Neutral Citation Number: [2013] UKUT 525 (AAC) Appeal No: T/2013/47

 

 

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

(TRAFFIC COMMISSIONER APPEALS)

 

ON APPEAL FROM THE DECISION OF JOAN AITKEN,

TRAFFIC COMMISSIONER for the SCOTTISH TRAFFIC AREA,

DATED 20/6/2013

 

 

Before:

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

Mr L Milliken, Member of the Upper Tribunal.

Mr G Inch, Member of the Upper Tribunal.

 

 

 

Appellant:

DUNDEE PLANT COMPANY LTD

 

 

Attendance:

For the Appellant: Mr J McLaughlin; Culley & McAlpine, Solicitors.

 

 

Appeal heard at: George House, George Street, Edinburgh

Date of hearing: 27/9/2013

Date of decision: 23/10/2013

 

 

DECISION OF THE UPPER TRIBUNAL:

 

IT IS HEREBY ORDERED that the appeal be dismissed. The period of 12 weeks suspension ordered by the traffic commissioner will come into effect at 23:59 hours on Saturday 30 November 2013.

 

 

 

Subject matter:

Failure to employ Transport Manager;

Concealment of failure, and making untrue statements to the traffic commissioner;

Suspension of operator’s licence for a period of 12 weeks.

 

 

Cases referred to:

2002/167 A Cooper t/a C-Fare (Oban)

 

REASONS FOR DECISION:

 

1)     This was an appeal from the decision of the Traffic Commissioner for the Scottish Traffic Area made on 20/6/2013 when she suspended the appellant’s goods vehicle operator’s licence for a period of 12 weeks.

 

2)     The factual background to this appeal appears from the documents, the transcript 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 with authorisation for 7 vehicles and 5 trailers. The licence was first granted in 1994. The company directors at the time of grant were Mr Hasan and Mr Hovell, and they continued as such up to the time of the public inquiry.

(ii)    When the licence was applied for, in 1994, the nominated transport manager was named as Mr William J S Leith.

(iii)  In 1996, an application was made for the licence to be varied and, again, Mr Leith was named as transport manager.

(iv)  In 1999, 2004, and again in 2009, the routine 5-year check-list had to be completed by the operator and, on each occasion, Mr Leith was named as current transport manager.

(v)   Following the implementation of EU Regulation 1071/99, traffic commissioners across Great Britain sought to check, update and confirm records with regard to transport managers and, in many cases, this included requests for a questionnaire to be completed and for the submission of original certificates of professional competence (CPC).

(vi)  On 10/9/2012, after two letters requesting information about the appellant’s transport manager had gone unanswered, the traffic commissioner’s office indicated by letter that she was proposing to revoke the operator’s licence – although she was prepared to allow the appellant one final opportunity to complete and return the required form.

(vii) On 26/9/2012 a completed questionnaire was received. The transport manager was named as Mr James Cumming and a copy (not the original) of his CPC was enclosed. An immediate reply from the traffic commissioner’s office requested that the appellant complete the appropriate form for a change of transport manager, and also requested Mr Cumming’s original CPC. No response was received from the operator.

(viii)         On 29/10/2012 the traffic commissioner’s office wrote again and, given increasing concerns, raised additional questions seeking clarification as to the dates when Mr Leith ceased to act as transport manager, and when Mr Cumming took over.

(ix)  Mr Hovell replied on 5/11/2012 stating that the company was unable to proceed with Mr Cumming as transport manager. The letter added that: “Mr Leith left our employment at the end of August 2012”.

(x)   On 22/12/2012, the traffic commissioner sought corroborative documentation confirming the date when Mr Leith left the employment of the company. A lengthy reply was received which failed to directly address the issues raised, and failed to provide any evidence. Consequently, a further letter was sent to the appellant company requiring answers. On 19/2/2013 Mr Hovell replied, admitting that Mr Leith left the company’s employment on 29/11/1996.

(xi)  It is clear that, since 1996, the company has operated without a properly nominated and active transport manager in place. Unsurprisingly, the traffic commissioner decided to convene a public inquiry, which took place over two days in May and June 2013.

(xii) At the public inquiry, Mr Hasan said that, when Mr Leith left, an arrangement was reached whereby the company would contact Mr Leith should they need him – but they did not, in fact, ever do so. Mr Hasan said that all the subsequent false declarations were “naïve”. Mr Hovell had dealt with correspondence from the traffic commissioner’s office and it was accepted that the letter stating that Mr Leith left the company at the end of August 2012 was totally untrue.

(xiii)         On the positive side, despite the lack of a transport manager, the company’s compliance with its maintenance and its drivers’ hours obligations was good. Mr Hasan said that revocation now would directly affect 7 drivers, and the company was not in a strong financial position, having failed to make a profit since 2008.

