Neutral Citation Number: [2014] UKUT 191 (AAC) Appeal No: T/2014/04

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

(TRAFFIC COMMISSIONER APPEALS)

ON APPEAL FROM THE DECISIONS OF FIONA A HARRINGTON,

DEPUTY TRAFFIC COMMISSIONER for the WEST OF ENGLAND TRAFFIC AREA,

DATED 1 NOVEMBER 2013 (Mr Benney) & 15 DECEMBER 2013 (Ignition Credit Ltd).

Before:

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

Mr G Inch, Member of the Upper Tribunal.

Mr M Farmer, Member of the Upper Tribunal.

First Appellant:

IGNITION CREDIT LTD

Second Appellant:

THOMAS RICHARD BENNEY

Respondent:

DRIVER AND VEHICLE STANDARDS AGENCY (DVSA)

Attendance:

For the Appellant: No attendance by or on behalf of either appellant.

For the Respondent: Ms F Hine, Solicitor.

Appeal heard at: Field House, Breams Buildings, London

Date of hearing: 16 April 2014

Date of decision: 28 April 2014

DECISIONS OF THE UPPER TRIBUNAL:

IT IS HEREBY ORDERED that the appeal of the First Appellant be allowed

and the appeal of the Second Appellant be dismissed. We extend time under Regulation 23 of the Goods Vehicles (Enforcement Powers) Regulations 2001, as amended, for the First Appellant to make a fresh application under Regulation 10. The application of the First Appellant is remitted back to the Deputy Traffic Commissioner for determination by her, on its substantive merits.

Subject matter:

Impounding. Applicant must prove that he was at the time of its detention the lawful owner.

Late application by owner for return – extension of time limit under Regulation 23. Necessity for extension of time limit in order for the case to be dealt with fairly and justly.

Cases referred to:

N P Clare Transport Ltd v VOSA [2013] UKUT 589 (AAC)

Smith & Graham v VOSA [2012] UKUT 462 (AAC)

REASONS FOR DECISION:

1)    This was an appeal from the decisions of the Deputy Traffic Commissioner for the West of England Traffic Area. On 1 November 2013 she refused to order the return of vehicle registered number YN06ODG to Mr Benney and, on 15 December 2013, refused to exercise her discretion to accept a new out-of-time application from Ignition Credit Ltd, under the provisions of the Goods Vehicles (Enforcement Powers) Regulations 2001, as amended by the Goods Vehicles (Enforcement Powers) (Amendment) Regulations 2009.

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

(i)    On 18 July 2013, vehicle registration number YN06ODG, a Volvo 3 axle tractor unit that was towing a semi-trailer laden with potatoes, was impounded. Officers believed that the vehicle was being operated in breach of S.2 of the Goods Vehicles (Licensing of Operators) Act 1995.

(ii)   The First Appellant is a finance company. Documentation exhibited in the file indicates that the tractor unit was sold on 17 February 2011 to Ignition Credit Ltd and they, in turn, entered into a conditional sale agreement with the Second Appellant.

(iii)  The total price of the vehicle was £33,600 and the Second Appellant needed £12,000 of credit - which the First Appellant provided. The Second Appellant contracted to pay back 36 monthly payments of £410.13 starting on 2 April 2011. The contract between the First and Second Appellant states that the goods will not become the property of the Second Appellant until he has made all of the contracted payments. Until then, ownership remained with the First Appellant, and the Second Appellant had no right to sell the vehicle. It is undisputed that, at the time of the impounding, the Second Appellant had not made all the contracted payments.

(iv) By an in-time application dated 23 July 2013, the First Appellant applied to the Traffic Commissioner for return of the impounded vehicle on the grounds that, as far as they were concerned, the vehicle was operating legally. If it was being operated illegally then the First Appellant stated that it was not aware of that fact.

(v)  Subsequently, it appears that the Second Appellant ‘paid off’ the outstanding credit. As a result, on 21 August 2013, the First Appellant sent an email to the Traffic Commissioner’s office stating that: “We can confirm that we no longer hold any financial interest in this vehicle and therefore we no longer require this vehicle to be returned to us as our interest has been removed.”

(vi) Meanwhile, on 9 August 2013 the Second Appellant applied to the Traffic Commissioner for return of the vehicle. His application was considered at a hearing before the Deputy Traffic Commissioner held on 18 October 2013.

(vii)In a written decision dated 1 November 2013 the Deputy Traffic Commissioner found that, in order to make a valid application for the return of the vehicle, ownership of the vehicle must be established as “at the time of its detention”. Given the nature of the conditional sale agreement and that fact that, at the time of its detention, the vehicle had not been fully paid for by the Second Appellant, the Deputy Traffic Commissioner found that, at the relevant time, the First Appellant remained the legal owner of the vehicle.

(viii)       However, the Deputy Traffic Commissioner went on to find, “for the purposes of the application under consideration, that the (Second) Applicant had on this occasion discharged the burden of proof on him by demonstrating through sufficient credible evidence that, on balance of probability, N P Clare Transport Limited was the ‘user’ of the impounded vehicle on 18 July 2013 and that Section 2 of the Act was not contravened by the particular use on that day.”

(ix) The Second Appellant was (and is) represented by Mr Over, solicitor. By letter dated 6 December 2013 he advised the Traffic Commissioner’s office that he had sought and received instructions from the First Appellant (as the established lawful owner at the relevant time) to re-apply for the return of the vehicle and to apply for an extension of time for the making of the new application.

(x)  The Deputy Traffic Commissioner accepted that she had discretion to accept a late application, taking as authority for this proposition the tribunal decision of Excel A-Rate Business Services Limited (2005/471).

