Neutral Citation Number:[2014] UKUT 0450 (AAC)

Appeal No.  T/2014/51

IN THE UPPER TRIBUNAL                    

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

 

ON APPEAL from the DECISION of Sarah Bell TRAFFIC COMMISSIONER for the West of England

Dated 5 June 2014

 

 

 

Before:

His Hon. Michael Brodrick,    Judge of the Upper Tribunal

Leslie Milliken,                         Member of the Upper Tribunal

David Rawsthorn,                    Member of the Upper Tribunal

 

 

Appellant:

MICHAEL THOMAS AYLESBURY, t/a MT AYLESBURY

 

 

 

                                        

Attendances:

For the Appellant: The Appellant appeared in person

 

 

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

Date of hearing:               26 September 2014

Date of decision:             9 October 2014

 

 

 

 

DECISION OF THE UPPER TRIBUNAL

 

 

IT IS HEREBY ORDERED that this appeal be ALLOWED.

 

 

 

 

 

 

 

 

SUBJECT MATTER:-           Termination for Non Payment          

 

 

CASES REFERRED TO:-   Bradley Fold Travel Ltd & Peter Wright –v- Secretary of State for Transport [2010] EWCA Civ 695

T/2010/016 & 021 Alan Cooper Haulage & Woodhouse Furniture

T/2013/58 & 75 Patrick Ward t/a Allshires Landscapes & Overbrook Recovery Services Ltd

 

 

 

REASONS FOR DECISION

 

 

1.         This is an appeal from the decision of the Traffic Commissioner for the West of England to refuse to disregard the automatic termination of the Appellant’s licence following his failure to pay the continuation fee on time.

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

(i)               The Appellant is the holder of a restricted goods vehicle operator’s licence authorising one vehicle.  The correspondence address and the address of the operating centre were both recorded as: Cross Keys Farm, The Bungalow, Lyes Green, Corsely, Warminster, BA12 7PB, (“The Bungalow”).

(ii)              On 27 February 2014 the Office of the Traffic Commissioner, (“OTC”), wrote to the Appellant at The Bungalow, to inform him that payment of the fee to keep his operator’s licence in force was due no later than 31 March 2014.  The letter explained that failure to pay on time would result in the termination of the licence.  Enclosed with the letter was a ‘Licence Checklist’ and declaration.

(iii)             On 2 April 2014 the OTC received a number of documents from the Appellant.  They included: the Licence Checklist, dated 26 March 2014, a cheque for the continuation fee also dated 26 March 2014, (drawn on an account in the name of Cross Keys Farm Ltd), the letter of 27 February 2014 and the Licence Checklist, each had a manuscript alteration to the address, from The Bungalow to Bollow Farm, Silver Lane, East Woodlands, Frome, Somerset, BA11 5LZ, (“Bollow Farm”).

(iv)            On 3 April 2014 a member of staff at the OTC telephoned the Appellant (a) to ask for an explanation for late payment and (b) to establish who operated the authorised vehicle.  The request for an explanation on these two points was confirmed in an email sent at 16.51 on the same day.

(v)             At 19.26 on 3 April 2014 the Appellant replied by email.  He said that the licence fee and the application form were posted, First Class post, on 26 March 2014 so that: “it should have been with you in plenty of time”.   The Appellant went on to explain that the letter of 27 February 2014 had not been received until 22 March 2014 because it had been sent to his old postal address and had not been passed on to him.  The Appellant attached to his email a copy of a letter, dated 22 May 2012, addressed to: ‘Western Traffic Area, Hillcrest House, 386 Harehills Lane, Leeds, LS9 6NF’, in which he said that following a recent move from The Bungalow “could you please amend our details as follows: our new address is”, and the full address and telephone number of Bollow Farm was set out.  The Appellant then went on to explain that Cross Keys Farm Ltd was a company solely set up to secure the tenancy of Bollow Farm and that it received the income from the milk produced by the Farm, hence the cheque drawn on Cross Keys Farm Ltd.  He added that Cross Keys Farm Ltd did not own the authorised vehicle or the livestock.  He said in hindsight that he should have sent the letter on 26 March by Recorded Delivery.

