Neutral Citation Number: [2014] UKUT 0449 (AAC)

Appeal No.  T/2014/33

IN THE UPPER TRIBUNAL                    

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

 

ON APPEAL from the DECISION of Kevin Rooney TRAFFIC COMMISSIONER for the North East of England

Dated 22 April 2014

 

 

 

Before:

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

Leslie Milliken,                                  Member of the Upper Tribunal

John Robinson,                                Member of the Upper Tribunal

 

 

Appellant:

BULK WASTE MANAGEMENT Ltd.

 

 

 

                                        

Attendances:

For the Appellant: The Appellant did not appear and was not represented

 

 

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

Date of hearing:               13 August 2014

Date of decision:             8 October 2014

 

 

 

 

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that this appeal be DISMISSED.

 

 

 

 

SUBJECT MATTER:-           Financial Standing    

 

 

CASES REFERRED TO:-    None

 

REASONS FOR DECISION

 

 

1.         This is an appeal from the decision of the Traffic Commissioner for the North East of England to refuse the Appellant’s application for a standard national goods vehicle operator’s licence.

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

(i)               On 6 December 2013 the Appellant applied for a standard national goods vehicle operator’s licence authorising 3 vehicles and no trailers.  The application disclosed links to other holders of operator’s licences.

(ii)              On 20 December 2013 the Office of the Traffic Commissioner, (“OTC”), wrote to the Appellant to acknowledge receipt of the application.  It went on to inform the Appellant that the advertisement submitted was unacceptable, because it was made more than 21 days before the application was received.  The Appellant was advised to ensure publication of a fresh advertisement no later than 10 January 2014.  The letter also informed the Appellant that the financial evidence provided was insufficient and that original bank statements were required, in the name of the Appellant, covering the period from 23 October 2013 until at least 11 November 2013.  The additional information was required by no later than 8 January 2014.

(iii)             On 5 January 2014 Michael Taylor emailed the OTC on behalf of the Appellant to say that a fresh advertisement had been made on 3 January 2014 and that a copy of the newspaper would be forwarded directly to the OTC.

(iv)            On 7 January 2014 the OTC received a letter from the Appellant explaining that some of the original bank statements for the relevant period were with the Appellant’s accountant.  In place of those statements the Appellant submitted a statement printed at the local branch of the bank and stamped and signed by them.

(v)             On 14 January 2014 the OTC again wrote to the Appellant repeating the request for financial information made in the letter of 5 January 2014 and asking for confirmation of the correspondence address for the Appellant.   The letter indicated that it was intended as a final attempt to resolve the issues and that the Appellant should respond in full no later than 28 January 2014.

(vi)            On 14 January 2014 the Appellant provided confirmation that its correspondence address was the address shown in the advertisement.

(vii)           On 6 February 2014 Mr Taylor emailed the OTC on behalf of the Appellant to confirm that a director of the Appellant was sending the financial documentation that day, by Recorded Delivery, addressed for the attention of David Stephenson at the OTC, with the envelope marked ‘Private and Confidential’.

(viii)          On 10 February 2014 David Stephenson confirmed receipt of the bank statements.  He also pointed out that Mr Taylor’s application to become the designated transport manager for the business stated that he would be working 8 hours per week, whereas the minimum requirement for a fleet of 3 vehicles was that he should work for 20 hours per week.  On the same day Mr Taylor replied confirming that he would be working 20 hours per week.

(ix)            On 10 February 2014 David Stephenson sent a ‘New Application Referral’ to Sophie Griffiths and the Traffic Commissioner.  He concluded that in terms of documentation the application was complete.  However he said that there was cause for concern because of the past relationship of two of the directors of the Appellant, Scott Peter Newton and Damien Carr, with the holders of two other operator’s licences.  The first of these was Add Hire Ltd, a company that had gone into liquidation.  The second was Bulk Ltd, which was granted an operator’s licence in May 2012, with an undertaking attached to the licence that the operator would supply the Traffic Commissioner with a copy of the liquidator’s report as soon as it became available but that until the report was completed the Traffic Commissioner would be provided with 6 monthly updates on the progress of the report and copies of an interim reports.  As at 10 February 2014 updates had been received but the report was still unavailable.  Mr Stephenson recommended that the application should be granted subject to an undertaking in identical terms to that attached to the licence granted to Add Hire Ltd.

(x)             Mrs Griffiths took a different view.  She pointed out that there was no intention to surrender the licence held by Bulk Ltd.  As a result she expressed concern as to the financial arrangements of Bulk Ltd on the one hand and the Appellant on the other.  Her recommendation was that before making a decision on the application both Bulk Ltd and the Appellant should both be requested to submit evidence of financial standing covering the same period.  She also pointed out that both companies were at risk of being struck off the register as a result of failing to submit annual returns.  She recommended that both companies should be requested to provide proof that annual returns had been completed.  She also expressed concern about the reference, in a report by the Liquidator of Add Hire Ltd to the director and a shadow director of that company.  The director was identified as Damien Carr, (see paragraph 2(ix) above), but she was unable to identify who the shadow director was.  She suggested that clarification was sought from the Liquidator about this and other matters.

