jedburgh Ltd is no longer of good repute”. The Deputy Traffic Commissioner then re-stated the lack of trust created by Mr Farish’s conduct.

 

19) This was not, on our reading, an example of inverted thinking. Rather, it was a proper consideration of the effect of the conduct of one of two directors on the crucial relationship of trust that must exist between an operator and the Traffic Commissioner. Was the conduct of this one director sufficient to permit the Deputy Traffic Commissioner to go on and consider the ‘Bryan Haulage question’ in relation to the company? Clearly, it was – and we would have been astonished if the Deputy Traffic Commissioner had come to any other view.

 

20) So then, at paragraph 229, the Deputy Traffic Commissioner considered the ‘Bryan Haulage question’. He found that the conduct of the operator, through the conduct of one of its directors, struck at the heart of good repute. It shattered the relationship of trust between the Traffic Commissioner and licence holder. The nature of the conduct was such that the Deputy Traffic Commissioner could not be satisfied that Munro’s were likely to be compliant in the future (at least, with Mr Farish as a director, which he still was at the time of the public inquiry) with the consequence that it did require to be put out of business as the holder of an operator’s licence and the holder of licence discs.

 

21) In our view, since the Deputy Traffic Commissioner is not required to specifically refer to proportionality or to adopt a formulaic approach, we consider that the analysis set out in the decision complies with the legal framework, and is both clear and logically sequential. This ground of appeal fails.

 

22) Ms Shand’s second point was that the Deputy Traffic Commissioner had given insufficient weight to the positive factors, particularly the effect on the livelihoods of the company’s employees, the damage to local employment, and the fact that Mr Campbell (the other director) was not involved. Ms Shand argued, if we understand her correctly, that the Deputy Traffic Commissioner’s decision not to disqualify Munro’s suggested that the decision to revoke was not balanced, and was disproportionate and inconsistent. If the conduct was bad enough to revoke, it was bad enough to disqualify.

 

23) We think that the answer to this lies in what the Deputy Traffic Commissioner set out to achieve, in pursuance of the purposes of the legislation and of the operator licensing scheme. Mr Farish, it is clear, was a lost cause, and Ms Shand did not seek to suggest that his disqualification was wrong in principle. We pointed out that the Deputy Traffic Commissioner would have had no power to disqualify Mr Farish as a director if he had not, first, revoked the licence of the company of which Mr Farish was a director. That aside, it is clear that the Deputy Traffic Commissioner wished to leave the door open for Munro’s if (and only if) Mr Farish stepped down as a director (and as a transport manager). He allowed time for the company to consider its position with regard to applying for a new licence. In due course, Ms Shand confirmed that Mr Farish had now stood down and the company had, indeed, made an application for a new licence.

 

24) In all the circumstances, we find that the Deputy Traffic Commissioner reached a measured and a balanced view. He recognised (as the tribunal has often said) that revocation did not necessarily and inevitably mean disqualification (see, for example, T/2010/29 David Finch Haulage). The Deputy Traffic Commissioner offered a possible way forward in a way that, we find, was constructive, recognised the positive features, and was entirely consistent with the Thomas Muir approach. This ground of appeal also fails.

 

25) There were no other legal arguments of substance in relation to Munro’s. In essence, Ms Shand’s arguments amounted to little more than a disagreement with the Deputy Traffic Commissioner’s findings of fact, and his assessments of seriousness and fitness. For our part, we find that neither law nor reason impel us to interfere, and the appeal of Munro’s of Jedburgh Ltd is dismissed.

 

26) On behalf of Mr Michael Jenkins and Mrs Shelagh Jenkins, Mr Nesbitt submitted a skeleton argument for which we were grateful.

 

27) The first argument in relation to Michael Jenkins was that when he became a partner in the business, a new entity was created that should have sought a new operator’s licence. It did not do so and, technically, did not hold an operator’s licence after that point. Consequently, Michael Jenkins had not been a partner in an entity that held an operator’s licence and therefore could not be disqualified under section 28.