(xiv)         Mr Hasan was specifically asked by Mr McLaughlin what would happen if the licence was suspended. He said that he would have to hire lorries in – but if the suspension lasted for any length of time, it would be difficult due to the cost of hiring vehicles (together with drivers) whilst, at the same time, having to continue to pay his own drivers – although he could possibly find other duties for his own laid-off drivers within the business for the period of any suspension.

(xv)Mr Hovell gave evidence and said that there had not been a transport manager for the entire 16 year period between 1996 and 2012. He accepted that untrue statements had been made to cover tracks and avoid a difficult situation. However, the company had engaged a new transport manager, Mr Smith, who had made a start implementing the necessary systems. (Mr Smith, in fact, also gave evidence – detailing the work he had done to date.)

(xvi)         Mr Hovell resigned as a director before the conclusion of the public inquiry.

(xvii)        The traffic commissioner gave a written decision. She noted the positive aspects, particularly the satisfactory maintenance and drivers’ hours arrangements in place over the years, and the belated appointment of Mr Smith. Moreover, an in-house full-time employee had been identified as a potential successor to Mr Smith.

(xviii)      On the other hand, the hard facts remained – for 16 years this operator, holding a standard licence, had operated without the continuous and effective control and supervision of a suitable and qualified transport manager, in direct breach of the requirements of the Goods Vehicles (Licensing of Operators) Act 1995. The position was seriously aggravated by the repeated falsehoods and deceits, over the entire period, specifically designed and intended to mislead the traffic commissioner.

(xix)         The traffic commissioner decided that the case merited revocation and director disqualifications. However, by what she called: “a gossamer thread of mercy”, the traffic commissioner held back from finding that the appellant had lost its repute. She took into account that Mr Hovell had resigned. However, she said that she:

“… must put down a marker, not least out of respect for all those other operators who operate compliantly and who take their transport manager arrangements seriously”.

(xx)The traffic commissioner quoted from an unreported decision of the tribunal (when HH M Brodrick had considered an application for a ‘stay’):

“Other operators with knowledge of this case may be tempted to say to themselves – ‘this operator appears to be getting away with it so why should we bother to incur expenditure of time, trouble and money to run a compliant operation?’ In my view, it only needs one or two other operators to adopt this approach in response to this case to lead to greater and greater numbers doing so in future. If that happens there is a real risk that the operators’ licensing system, which has made a significant contribution to road safety, will be fatally undermined.”

(xxi)         The traffic commissioner suspended the licence for a period of 12 weeks, during which time the vehicles on the licence could not be used on any operator’s licence. Subsequently, a stay was granted pending appeal to this tribunal.

 

3)     At the hearing of this appeal, the Appellant was represented by Mr McLaughlin who had drafted the grounds of appeal. He subsequently submitted a skeleton argument for which we were grateful.

 

4)     The essential point made was that the period of suspension was inappropriate and excessive. Having regard to the positive features, it was likely that the appellant would, in future, operate in compliance with the operator-licensing regime. New systems had been put in place and the appellant should not, now, be put out of business - which was a real possibility if the 12-week suspension came into effect. A 12-week suspension was equivalent to a revocation and yet the traffic commissioner had decided that a revocation was not necessary.

 

5)     Mr McLaughlin accepted that the operator was not simply in business as a haulier – indeed, some of the evidence to the traffic commissioner had been to the effect that much of the transport work had been “own account”. However, the company was effectively split into two inter-related and inter-dependent parts – a construction side and a transport side. Bringing in sub-contractors to carry out the transport side of the business for a significant period would be very expensive.

 

6)     We were referred to a number of tribunal decisions covering suspensions ranging from 14 days to 21 days, and other outcomes as well, but we have concluded that the present case falls to be considered on its very individual facts and circumstances, and we have gained little help from other cases, based on substantially different facts.

 

7)     Guidance on principle, however, is to be found in 2002/167 A Cooper t/a C-Fare (Oban):

 

“4. Mr Whiteford’s second submission was founded on the appeal 1997 J37 Galloway Refrigerated Transport Ltd in which the Tribunal stated:- “It is apparent that the Traffic Commissioner took, and was entitled to take, a very serious view of the Appellant’ conduct.  Nevertheless, suspension of the licence as ordered would have had the effect that the whole fleet of 25 vehicles and 16 trailers was put off the road for 4 weeks, which we regard as action of the sort that few firms could be expected to survive.  If the Traffic Commissioner intended so to suspend we think that in the particular circumstances it was incumbent upon him to have given warning of this or at least generally to have stated the options that he was considering so as to have enabled the Appellant to make representations about the effect of suspension on their business.  Without such material we consider that the Traffic Commissioner was unable properly to decide on the appropriate length of suspension and whether it should have been total.

 

This appeal was the subject of comment in appeal 1999 L47 Hinchcliffe Bros Skip Hire 1985 Ltd: “In the course of argument Mr Ward expanded these assertions to include an argument, based on the decision of the Tribunal in 1997 J37 Galloway Refrigerated Transport Ltd, to the effect that the Deputy Traffic Commissioner should have investigated the likely financial effect of a suspension before imposing it.  We do not regard the Galloway decision as having laid down a principle of universal application; much depends upon the particular circumstances of each case.

