Neutral Citation Number: [2015] UKUT 206 (AAC) Appeal No.  T/2014/76

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

 

ON APPEAL from the DECISION of

Beverley Bell, Senior Traffic Commissioner for the

North West of England Traffic Area dated 16 October 2014

 

 

 

Before:

Her Honour Judge J Beech, Judge of the Upper Tribunal

Leslie Milliken, Member of the Upper Tribunal

Michael Farmer, Member of the Upper Tribunal

 

 

 

Appellants:

 

 

TRANSFREEZE LIMITED, WILLIAM MORRITT & JAMIE MORRITT

 

 

Attendances:

For the Appellants: James Backhouse of Backhouse Jones Solicitors

 

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

Date of hearing: 21 April 2015

Date of decision:   7 May  2015

 

 

 

 

DECISION OF THE UPPER TRIBUNAL

 

IT IS HEREBY ORDERED that these appeals be DISMISSED with effect from 23.59 on 28 May 2015

 

 

SUBJECT MATTER:-  Adverse maintenance and drivers hours investigations; good repute and revocation; failure to give operator an opportunity to cross examine drivers during the course of drivers hours hearings; allegation of bias made against the Senior Traffic Commissioner.

 

 

 

CASES REFERRED TO:-  Re S-W (children) (2015) EWCA Civ 27; E A Scaffolding and Systems Limited & Secretary of State (2004/426); 2002/25 HJ Lea Oakes; Porter v Magill (2001 UKHL 67); Bradley Fold Travel Ltd & Peter Wright v Secretary of State for Transport (2010) EWCA Civ 695.

 

 

REASONS FOR DECISION

 

 

1.            This is an appeal from the decision of the Senior Traffic Commissioner for the North West of England Traffic Area (“STC”) made on 16 October 2014 when she revoked the standard international operator’s licence of Transfreeze Limited (“Transfreeze” or “the company”) under sections 26 and 27 of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”) and found that both William Morritt (“WM”) and Jamie Morritt (“JM”) had lost their good repute under section 27 of the Act.  The issue of whether JM and Transfreeze should be disqualified was adjourned and is now to be determined by the STC upon the conclusion of this appeal.

 

2.            The factual background to these appeals appears from the documents, the transcript and the STC’s written decision and is as follows.  On 18 July 2012, Transfreeze was granted a standard international operator’s licence authorising twelve vehicles and twelve trailers with eleven vehicles and eleven trailers in possession.  The company’s principal business was the international movement of refrigerated, hanging meat.  WM was the Transport Manager.  Two maintenance contracts were on the operator’s file held by the Office of the Traffic Commissioner (“OTC”) and the preventative maintenance inspections (“PMI’s”) were to take place every six weeks.  On 19 June 2013, Transfreeze applied to increase its vehicle authorisation to twenty one vehicles and twenty five trailers.  That application was ultimately abandoned immediately prior to the public inquiry taking place.

 

3.            On 6 November 2012, one of the operator’s vehicles was issued with an overloading prohibition as a result of a gross overload of 4.83%.  On 28 November 2012, a prohibition was issued as a result of the failure of both drivers of a double manned vehicle to enter the correct time periods on their tachograph charts. The drivers were also issued with fixed penalty notices.  On 11 December 2012, a prohibition was issued as a result of a driver failing to take his minimum weekly rest.  As a result of the various infringements, Traffic Examiner (“TE”) Russell was asked to undertake a drivers’ hours and records investigation and Transfreeze was sent a s.99Z(A) letter requesting production of all drivers’ hours records for the period 1 February to 31 March 2013 along with all driver licences for drivers employed during that period.  Analysis of the records revealed 77 apparent drivers’ hours and records offences which amounted to an infringement rate of 10%:

 

·         22 four and a half hour infringements

·         17 instances of drivers failing to take a minimum daily rest period

·         22 instances of drivers exceeding their daily driving period

·         3 instances of drivers failing to take their minimum weekly rest

·         10 instances of drivers failing to keep a tachograph record of their journeys

·         3 mode switch infringements.