(vi)            On 4 April 2014 a submission was sent to the Traffic Commissioner and another member of the OTC staff.  This set out the matters summarised above.  In relation to the letter dated 22 May 2012 giving notice of a change of address it was said that there was nothing scanned to his licence indicating that action had been taken to change his address.  The submission included this comment: “Whilst I do not doubt Mr Aylesbury sent the letter informing of the change of address in May 2012, it is likely this went astray in the post as no record of receipt exists in this office”.  It also made the point that there was no record of any contact between the Central Licensing Office, (“OTC”), and the Appellant between March 2010 and 27 February 2014.  The recommendation was that the Appellant should be requested to provide the cheque stubs for the payment of the continuation fee and the one before and after this cheque in order to determine whether the payment was indeed sent on 26 March 2014.  If that proved to be the case the final recommendation was that the Traffic Commissioner should find that there were exceptional circumstances in this case, with the result that the automatic termination of the licence should be disregarded.

(vii)           Before the submission reached the Traffic Commissioner it was reviewed by another member of staff.  She pointed out that originally the operating centre and the correspondence address were the same and she raised the questions of whether the letter of 22 March 2012 was also intended to change the address of the operating centre and where the authorised vehicle was being parked.  Her recommendation to the Traffic Commissioner was that the Appellant should be given 7 days in which to provide: (i) the cheque stubs, as outlined above, (ii) clarification of the address at which the vehicle was parked, (iii) confirmation that the user of the vehicle was the Appellant not the limited company, (iv) bank statements for January-March 2014 for the Appellant’s business as a sole trader and (v) details as to why the payment was made by the limited company and not the Appellant as a sole trader.  The Deputy Traffic Commissioner agreed with the latter recommendation and added that the Appellant should be asked to provide the type of vehicle operated under the licence and the business purpose for which it was used.

(viii)          On 7 April 2014 the OTC wrote to the Appellant requiring him to provide the information set out above.  He was invited to reply by 21 April 2014.  The letter was addressed and sent to The Bungalow.  It was not received by the Appellant.

(ix)            A further copy of the letter of 7 April 2014 was sent to the Appellant at Bollow Farm.  It was in identical terms to the original letter save that the deadline for replying was extended to 23 May 2014.

(x)             On 21 May 2014 the Appellant replied.  He enclosed copies of the cheque stubs.  He explained that the vehicle was parked at Cross Keys Farm and also at Bollow Farm, adding that both premises were owned by MT Aylesbury and that both came under the same DEFRA Holding Number.  He said that MT Aylesbury and Cross Keys Farm ran in conjunction with one another.  He provided contact details for his accountant saying that he was the best person to explain this.  He enclosed bank statements for the period requested.  He said that the cheque was drawn on the Limited company in error because the wrong cheque-book was taken from a drawer.  He described the vehicle and said that it was solely used to move livestock to and from the farms to markets or an abattoir.  He provided evidence that the Appellant was the sole owner of the livestock.  He offered to provide further information if required.

(xi)            The serial number of the three cheque stubs were in the correct numerical sequence.  However the first of the stubs, for a cheque in favour of ‘H. Aylesbury’, was dated 28 March 2014.  A note against this stub states: “Wages done on a Wednesday for issue on a Friday. (My day off)”.  The calendar for 2014 shows that 26 March was a Wednesday and 28 March a Friday.  The third cheque in the series is dated 16 April 2014, (also a Wednesday).

(xii)           On 22 May 2014 a lengthy addition was made to the submission to the Traffic Commissioner.  Detailed consideration was given to the financial position.  Concern was expressed as to whether the Appellant was operating only as a sole trader.  It was said that there was a clear case of the Appellant unlawfully parking at Bollow Farm and therefore evidence of unauthorised use of an operating centre, breach of conditions and/or undertakings attached to the licence and a material change in circumstances.  Specific reference was made to various subsections of s. 26(1) of the Goods Vehicles (Licensing of Operators) Act 1995, ["the 1995 Act"].

(xiii)          On 3 June 2014 the position was summarised before the submission was sent to the Traffic Commissioner.  It was said that: “The further information received as outlined above does not alleviate the concern regarding the entity operating the vehicles to allow late payment to be accepted or to satisfy that exceptional circumstances have been apparent”.  This was followed by a recommendation that late payment should be refused: “as there are no apparent exceptional circumstances to consider”. 

(xiv)          On 4 June 2014 the matter came before the Traffic Commissioner who said: “I agree that the circumstances provided do not satisfy me that there are exceptional circumstances and the late payment application is refused”.

