Neutral Citation Number: [2013] UKUT 429 (AAC)

Appeal No.  T/2013/39

 

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

 

ON APPEAL from the DECISION of

Beverly Bell, Senior Traffic Commissioner for the

North West of England Area dated 30 May 2013

 

 

 

Before:

Her Honour Judge J Beech, Judge of the Upper Tribunal

John Robinson, Member of the Upper Tribunal

David Rawsthorn, Member of the Upper Tribunal

 

 

Appellants:

 

 

RIBBLE VALLEY COACHES LIMITED & JOHN PILKINGTON

 

 

Attendances:

For the Appellants: No appearance

 

Heard at: Field House, 15-25 Bream’s Buildings, London, EC4A 1DZ

Date of hearing: 20 August 2013

Date of decision: 2 September 2013

 

 

 

 

DECISION OF THE UPPER TRIBUNAL

 

IT IS HEREBY ORDERED that this appeal be ALLOWED to the limited extent that the direction that the licence of Ribble Valley Coaches Limited is void is set aside and that an order of revocation with immediate effect is substituted for it.  The appeal by John Pilkington that his disqualification from holding an operator’s licence for an indefinite period is DISMISSED

 

 

 

SUBJECT MATTER:-  Whether a licence which is held by a limited company is void when that company is acquired by a person who is disqualified.

 

 

CASES REFERRED TO:-  None

 

 

 

 

REASONS FOR DECISION

 

 

1.           This was an appeal from the decision of the Senior Traffic Commissioner for the North West of England Traffic Area made on 30 May 2013 when she directed that the standard international operator’s licence of the Appellant company was void under s.28(2A) of the Transport Act 1985 (“the 1985 Act”). 

 

2.           The factual background appears from the documents and the Traffic Commissioner’s written decision and is as follows:

 

(i)              The Appellant company is the holder of a standard international PSV operator’s licence granted in August 2006 authorising eight vehicles.  The sole director, company secretary and transport manager is John Pilkington.

(ii)             Mr Pilkington’s operator’s licence history is as follows: On 27 November 2000, he applied for a standard national PSV operator’s licence trading as John Pilkington.  On 2 May 2001, the application was granted (OL 5217).  That licence was revoked at public inquiry on 11 June 2004 and Mr Pilkington was disqualified for an indefinite period under s.28 of the Transport Act 1985. 

(iii)            On 22 October 2004, Mr Pilkington applied for a PSV operator’s licence (OL 0510).  On the form he declared that the licence would be held in his name trading as Pilkingtons Accrington Limited.  He was also the nominated Transport Manager.  The documentation associated with the application described Mr Pilkington as the Managing Director/Transport Manager. That application was refused in November 2004. 

(iv)           Mr Pilkington claims that in or about 2009, he applied to have the order of disqualification lifted.  Whilst there is no decision within the Tribunal papers, it appears that his application must have been unsuccessful, if made in the first instance.

(v)             On 6 June 2011, Mr Pilkington became the company secretary and sole director of the Appellant company.  On 28 June 2011, the Office of the Traffic Commissioner (“OTC”) received a licence renewal checklist.  That notified the OTC that Mr Pilkington had replaced the previous director of the Appellant company and that he was to be the nominated transport manager.  A Regional Intelligence Unit request was made by the case worker dealing with the licence.  The RIU responded:

“Checks show that John Pilkington is linked to revoked licence PC0005217 & refused licence PC1040510.  At a previous PI John Pilkington also lost his repute indefinitely. ...”

Rather than act upon that information, it would appear that the case worker then requested the transport manager TM1 form and the director information form be completed and returned.  A further Regional Intelligence Unit request was then made and the response informed:

“At PI 11/06/04 Raymond Pilkington and John Pilkington both lost their repute and both were disqualified from being the holders of an operators licence for an indefinite period”. ..”

(vi)           It would appear that, as a result of human error, rather than referring the matter to the Senior Traffic Commissioner (“STC”), the case worker added Mr Pilkington’s name as director and nominated transport manager to the Appellant’s licence.  Subsequently, Lancashire County Council made a complaint about the company and the Appellant was invited to a directions hearing by the STC on 17 December 2012.  She was unaware at that stage of Mr Pilkington’s links with the Appellant. In the event, no one attended the hearing on behalf of the Appellant and the STC proceeded to make directions, inviting representations.  Then on 19 March 2013, Mr Pilkington was recorded as the nominated transport manager by the EU Regulations team.