 

4.            At various dates in August and September 2013, twelve drivers were interviewed by TE Russell.  They put forward various explanations for the infringements: tachograph malfunctions; misunderstandings as to the rules, particularly relating to the interruption of rest with ferry crossings; incorrect use of the mode switch; vehicle breakdowns; lack of available safe parking around ferry terminals; severe weather conditions; becoming lost whilst looking for a factory; miscalculations as to time; queuing at the docks.  Driver Graham Foy told TE Russell that offences of failing to use a chart and failing to take sufficient rest were “due to threats from Mr Morritt .. He was watching on his tracker, when I stopped I was instructed to carry on without my card in .. Also it was bad weather; it was heavy snow in France.  I couldn’t make it”.  None of the drivers had received training in the rules on drivers’ hours whilst employed by Transfreeze and those who had completed some driver CPC modules had not done so whilst employed by Transfreeze.  None of the drivers had completed their CPC training.  A number of drivers stated that their infringements had been brought to their attention by AIM (a tachograph analysis company used by Transfreeze) and their infringement reports discussed. 

 

5.            On 18 December 2013, TE Russell undertook a follow up visit to Transfreeze and that was marked “mostly satisfactory”.  Matters of concern were that there was no record of any verbal warnings having been given with regard to drivers’ hours offences; there was no proactive Working Time Directive procedures with issues concerning the same being picked up only upon tachograph analysis; he suggested that drivers should sign to acknowledge receipt of a drivers’ hours book.

 

6.            On 7 January 2014, WM was interviewed.  He told TE Russell that in February and March 2013 the company “left it to AIM” to ensure that the drivers understood the drivers’ hours rules and regulations and Transfreeze would receive reports from AIM which would then be used for disciplinary purposes.  Transfreeze was now more proactive in that all of the drivers sign for a drivers handbook issued by the Freight Transport Association (“FTA”) which included information on the Working Time Regulations.  A points based disciplinary system had also been introduced in respect of drivers’ infringements which involved the issuing of warning letters and which could ultimately result in dismissal.  Transfreeze recorded all warnings in a book.  The analysis of the records was still undertaken by AIM.  WM stated that he was either unaware of drivers infringements or gave possible explanations for them including vehicle breakdowns, severe weather, difficulties in parking around Calais and drivers misunderstanding the rules.  He maintained drivers had been spoken to about their infringements and advice had been given.  He denied that he was aware that Graham Foy had driven without a driver’s card and he denied either threatening him or indeed any other driver.  A forward planner was used for driver and vehicle unit downloads, tachograph calibration and bi-annual checks.  The forward planner was operated in conjunction with the two maintenance contractors. 

 

7.            During the course of the investigation, the following prohibitions and fixed penalty notices were issued to Transfreeze vehicles and drivers:

 

·         On 21 June 2013 a prohibition for an axle overload of 7.83% and gross overload  of 10.89%. A fixed penalty notice was issued to the driver. 

·         On 24 August 2013, a drivers’ hours and records prohibition for a driver failing to take a minimum daily rest.

·         On 20 November 2013, a prohibition for a first axle overload of 4.93%, a second axle overload of 18.09%, a gross overload of 19.7% and a train overload of 7.33%.

·         On 22 November 2013, a prohibition for a first axle overload of 10.7%, a second axle overload of 11.22%, a gross overload of 14.72% and a train overload of 4%.  A fixed penalty notice was issued to the driver.

·         On 29 November 2013, a prohibition for a first axle overload of 0.88%, a second axle overload of 6.87%, a gross overload of 13.11%.  A fixed penalty notice was issued to the driver.

 

8.            The conclusion in TE Russell’s main report was that as a result of the drivers’ hours infringements, it was considered that Transfreeze was not complying with its Statement of Intent regarding drivers’ hours and records.  He noted that Transfreeze had fully cooperated with him during his investigation and made drivers available for interview during their normal working day.  The company had responded promptly to first requests for information.

 

9.            On 30 and 31 January 2014, Vehicle Examiner (“VE”) Howard carried out an unannounced investigation into the company’s maintenance arrangements.  He checked two vehicles which were clear of defects and the MOT pass rate was 75%.  However, his investigation was marked unsatisfactory as a result of the following:

 

·         Whilst two maintenance contracts were in place, Transfreeze had employed a fitter in order to bring maintenance in house.  A “van” had been purchased for the fitter to equip as a mobile workshop.  VE Howard was concerned by these arrangements as the operating centre was a rough surfaced yard with portakabin offices.  There was no covered area, underside inspection facilities or tools available on site.  The change of maintenance provider had not been notified to the STC.