(xv)           On 30 June 2014 the Appellant filed a Notice of Appeal.  In his grounds of appeal the Appellant gave the following reasons for late payment: (i) the renewal letter was sent to the wrong address notwithstanding his notification of a change of address in May 2012, (ii) he only received the renewal letter on 22 March 2014, (iii) he sent a cheque for the continuation fee, together with the completed forms, by First Class post, on 26 March and (iv) through no fault of his the letter was delivered on 2 April 2014, several days later than he was entitled to expect having used First Class post.  He added that he had answered all the questions raised and provided all the documents requested by the OTC before the decision was taken and that the operator’s licence is a key part of his business.                                                                                                                                                                                                                                                                       

3.         At the hearing of the appeal the Appellant appeared in person.  He told us that having moved to Bollow Farm his wife wrote to all the people they dealt with to notify them of the change of address and to provide their new address.  In other words the letter referred to in paragraph 2(v) above was one of a large number sent at about the same time.  The Appellant provided us with the original of a letter dated 14 May 2012 from the Rural Payments Agency, addressed to him at Bollow Farm and thanking him for telling them about changes to his registration details.  In our view this simply confirms the correctness of the decision not to doubt the Appellant’s assertion that steps had been taken to notify the change of address to the OTC, (see paragraph 2(vi) above.  The Appellant went on to explain that three separate addresses come under the general heading of ‘Cross Keys Farm’ namely: the Farm itself, the Pub and the Bungalow.  Until the move to Bollow Farm the Bungalow was his home address.  After the move he said that it was let and that the tenants were not good at passing on any post that still came to him at the Bungalow.  In relation to the dates on the cheques and the note written at the side of the first cheque stub the Appellant said that his wife works for four days each week and takes Wednesdays off.  On Wednesdays she works in his office doing the wages and making payments.  He said that because the wages are due on Friday his wife’s practice was to post-date the wages cheques she wrote on a Wednesday to prevent them being cashed early, hence the fact that the first cheque in sequence, although written on Wednesday 26 March was post-dated to Friday 28 March, while the cheque for the continuation fee was dated 26 March, the day on which it was written.

4.         This case raised a simple and straightforward issue namely: “was the late payment of the continuation fee the result of exceptional circumstances that justified the Traffic Commissioner in disregarding the automatic termination of the licence?”  As sometimes happens the initial explanation given by the Appellant raised further questions.  These divided into two different categories.  First, it prompted questions intended to test the explanation given, for example the sensible request for the cheque stubs on either side of the payment of the continuation fee.  Second, it gave rise to questions relating to the entity that was operating the authorised vehicles and, later, questions relating to the possible use of an unauthorised operating centre.

5.         We are satisfied that the Traffic Commissioner was entitled, on the facts of this case, to ask questions in both the categories identified above.  But we are equally satisfied that having decided to take that course it was essential to keep the two categories quite separate.  There are two main reasons why this was important in the present case and why this approach is likely to be applicable in other cases. 

6.         First, when assessing whether or not there are exceptional circumstances, which justify disregarding automatic termination, it will be helpful to ask: “Why was payment made late?”  In the present case the answer is set out in the Notice of Appeal and summarised at paragraph 2(xv) above.  If one then asks whether late payment arose from a possible, but unproved, change in the entity operating the authorised vehicle, or from a possible, but unproved, use of an unauthorised operating centre, the answer, in our view, is quite clearly: “No it did not”.  Similarly if one asks whether either or both of those possibilities could mean that something which would otherwise have been an exceptional circumstance justifying the disregarding of automatic termination somehow ceased to be exceptional or ceased to justify disregarding automatic termination the answer, in our view, is again quite clear, namely that it could not. In other words it is essential the keep the two categories separate in order to avoid taking irrelevant considerations into account. 

7.         Second, the possibility that there had been a change in entity or the use of an unauthorised operating centre gave rise to an entirely different question, namely: “Is this an appropriate case for taking action under s. 26(1) of the 1995 Act?”  If the answer had been that it was appropriate to take regulatory action the position is quite clear; a Traffic Commissioner cannot take such action: “without first holding an inquiry if the holder of the licence …. requests him to do so”, see s. 29(1) of the 1995 Act.  No Public Inquiry was held in this case, nor was any call-up letter sent to initiate such a Public Inquiry.  Instead it seems to us that the recommendation, adopted by the Traffic Commissioner, that a failure to alleviate concern about the entity operating the vehicle: “did not allow late payment to be accepted” or allow the Appellant: “to satisfy that exceptional circumstances have been apparent”, was tantamount to revoking the licence for a breach of s. 26(1) rather than justifying a refusal to find exceptional circumstances, which justified disregarding automatic termination.