(vii)          When the STC finally became aware of Mr Pilkington’s association with the licence, the Appellant was informed by a letter of 7 May 2013 of her intention to hold a preliminary hearing to consider the Appellant’s operator’s licence.  The hearing was to take place on 30 May 2013.  The letter further informed the Appellant that the STC had intended to convene a public inquiry pursuant to s.17(1)(a) of the Public Passenger Vehicles Act 1981 (“the 1981 Act”).  Good repute, financial standing, professional competence, prohibitions, undertakings and the disqualification of the transport manager and of the “operator” were all in issue.  However, Mr Pilkington’s continued disqualification meant that the STC required representations from the Appellant company at the outset.  S.28 of the 1985 Act was set out.  The Appellant was advised that the operation of all vehicles must cease with immediate effect.  The Appellant was asked to confirm whether it would be attending the hearing and was informed that an adjournment would only be granted in exceptional circumstances.  No response was received. 

(viii)         On 30 May 2013, the only person in attendance at the hearing was a representative from Lancashire County Council.  The STC set out Mr Pilkington’s history and described the situation as a serious one.  Mr Pilkington had acquired the Appellant company and the OTC did not “pick up on the fact” that Mr Pilkington was disqualified.  The effect of that was that the Appellant’s licence was void and as a consequence, it had no authority to operate vehicles.  The STC went on to make that direction and requested that VOSA remove the discs from the Appellant’s vehicles. 

(ix)           On 4 June 2013, Michael Dunstan, Transport Consultant, sent an email to the STC.  He informed the STC that the Appellant was concerned as to the effect on “hundreds of passengers” should the operator’s licence remain void.  He expressed the view that the STC’s direction that the licence was void was unfair as the OTC had had four previous opportunities to take action again the Appellant:

a)    In a letter dated 21 January 2008, a  hand written note stated “keep an eye on him”;

b)    When the operator’s licence details were amended in 2011;

c)     When Lancashire County Council complained;

d)    When a European licence was granted in 2013.

Mr Dunstan described himself as an intermediary to broker a compromise that was acceptable to the STC.  Further email correspondence was sent by Mr Pilkington in which he asserted that he had not been connected to the licences referred to sub-paragraphs (ii) and (iii) above and any assertion that he was, was defamatory.  A subsequent response to a freedom of information request confirmed the information set out in sub-paragraphs (ii) and (iii). 

3.           At the hearing of this appeal, the Appellant did not attend, Mr Pilkington having informed the Tribunal that he would not be attending as “the date coincides with an important medical appointment.  Also we cannot fund a trip to London”.  As no application for an adjournment had been made on behalf of the Appellant, the Tribunal determined to decide the appeal upon the papers before us. 

4.           The detailed grounds of appeal inform the Tribunal that the Appellant was “taken over by John Pilkington” on 6 June 2011.  All relevant information was sent to the OTC and the licence was renewed.  The Appellant had been operating compliantly for two years.  Complaint is made about the circumstances in which the Appellant’s vehicle discs were seized following the order being made; the length of time that was taken to change the VOSA “on-line status” of the Appellant following the STC’s decision; the fact that the status then read “revoked” and not “void”; that the decision of the STC was not sufficiently reasoned for Mr Pilkington to answer it although it was assumed that the decision was based upon his disqualification in 2004.  Mr Pilkington argued that the grounds for him losing his good repute in the first place were no longer appropriate: “according to the Rehabilitation of Offender’s (sic) Act Mr Pilkington is of good character as he has no unspent convictions.  In any case, the offence that Mrs Bell based her repute decision upon was not relevant to his operator’s licence.  In addition John Pilkington was never a Director or Transport Manager prior to taking over Ribble Valley Coaches and the 2004 order just says that he is disqualified from being the holder of a licence”. 