 

28) This, we find, is an ingenious argument that, if correct, would have the effect of giving Michael Jenkins an advantage over a compliant new partner who had properly notified the Office of the Traffic Commissioner of his addition to the partnership. Mr Nesbitt, graciously, recognised that his argument was technical, but he referred us to the Senior Traffic Commissioner’s Statutory Guidance Document (No 5) dealing with legal entities. At paragraph 17, the Guidance states:

 

“Any two or more individuals can be partners. In England and Wales where a new partner joins the business or where an existing partner leaves the business the partnership is terminated in law unless specifically allowed for in the written partnership deed (agreement). …”

 

29) Paragraph 19 continues:

 

“In Scotland partnership is an association between two and 20 persons formed to carry on a common business (excluding practising solicitors, accountants and members of the recognised stock exchange). Scottish law allows the partnership, or a firm, to be set up without any written or oral agreement between the partners although a written agreement is usual. Partnerships can operate under the name to the partners or under another name. In Scotland, partnership is a separate legal entity and legal proceedings can be instituted against that partnership under its trading name …”

 

30) Paragraph 86 continues:

 

“In the past the custom may have arisen which has allowed partners to change by simply notifying the Traffic Commissioner through the Central Licensing Office, which might then lead to a check of the financial standing of the remaining partners. The legislation allows this approach in Scotland but does not accord with the law in England and Wales …”

 

31) Jenkins Travel was, originally, a partnership between John Jenkins and Shelagh Jenkins. There was no written or oral partnership agreement but there came a time, in or around 2007, when Michael Jenkins became an additional partner. In Scots law, a separate personality is accorded to the firm itself and all that happened in the present case is that the existing partners, now joined by their son, continued to carry on the business. It is clear that they intended and agreed to carry on. There is no evidence that they caused any of their contracts or other commercial arrangements to be terminated. At the very least, of course, the Office of the Traffic Commissioner should have been notified but, had it been the view of the partners that the previous entity had ceased to exist and that a new entity had been created, then the onus was upon them to notify the Traffic Commissioner and to make a fresh application for a new licence. They did not do so.

 

32) In any event, we consider that a careful analysis of the wording of section 28 of the Transport Act 1985 provides a complete answer to this point. By section 28(5) the power to disqualify in relation to a partnership shall be exercisable also:

 

“where that person operated vehicles used under the licence in partnership with other persons, in relation to any of those other persons”.

 

33) Thus, where Mr John Jenkins and Mrs Shelagh Jenkins operated vehicles used under the Jenkins Transport Licence with another person, namely Michael Jenkins, he too can be disqualified, subject to the usual principles of fairness and natural justice. We therefore consider that this point fails.

 

34) However, this leads to Mr Nesbitt’s second point, namely that Michael Jenkins did not receive an appropriate call-up letter. Mr Nesbitt readily accepted that the blame for this lay entirely with Michael Jenkins and the partnership. However, applying the jurisprudence from the tribunal over many years, including AJ Cassels (6/2000) and Pagoda Travel Ltd (11/2001), we consider that when the Deputy Traffic Commissioner decided that disqualification had to be considered, the best course would have been for him to have adjourned this aspect of the public inquiry and for all matters to have been dealt with at a subsequent hearing.

 

35) We express no view as to whether the matter could have been canvassed and the problem overcome at the public inquiry. Pagoda Travel Ltd suggests not, but that case did not involve a person whose involvement in the operation of the licence had been kept from the Traffic Commissioner. Michael Jenkins was legally represented at the public inquiry and it is possible that arrangements could have been made to overcome the lack of notice in relation to possible disqualification - but only if Michael Jenkins or his representative had felt able to address the question of disqualification there and then, which we think unlikely.

 

36) It follows that the failure to give proper notice in relation to possible disqualification, albeit caused by a failure by Michael Jenkins or the partnership to advise the Traffic Commissioner’s Office of Michael Jenkins’ involvement, means that the decision to disqualify Michael Jenkins must be set aside so that appropriate notice can be given and the matter re-considered in the light of any pertinent evidence and submissions made.