8.         The possibility that there had been breaches of s. 26(1) of the 1995 Act was expressly raised towards the end of the first Addendum to the submission put before the Traffic Commissioner.  Unfortunately it appears that, thereafter, nobody appreciated the significance of this sensible comment.  Instead what followed created confusion rather than clarity.  With the exception of the comment at an early stage that: “Whilst I do not doubt Mr Aylesbury sent the letter informing of the change of address in May 2012, it is likely that this went astray in the post as no record of receipt exists in this office”, no-one attempted to analyse the explanation given by the Appellant, with a view to seeing whether it amounted to exceptional circumstances or whether, if it did, they justified the Traffic Commissioner in disregarding automatic termination.

9.         In our view the failure, in this case, to keep the issues of exceptional circumstances and action under s. 26(1) of the 1995 Act separate confused and overcomplicated the position and led to a decision which was seriously flawed and cannot stand.  It meant that an irrelevant consideration, namely the continuing concern as to who was operating the authorised vehicle, became the main reason for refusing to disregard late payment.  

10.      Paragraph 17(2) of Schedule 4 to the Transport Act 1985, as amended, gives the Tribunal power either to “make such order as it thinks fit” or to remit the matter to the Traffic Commissioner for re-hearing and determination “in any case where the tribunal considers it appropriate to do so”.  In our view it is not appropriate to remit this appeal for a re-hearing because the facts are all set out in the appeal file.   In our view the appropriate course is for us to re-assess the available material in order to make our own decision.

11.      The Tribunal has made it clear on many occasions that there is no provision in the 1995 Act or in the Regulations made under that Act for a reminder to be sent alerting operators to the need to pay the continuation fee.  Letters, such as the one dated 27 February 2014 addressed to the Appellant, are sent as a matter of courtesy and because of the other documents enclosed.  However having considered the full terms of an operator’s licence issued under the 1995 Act the Tribunal concluded in appeal T/2013/58 & 75 Patrick Ward t/a Allshires Landscapes & Overbrook Recovery Services Ltd that the terms of the licence created a reasonable expectation that an operator would be sent a renewal letter.  While the primary responsibility for renewing on time rests with the operator failure to comply with that responsibility by paying on time is not the only factor to be considered for the reasons given in the next paragraph.

12.      Every operator who seeks to avoid the consequences of late payment of a continuation fee must rely on s. 45(5) of the 1995 Act, which provides that: “The Traffic Commissioner may, if he considers there to be exceptional circumstances that justify his doing so in any case where subsections (3) or (4) has applied, direct that as from the time mentioned in that subsection its effect is to be disregarded”.  We have underlined ‘may’ in order to stress that this gives Traffic Commissioners discretion to disregard automatic termination in cases where exceptional circumstances justify that course.  This was stressed at paragraph 9 of T/2010/016 & 021 Alan Cooper Haulage & Woodhouse Furniture.  We have also underlined ‘any’ because, as the Tribunal also pointed out in paragraph 9 of that decision, even if an operator has failed to meet the primary responsibility to pay the continuation fee on time automatic termination can be disregarded if there are exceptional circumstances which justify that course.

13.      It goes without saying that any discretion has to be exercised judicially.  That means, amongst other things taking into account and assessing all the relevant considerations and ignoring irrelevant considerations.  Above all it means approaching the task with a combination of fairness and common-sense.  In addition it seems to us that a rather more structured approach in this case would have been more likely to achieve the right result and may assist in other cases.

14.      The first question is obvious namely: “What is the explanation for late payment?”  But it is important to pose it for two reasons.  The first is that the answer will help to define what is and is not relevant.  The second is that it leads into a second question namely: “Are there good reasons for rejecting that explanation?”

15.      In the present case the explanation was: (i) the renewal letter was sent to the wrong address notwithstanding the Appellant’s notification of a change of address in May 2012, (ii) the Appellant only received the renewal letter on 22 March 2014, (iii) the appellant sent a cheque for the continuation fee, together with the completed forms, by First Class post, on 26 March and (iv) through no fault of his the letter was delivered on 2 April 2014, several days later than he was entitled to expect having used First Class post.  

16.      In our view it was clearly right to accept that the letter of 22 May 2012 was sent and the correctness of that decision has been confirmed by the original letter, shown to us at the hearing, from another organisation, acknowledging a change of address at about the same time.  Asking for copies of the cheque stubs either side of the continuation fee payment was a sensible way in which to test that part of the explanation.  The result might have undermined the explanation but, in the event it confirmed it.  In our view it would have been helpful to all concerned if there had been an express acknowledgment that nothing had emerged which undermined the explanation for late payment, even if there were remaining concerns about other aspects of the case.