5.           The grounds of appeal conclude that: “Mr Pilkington has all the relevant professional competence and licence requirements as specified in the regulations.  He has brought the company into financial security since the takeover in June 2011.  There have been no traffic violations or prohibitions.  The company is a legitimate limited company with a registered office and all accounts and returned filed up to date”.  It was considered that sufficient passage of time had passed since 2011 to demonstrate that Mr Pilkington was a fit and proper person to hold a licence and the Tribunal was asked to overturn the STC’s decision and to restore the Appellant’s licence.

6.           Our starting point is that Mr Pilkington remains a disqualified person from holding an operator’s licence.  He appears not to have either appealed the original order of disqualification in 2004 or appealed the refusal to grant him a further licence in 2004 (OL 0510); neither did he appeal the refusal to set the order of disqualification aside which he claimed was made in 2009.  If however he did appeal, then those appeals must have been unsuccessful.  In the absence of any recent unsuccessful application to the STC to set the order of disqualification aside which had then been the subject of an appeal, this Tribunal is not in a position to assess whether the order of disqualification should remain.  The Tribunal is without the original decision supporting the disqualification order (despite repeated requests being made by the Tribunal staff) or indeed any of the documentation relevant to the failed application for a licence in 2004 or the failed application to have the disqualification order set aside in 2009.  In the result, the Appellant’s request that the Tribunal now find that Mr Pilkington is of good repute is refused.  It is for Mr Pilkington to persuade the STC that he is of good repute by way of a fresh application.

7.           The Tribunal is sure that whilst a disqualified person remains subject to such an order then he cannot be considered to be of good repute and neither can a company of which he is the sole director and nominated transport manager.  It is extraordinary and concerning that the OTC failed to refer the Appellant’s change of details to the STC in 2011 when it was being proposed that a disqualified person become the sole director and transport manager of a company that holds an operator’s licence.  But we do not consider that the errors made within the OTC were such that Mr Pilkington should benefit from them.  He knew only too well that the only way in which his disqualification order could be lifted was by an application to that effect.  We do not find that the errors made by the OTC alter the position in relation to his disqualification.

8.           The issue then to be determined is whether the STC was in error in making the direction that she did at the hearing of 30 May 2013.  The letter calling the Appellant to the hearing was a fully compliant call up letter for the purposes of holding a public inquiry although the reasons for holding a preliminary hearing in the first instance were set out.  It must have been in the mind of the STC that if s.28(2A) of the 1985 Act applied, then she had no jurisdiction to hold a public inquiry, the operator’s licence being void.  However, it was also made clear that she was considering taking regulatory action under s.17 of the 1981 Act. 

9.           Mr Pilkington has not provided any explanation for the Appellant’s non-attendance at the hearing on 30 May 2013.  Neither was a request for an adjournment made.  We are satisfied that in those circumstances,  it was within the STC’s discretion to proceed to make a determination in this serious case.  Our concern is whether the determination that s.28(2A) of the 1985 Act applied in this case and that the licence was void as a result was correct in law rather than there being a finding that the licence should be revoked under s.17 of the 1981 Act.  S.28(2A) applies if a “person” obtains a PSV licence while he is disqualified, rather than that person acquiring the controlling interest of a company which holds such a licence which is the case with Mr Pilkington and is covered by s.28(4) of the 1985 Act, subject to the relevant direction having been made when the person was disqualified.  It may be that this is the sort of case where “piercing the corporate veil” may be appropriate to determine who in fact holds the licence but we have not had the benefit of legal argument on this point and we are not therefore in a position to make any definitive determinations on the law.  We have considered whether it would be appropriate to allow this appeal and to remit the matter back to the STC for further consideration but being satisfied as we are, that regulatory action should have been taken at the very least under s.17(1)(a) of the 1981 Act that in those circumstances, this is an appropriate case for setting aside the determination that the operator’s licence was void under s.28(2) of the 1985 Act and substitute our own determination that it be revoked under s.17(1)(a) as a result of the Appellant no longer satisfying the requirements of ss.14ZA(2)(b), (3)(a) and (3)(b) of the 1981 Act.

10.        In the result, the appeal is allowed to the limited extent that the direction that the Appellant’s operator’s licence is void be set aside and an order that the licence be revoked with immediate effect under s.17(1)(a) of the 1981 Act be substituted for it.  Mr Pilkington’s disqualification remains in force.

 

 

 

Her Honour Judge J Beech

2 September 2013