(xi)            The Traffic Commissioner agreed that it was premature to grant the application.  He also agreed with the recommendation that further information should be sought. 

(xii)           On 12 February 2014 the OTC wrote to the Appellant requesting bank statements from the Appellant and Bulk Ltd, each covering the same 28 day period.  The letter also asked for an explanation of the threat the strike the companies off the register.

(xiii)          On 13 February 2014 the Liquidator of Add Hire Ltd wrote to the OTC.  He identified the shadow director and indicated that he was the only person against whom legal proceedings had been initiated arising out of the liquidation.  We have not identified the person concerned because he does not appear to have any connection with the Appellant.

(xiv)          On 24 February 2014 Accountants acting for the Appellant and Bulk Ltd wrote to the OTC saying that the threat to strike off the companies arose through an administrative error in their office and that the Annual Returns had been submitted.  They included confirmation from Companies House.

(xv)           The OTC received bank statements for an account held by Bulk Ltd.  These covered the period 1 September 2013 to 31 January 2014.  However no bank statements were received from the Appellant covering this period or any part of it.

(xvi)          On 10 March 2014 the OTC wrote to the Appellant reminding it of the request for bank statements made in the letter of 12 February 2014.  The letter pointed out that the OTC had only received bank statements from Bulk Ltd.  The Appellant was required to submit bank statements within 14 days.

(xvii)         On 27 March 2014 the OTC received bank statements for an account in the name of Bulk Waste Ltd, (said to be part of ‘Bulk Group’, but not a company holding an operator’s licence), covering the period from 19 January 2014 to 19 February 2014.

(xviii)        On 11 April 2014 the matter came back before the Traffic Commissioner with a recommendation that the application should be refused because it remained incomplete, due to lack of financial information.  The Traffic Commissioner’s decision was: “This application is refused.  I can see no benefit in offering a Public Inquiry.  The applicant has had long enough to supply finances in the applicant company’s name.  There is nothing complicated about that, nor is it subjective such that I might conclude differently after an inquiry”.

(xix)          On 22 April 2014 the OTC wrote to the Appellant, pointing out that further information had been requested in the letters dated 12 February 2014 and 10 March 2014 and that the deadline set in the last of those letters had expired without the information being provided.  The Appellant was advised that the application had been refused on the ground that the Appellant had failed to show that it was of appropriate financial standing.

(xx)           On 25 April 2014 Mr Taylor emailed the OTC in relation to this letter.  He said that he was awaiting proof of posting, from the Accountants, showing that the bank statements requested had been forwarded for the personal attention of David Stephenson at the OTC.  On the same day Mr Stephenson replied asking whether the letter had been sent to him marked ‘Private and Confidential’, pointing out that if it had not bee it would not have been passed to him.

(xxi)          On 2 May 2014 Mr Taylor again emailed Mr Stephenson at the OTC.  He included an email dated 20 March 2014 in which the Accountants were instructed to send all the banks statements for the Appellant for January 2014 to Mr Stephenson, at the OTC, marking the letter ‘Private and Confidential’.  The email went on to indicate that the Accountants had told him that following a conversation Mr Stephenson had accepted that he received a letter sent by the Accountants.

(xxii)         On 6 May 2014 Mr Stephenson emailed Mr Taylor saying that he had spoken to the Accountants and that he had told them that the only bank statements that he had received were for Bulk Waste Ltd, not the Appellant, (see paragraph 2(xvii) above).

(xxiii)        On 7 May 2014 the Appellant filed a Notice of Appeal.  The sole point raised in the grounds of appeal is that the Appellant was never informed that the OTC had been sent bank statements for the wrong company.  A number of documents, mainly emails, were attached to the Notice of Appeal.  Many of the emails have already been summarised.  Others set out exchanges either within the Appellant or the Bulk Group or between someone acting for the Appellant and the Accountants.  Those exchanges mainly deal with the provision of the information requested by the OTC.

(xxiv)       The Tribunal was requested to hear and determine the Appeal in the absence of the Appellant.

3.         In view of the request to hear and determine the appeal in the absence of the Appellant we have considered the contents of the appeal file, firstly in order to assess the ground of appeal and secondly to decide whether there is any other arguable point which could assist the Appellant.

4.         The sole ground of appeal is that the case worker dealing with the application did not inform the Appellant that the material sent by the Accountants in March 2014 did not include bank statements for the Appellant.  The grounds of appeal go on to assert that had this been made clear in a phone call or email the matter could have been resolved within 48 hours.  In addition it is suggested that the lack of any response left the impression that the case worker had received what was required.

5.         The short answer to this point is that the OTC was under no obligation to point out that the Appellant had failed to provide material that had been requested, quite clearly, on more than one occasion.  There are two reasons for coming to this conclusion. 