17.      The third question is this: “Are the circumstances which explain the late payment exceptional?”  In paragraph 10 of the Cooper and Wootten decision, (above), the Tribunal pointed out that the main dictionary definition of ‘exceptional’ is ‘unusual’.  It follows that whether or not the circumstances in an individual case are exceptional is a question of judgment, fairness and common-sense, which will depend on the facts of that particular case.  Reference to other decisions is unlikely to be helpful save where they lay down the general principles, which should guide the process of reaching a decision.

18.      The probability is that the Appellant notified his change of address to the OTC in May 2012.  There is no record of that letter being received and the address was not changed.  The submission to the Traffic Commissioner referred to one possibility, namely that the letter was lost in the post.  While letters do go astray from time to time it seems to us that this is something that properly merits the description ‘unusual’.  In other words it is capable of amounting to an exceptional circumstance for the purposes of s. 45(5) of the 1995 Act.  There is a second possible explanation, namely that the letter did arrive but that no change was made.  We consider that possibility for two reasons.  First, in the present case the letter of 7 April 2014, (see paragraph 2(viii) above), was sent to The Bungalow even though the OTC were well aware by then that the Appellant was saying that his address was now Bollow Farm.  Second in the first of the Cooper and Wootten appeals, (above) the Central Licensing Unit, (“CLU”), failed to act on a change of address.  While it is clear that there has been at least one occasion on which no action has been taken following notification of a change of address it seems to us that this too properly merits the description ‘unusual’, so that it too is capable of amounting to an exceptional circumstance.

19.      The Appellant says that he received the letter of 27 February 2014 on 22 March 2014.  It is important to remember that in addition to the request for payment of the continuation fee this letter contains a ‘Licence Checklist’, which the Appellant was invited to check.  If there were any changes he was invited to indicate them.  He or his wife did so by making manuscript alterations to addresses.  In addition there was a request for financial information, which he was invited to complete.  The Appellant says that all these documents, together with a cheque for the continuation fee, were posted, using First Class post, on 26 March 2014.  Allowing for a delivery on Saturday this meant that there were four days on which a delivery could have been made before the deadline expired.  In fact the letter was not stamped as received by the CLU until 2 April 2014, in other words 6 ‘delivery days’ after it was posted.  While it is not unknown for letters posted First Class not to arrive on the following day this too properly merits the description unusual.  In our view the fact that this letter was not delivered by 31 March 2014, at the latest, also amounts to an exceptional circumstance.

20.      The fourth question is: “Do the exceptional circumstances justify disregarding the automatic termination of the licence?”  In our view once the exceptional circumstances have been identified it will usually be important to consider them together when answering this question.  That can be illustrated in the present case where the Appellant is saying that the late payment arose from a combination of late receipt of the renewal letter coupled with a delay in the delivery of the cheque.  Until he received the letter of 27 February 2014 the Appellant had no reason to think that his address had not been changed.  When the cheque for the continuation fee was posted First Class the Appellant was entitled to expect that it would be delivered before 31 March 2014.  We are quite satisfied that there were exceptional circumstances in the present case and that they justified disregarding the automatic termination of the licence.  In our view this is a case where the process of reasoning, and the application of the relevant law, required the TC to adopt that view.  In other words it meets the test for allowing an appeal as laid down by the Court of Appeal in Bradley Fold Travel Ltd & Peter Wright –v- Secretary of State for Transport [2010] EWCA Civ 695.

21.      The Appeal is allowed and the automatic termination of the Appellant’s licence is to be disregarded.

22.      The cheque for the continuation fee was banked.  After what he described as a considerable struggle the Appellant eventually received a refund on 8 August 2014.  We are conscious of the fact that we have only heard one side of the story but it was quite apparent that the Appellant was unhappy about the way in which this matter was handled and that his confidence in the system has been shaken.  That is something that should be avoided.  The Tribunal has repeatedly said that the operator licensing system depends on trust but in this context trust is a two way street.  Traffic Commissioners must be able to trust operators but equally operators must be able to trust Traffic Commissioners and their staff.  Anything that undermines trust on either side is to be avoided.

23.      As a result of allowing the appeal the continuation fee is now due.  Our order allowing the appeal, announced orally at the hearing, included a provision that the Appellant is to pay the continuation fee by 16.30 on Friday 10 October 2014.  In addition he is to confirm to the OTC, by the same time and date, the current address for correspondence and the current address at which vehicles are parked, i.e. the operating centre.  It will be for the Traffic Commissioner to decide whether any action is required as a result of possible breaches of s. 26(1) of the 1995 Act.

 

 

 

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

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

9 October 2014