 

37) We considered whether we could deal with the question of whether to disqualify Michael Jenkins ourselves. But we are hampered by the same irregularity of process and have concluded that the matter should be considered afresh by a different Traffic Commissioner at a public inquiry convened after an appropriately worded call-up letter has been sent. Michael Jenkins will have been advised that all options, including no disqualification, a shorter disqualification, the same disqualification, or a longer disqualification, are open to the new Traffic Commissioner - who will, no doubt, wish to look carefully at the invoices produced by Michael Jenkins in the course of the VOSA investigation.

 

38) The appeal of Michael Jenkins is therefore allowed, and the question of his disqualification is remitted back to be considered at public inquiry before a different Traffic Commissioner, following the issue of a new call-up letter.

 

39) So far as Mrs Jenkins is concerned, Mr Nesbitt contended that, given that she was not directly involved in the matters which gave rise to the taking of disciplinary action, and had no active role in the management of the partnership, an order of disqualification was too harsh. Mr Nesbitt drew a comparison between the case of Mrs Jenkins and that of Mr Campbell, the director of Munro’s, who had not been disqualified.

 

40) We were reminded of what the tribunal stated in 1999 G36 Greylands Waste Ltd and consider that, even though that case related to directors, some general guidance may also be extracted in relation to partners. We accept that legally the role and duties of directors and partners may differ and that there are many different kinds of partner, including what is colloquially known as a ‘sleeping partner’. However, the Traffic Commissioner is entitled to know who he or she is dealing with, and it is important that a person who is not involved in any meaningful way with an operation does not give legitimacy, respectability or the veneer of principled business standards to an enterprise in which they have no real involvement and over which they have no direct supervision or responsibility.

 

41) We consider that the starting point, especially where the Traffic Commissioner has not been kept in the picture or previously told otherwise, is that the Traffic Commissioner is entitled to assume that partners are all equally responsible for the conduct of a partnership, with the result that they are all equally culpable for bad management or culpable behaviour by the operator partnership. It is, of course, open to any partner to come along to a public inquiry and provide persuasive proof to the contrary. For example, he or she may be able to demonstrate, through credible evidence, that their responsibility for a certain state of affairs was negligible or that their culpability was small. A partner may be able to show, for example, by production of the minutes of partners’ meetings, that they warned against the very problem which has given rise to the public inquiry but that they were out-voted.  It might be very unfair in those circumstances to blame the partner who gave a timely warning but all the more necessary to take action against those who ignored the warning.  It may be possible to show that individual partners have well-defined roles so that, for example, one partner was very much more responsible for maintenance and road safety than others.  That might enable some of the partners to avoid criticism (although it will not necessarily do so) but it may also heap greater responsibility upon others. In such cases it will be for the Traffic Commissioner to assess the respective culpability of the individual partners on the basis of the evidence adduced.

42) In the present case, Mrs Jenkins was noticeable by her absence. She did not, as Mr Campbell did, positively impress the Deputy Traffic Commissioner. She had allowed herself to be identified as a partner of Jenkins Travel and thereby added her good name to the partnership. She failed to advise the Office of the Traffic Commissioner that she was a partner in name only. She has not subsequently given a positive account of herself in relation to the conduct of the partnership and must share some responsibility for it.

 

43) The Deputy Traffic Commissioner, rightly in our view, sought to bring the partnership business of Jenkins Travel to an end, without providing a route for it to re-emerge. In our judgment, a distinction can properly be drawn between her case and that of Mr Campbell at Munro’s, and the Deputy Traffic Commissioner also drew an appropriate distinction between her case and that of her husband by imposing a shorter disqualification. We see nothing inconsistent, improper or excessively harsh in this approach. We find no good reason to interfere. Mrs Jenkins’ appeal is dismissed.

 

44) In relation to the date when all of the Deputy Traffic Commissioner’s orders and directions shall come into effect (with the exception of the disqualification of Michael Jenkins which is set aside and remitted for fresh consideration) we consider that the Deputy Traffic Commissioner gave ample time for appropriate arrangements to be made. We direct that the revocations and disqualifications shall now come into effect at 23:59 on 17 May 2013.

 

 

 

Judge Mark Hinchliffe, DCP

18 April 2013