(xi) The Deputy Traffic Commissioner decided to consider the request that she extend the time for submitting the First Appellant’s application by consideration of the papers, without holding a hearing. She decided not to extend time because the First Appellant had been given notice of the impounding in July 2013, had made an application which it then withdrew and, had the First Appellant not withdrawn its application, it was “not axiomatic” (her emphasis) that it would have succeeded.

3)    At the hearing of this appeal, the Appellants did not appear, but written submissions were made by Mr Over. The Respondent was represented by Ms Hine who also submitted a skeleton argument. We were grateful for the submissions and skeleton.

4)    The written submissions on behalf of the First Appellant contend that the Deputy Traffic Commissioner was plainly wrong not to exercise her discretion to allow a late application for the return of the vehicle. The grounds of appeal, in essence, reiterate the facts as set out above and conclude that it is both fair and just that the vehicle should be returned, especially given that the regulations are “extremely complicated”. The written submission adds that: “If the Ignition Credit appeal were to be allowed, the tribunal need not consider further the appeal of Mr Benney”.

5)    The Goods Vehicles (Enforcement Powers) Regulations 2001 were amended with effect from 1 October 2009 by the Goods Vehicles (Enforcement Powers) (Amendment) Regulations 2009. Regulation 10 of the Regulations provides that the owner of a detained vehicle may apply to the Traffic Commissioner for its return within 21 days beginning with the date on which notice is given under Regulation 9. However, by virtue of Regulation 23 (which was inserted by the 2009 Regulations), a Traffic Commissioner may extend this time limit where the Traffic Commissioner “considers it to be necessary in order for a particular case to be dealt with fairly and justly”.

6)    In deciding whether it is necessary in order for a particular case to be dealt with fairly and justly we find helpful guidance in a previous case involving some of those involved in the present case, namely N P Clare Transport Ltd v VOSA [2013] UKUT 589 (AAC). Attention should obviously be given to the adequacy of the explanation for the delay, but must be especially focussed upon the prospects of success if there were to be a full hearing.

7)    The explanation for the delay is clear. The First Appellant, although the owner at the time the vehicle was detained, transferred ownership to the Second Appellant when the Second Appellant paid off the conditional sale agreement. In effect, the Second Appellant bought an impounded vehicle. Both appellants, presumably on the basis of erroneous legal understanding, assumed that the First Appellant could no longer claim the return of the vehicle and that it was more appropriate for the Second Appellant to seek the return of the vehicle, since he had subsequently acquired lawful ownership. However, the definition of “owner” in Regulation 2 makes it clear that “owner” means the person who can show that he was “at the time of its detention” the lawful owner of the vehicle.

8)    If ownership passes to someone else after the impounding takes place, the new owner has no locus standi to make an application to the Traffic Commissioner. Consequently, a wise new owner will insist that the previous owner continue to prosecute their application before the Traffic Commissioner - on the understanding that, if successful, possession of the returned vehicle will be given by the previous owner to the new owner.

9)    As for the prospects of success, we think that the Deputy Traffic Commissioner’s findings of fact made after a full hearing will be hard to gainsay now. She found that the lawful owner of the vehicle was the First Appellant (and we agree that this was the only reasonable finding to make). She also found, “for the purposes of the application under consideration, that the (Second) Applicant had on this occasion discharged the burden of proof on him by demonstrating through sufficient credible evidence that, on balance of probability, N P Clare Transport Limited was the ‘user’ of the impounded vehicle on 18 July 2013 and that Section 2 of the Act was not contravened by the particular use on that day.”

10) Although we have noted the caveat that this finding is “for the purposes of the application under consideration”, and although some readers of her decision may feel a degree of surprise at this finding, we have not been able to envisage circumstances whereby it would be fair and just for the Deputy Traffic Commissioner to reach a different conclusion second time around, had she agreed to extend time for the First Appellant to re-apply. Not unreasonably, the First Appellant’s wish to make a fresh application flowed from, and was a direct consequence of, the Deputy Traffic Commissioner’s clear and public findings.

11) There is, further, no indication in the Deputy Traffic Commissioner’s written decision that she had proper regard to the provisions of Regulation 23 when she considered whether or not to extend time. She referred instead to an analysis of whether the wording in Regulations was ‘mandatory’ and ‘directory’. However, as we noted in Smith & Graham v VOSA [2012] UKUT 462 (AAC), the ‘mandatory’ and ‘directory’ distinction may well have outlived its usefulness - especially after the 2009 amendments to the Regulations and the provision of a specific power to extend time under Regulation 23.

12) Since the Deputy Traffic Commissioner has now decided that the vehicle was being operated lawfully and that therefore (albeit with hindsight and after a full hearing) the vehicle should not have been impounded, we think she fell into error in refusing to take the only obvious step that might have allowed the matter to be disposed of fairly and justly.

13) In all the circumstances therefore, the appeal of the First Appellant is allowed.

14) We extend time under Regulation 23 for the First Appellant to make a fresh application under Regulation 10 and, unless the DVSA has already returned the vehicle to the First Appellant under Regulation 4 (as an authorised officer is empowered to do, especially if this will prevent unnecessary storage charges from further accumulating), the application of the First Appellant is remitted back to the Deputy Traffic Commissioner for determination by her on its substantive merits – possibly on the papers.

15) So far as the Second Appellant’s appeal is concerned, it is said (in the light of the above result) that we do not need to consider it further. For completeness, however, we think it appropriate to state that his appeal falls to be dismissed because of the ownership issue. Whatever financial or other interest he had in the vehicle at the time of its detention, the Second Appellant was not its lawful owner. For a full analysis of the position on similar facts, see N P Clare Transport Ltd v VOSA [2013] UKUT 589 (AAC).

16) The appeal of the Second Appellant is therefore dismissed.

Judge Mark Hinchliffe, DCP

28 April 2014