 

5. The Galloway case has also been referred to in (81/2001 K Transport Services (Midlands) Ltd and 144/2002 Abbeycheer Ltd), in which it is suggested that it is “incumbent” upon a Traffic Commissioner to make the appropriate enquiries as to the likely effect of his proposed action on the Appellant’s business.  The Galloway case is stated to be the basis for this assertion but we must emphasise that as is clear from its wording, and as is stated in the Hinchcliffe case, the Galloway case turned on its particular facts.  It did not decide a principle of general application.”

 

8)     In our view the traffic commissioner was faced with a real dilemma. We consider that she was right to take account of the views expressed by Judge Brodrick (with which, as a panel, we entirely agree) in relation to the corrosive effect upon the operator licensing system of other operators seeing a competitor apparently ‘getting away’ with serious and prolonged non-compliance and, consequently, asking: “why should we bother to incur expenditure of time, trouble and money to run a compliant operation?”

 

9)     We have no doubt whatsoever that revocation would have been justified and unimpeachable on appeal. The illegality lasted for 16 years, and was covered up by repeated dishonest and fraudulent concealment. If ever there was conduct that appeared to drive a coach and horses through the operator licensing system, this was it. The extent and duration of the unlawful conduct, coupled with blatant lies told to the traffic commissioner’s staff, strikes at the very heart of the regime. This, therefore, is the starting point. Conduct such as this cannot be tolerated and the purposes and objectives of the licensing system, in our view, would generally require revocation and disqualification.

 

10)  And yet, there were factors - clearly identified in the traffic commissioner’s decision - that caused her to hold back. In short, the traffic commissioner did what this tribunal has urged traffic commissioners to do from the earliest days of its existence – to balance all relevant factors, to exercise discretion in a judicial, proportionate and rational way, and to reach an explained outcome that properly reflects the gravity of the situation, whilst recognising any positive features that are worthy of weight.

 

11) Put at its simplest, Mr McLaughlin’s eloquent argument was simply that, by not revoking, the traffic commissioner had put herself in a position where a 12 week suspension could not be justified because it was tantamount to revocation, and was therefore inconsistent with her apparent intention.

 

12) There are two flaws with this argument. First, it must have been perfectly plain from the outset that this operator was staring revocation in the face. Consequently, if it was proposed to try and persuade the traffic commissioner not only to draw back from revocation, but to limit the length of any suspension, then it was surely apparent that the most compelling financial evidence would be needed to permit any ‘tantamount to revocation’ argument to have even the remotest chance of success. The Appellant was permitted to make representations about the alleged effect of suspension on its business. However, on the financial evidence presented to the traffic commissioner it was, in our view, far from established that the costs of hiring in a small fleet for 12 weeks would, in fact, be ruinous. Words of doom and gloom are easy to utter, and traffic commissioners hear them all the time. It follows that, in a case like this, assuming that the traffic commissioner might have been encouraged to impose a shorter suspension had she been determined to provide a lifeline, the actuarial evidence needed to be far more specific, comprehensive and compelling that it was.

 

13) The second problem for the appellant is that, whilst recognising that the longer the period of suspension, the harder it will be for many companies to continue in business, there is no statutory limit on the period of suspension that a traffic commissioner can impose.

 

14) Moreover, as a matter of law, a suspension is very different from a revocation. It provides a glimmer of hope, and a means to return to operation with a known and established authorisation and operating centre - without the need to make a fresh application. It provides a chance for a new leaf to be turned over if the suspension can be survived. And it is, of course, not possible to disqualify an operator or a director if an operator’s licence is merely suspended.

 

15) For our part, therefore, we see no difficulty in the traffic commissioner concluding, in principle, that the right thing to do is to draw back from the ultimate sanction and, instead, impose a 12 week suspension. In any event, we consider that it would be a very retrograde step to discourage traffic commissioners from taking tough regulatory action (but falling short of revocation) if, after conducting a balancing exercise, it appears right to do so where a very clear marker is needed. We hold this view even if there is a possibility that the consequence will be to put the business in peril. In an appropriate case (which this is) a traffic commissioner is entitled to say: “I hope you survive but if not – so be it. On these particular facts, the public interest in maintaining the integrity of the system demands nothing less than a lengthy suspension”.

 

16) In all the circumstances, we reject the submission that the traffic commissioner’s decision was inconsistent or plainly wrong. On any view, it was merciful. The appeal is dismissed.

 

17) A stay having been granted, we direct that the period of suspension come into effect at 23:59 hours on Saturday 30 November 2013. We have fixed this date in order to give the operator an opportunity to consider what, if any, arrangements to put in place.

 

 

 

Judge Mark Hinchliffe, DCP

23 October 2013