6.         The first is that on an application for an operator’s licence the onus is on the applicant to satisfy the Traffic Commissioner that the statutory requirements are met. The letters of 12 February 2014 and 10 March 2014 are short and very clear.  The first letter said that the Traffic Commissioner had decided that: “both Bulk Waste Management Ltd and Bulk Ltd are to submit 28 days bank statements covering the same period…”.  The second letter pointed out that although the request related to bank statements from Bulk Waste Management Ltd and Bulk Ltd the OTC had only received bank statements for Bulk Ltd: “so Bulk Waste Management is required to submit bank statements for month of January 2014”.  In answer to this requirement the OTC received bank statements for Bulk Waste Ltd, a separate company, which did not even hold an operator’s licence.  In our view there is no room for any misunderstanding about what the OTC required the Appellant to produce and there is no doubt that they failed to provide bank statements for the Appellant covering the relevant period.  We can see no justification for imposing an obligation on the OTC to go any further than they did in seeking information that the Appellant was duty bound to provide, as the applicant for an operator’s licence.

7.         The second reason is that the Tribunal has repeatedly stated that the system of operator’s licencing in based on trust.  One aspect of that is that operators are trusted to operate in compliance with the operator licensing regime, without having to be supervised or told what to do by Traffic Commissioners, the DVSA, the Police or any other authority.  Another aspect is that operators must be able to understand what is required of them and must reply promptly and fully to requests made by Traffic Commissioners or any other body entitled to require information from them.  Failure to understand what the Appellant was required to produce in response to the letters of 12 February and 10 March 2014 and failure to comply with the requirements of those letters did not augur well for compliant operation in the future.  In our view the OTC was right to send a second letter after the Appellant’s failure to respond in full to the letter of 12 February 2014.  Refusing the application at that stage would have been premature.  On the other hand the OTC was under no obligation to persist in requesting information after the Appellant had had a reasonable opportunity to provide it.  Insisting on such an obligation would not only impose an additional short term burden on the OTC but it would also impose a long-term burden as a result of licences being granted to operators who then failed to respond in the future and failed to operate compliantly, either through ignorance or through general administrative inefficiency.  It is for the Traffic Commissioner to decide, on the facts of the case before him, whether it is reasonable to allow an applicant or an operator another chance to respond.  We are satisfied that it is in the public interest to allow Traffic Commissioner’s to ‘call time’ on a request for information after appropriate opportunities have been given because the failure to respond may be an indication either that the person concerned fails to satisfy the statutory requirements to be granted a licence or they should no longer continue to hold a licence.  In the present case we are satisfied that the letters of 12 February and 10 March 2014 contained a clear and unambiguous requirement that the Appellant failed to meet.  Requiring the OTC to go any further, on the facts of this case, would be to require it to provide a degree of supervision, which is to be avoided for the reasons we have given.

8.         We have referred to the fact, (see paragraph 2(xviii) that the Traffic Commissioner explained why he did not consider a Public Inquiry to be necessary in this case.  In our view he was right to consider that question and to set out reasons for rejecting a Public Inquiry.  We say that because under s. 35(1) of the Goods Vehicles (Licensing of Operators) Act 1995, ["the 1995 Act"] Traffic Commissioners are given a general discretion to hold “such inquiries” as they think necessary for the proper exercise of their functions under the Act.  This is, of course, in addition to the requirement to hold a Public Inquiry in the circumstances set out in s.29(1) before taking action against an existing licence or licence holder. 

9.         It is important to note that the position in relation to Goods Vehicles is in marked contrast to that in relation to Public Service Vehicles.  In the case of PSV’s paragraph 6 of the Public Service Vehicles (Operators’ Licences) Regulations 1995 provides that a Traffic Commissioner: “shall not refuse an application for a licence, or grant it other than as requested without giving to the applicant an opportunity to state his case at an inquiry save where the application or the applicant’s conduct in relation to it is frivolous or unreasonable”.  In addition s.17(4) of the Public Passenger Vehicles Act 1981 prevents a Traffic Commissioner from taking action under that section without first holding an inquiry, if requested to do so by the holder of the licence.

10.      Was the Traffic Commissioner justified in refusing to hold a Public Inquiry in the present case?  In our view he gave good reasons for rejecting that course.  His refusal to hold a Public Inquiry does not give rise to any arguable ground of appeal.  We cannot see any other arguable ground of appeal in this case.

11.      For these reasons the appeal is dismissed.

12.      Finally we believe it is appropriate to add that, in our view, the OTC obviously considered this case with great care.  The material put before the Traffic Commissioner was fully and clearly set out and the relevant considerations were carefully identified.  The advantage of more than one member of staff considering a case is demonstrated by what happened in this case.  While we can understand the initial recommendation that the application could be granted subject, to an undertaking, it identified a possible cause for concern.  Whether it was instinct or greater experience or a combination of the two it seems to us that Mrs Griffiths made some important recommendations and that it was vital to seek clarification of the points that she raised before any final decision was taken.  In our view the public in general and the Traffic Commissioner in particular were well-served by the way in which this application was handled.

 

 

 

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

Principal Judge for Traffic Commissioner Appeals, President of the Transport Tribunal.

8 October 2014