·         There were large gaps in the PMI records of up to four months.  VE Howard was told that the reason for the gaps was that the missing PMI records were with the accountants.  Transfreeze was required to make the missing records available for the following day.  However, when checked the following day the presented records remained incomplete.

·         Those PMI records produced did not show that all identified defects had been rectified.

·         There was no forward planner, Transfreeze having previously been reliant upon its maintenance contractors to notify them when PMI’s were due.  Transfreeze had just commenced a new system of forward planning which was very limited.

·         The driver defect reports were few in number.  Some vehicles had no driver defect records at all and there were some defects not shown as rectified for consecutive days. 

·         Transfreeze had been issued with six delayed and one immediate PG9’s.  Two were for missing wing tops and two PG9’s had been issued when a vehicle had been presented for PG9 clearance.

 

10.         WM responded to VE Howard’s findings in writing. The company had already started to rectify its shortcomings in its maintenance regime.  A mechanic/service manager (Darren Swietek) had been employed to oversee maintenance and would liaise with the contractors until the company had adequate facilities to bring vehicle maintenance “in house”.  A new torque wrench had been purchased.  The company was using a new maintenance contractor called Trucktek to carry out PMI’s and this change would be notified to the STC.  One PG9 for a missing wing top had been the result of a driver removing the wing top, not realising that this was unlawful in this country.  The company had reiterated that all drivers must complete their daily defect checks and that defect reports must be submitted at the beginning of each day and failure to do so would result in disciplinary proceedings.  Having considered this response, VE Howard concluded that the operation “appears to be run in an uncontrolled fashion” and the response of WM gave no reason for some of the shortcomings found during the investigation.  As a consequence, VE Howard concluded that the company was not complying with its Statement of Intent with regard to maintenance undertakings.

 

11.         By separate call up letters, six drivers were called to driver conduct hearings scheduled for 18 July 2014 (the remainder of the drivers having been issued with warning letters by the STC) and Transfreeze and WM (as Transport Manager) were called to a public inquiry to take place on the same day.  All matters were in issue including the good repute of WM as Transport Manager.  The call up letter to Transfreeze included the following passage with the emphasis as set out below:

 

“What you must do now:

 

·         Confirm you attendance ...

·         Start to collect your own evidence to allow you to set out your case at the inquiry.  This should include at least the following documents:

i.              The regular safety inspection records for the last 6 months;

ii.            The maintenance contract(s);

iii.           The last 6 months’ driver daily defect reports;

iv.           Forward planner;

v.            Evidence of training or disciplinary action received by drivers and managers;

vi.           Anything else which you think will help show you are a compliant operator or are taking steps to address the failings identified.

 

You must bring this evidence with you to the public inquiry”.

 

12.         In the days leading up to the public inquiry, Tim Culpin, of Aaron & Partners solicitors submitted a document bundle on behalf of Transfreeze including an Operator Compliance Audit prepared by Penkridge Transport Management on 7 July 2014 with an overall score of 91.18% and a document entitled “Temporary Relaxation of the Enforcement of Drivers’ Hours and Working Time Rules: Distribution of Road Salt, Animal Feed and Kerosene, Gas Oil and LPG” which covered the period 28 March 2013 to 8 April 2013.  The Case Summary prepared by Mr Culpin informed the STC that Transfreeze accepted the evidence of VE Hudson and TE Russell save that WM denied that he had threatened driver Graham Foy.  WM accepted full responsibility for the compliance failures of Transfreeze and would be stepping down as the Transport Manager.  Another “is being recruited”.  WM hoped that he may retain his good repute but if necessary he would resign as a director and transfer his 50% shareholding to JM who already held a 50% shareholding.  “While not an excuse, a significant factor in WM’s recent management of the company’s affairs is that he has for the last 2 years been the principal carer for his now 91 year old father who is suffering from severe Alzheimer’s disease and dementia.  His father remains at home with his mother, now 88 years of age.  In January 2014 WM handed over all operational aspect of management to JM”.  The recent audit undertaken by Penkridge Transport Management (“Penkridge”) was relied upon to establish that significant improvements in the company’s systems had been achieved and the company intended to rely upon Penkridge in the future.

 

13.         At the hearing that took place on 18 July 2014, six drivers attended and two were represented by Mr Sasse of Counsel. WM and JM were present on behalf of the company and were represented by Mr Culpin.  Anthony Bradshaw, the proposed Transport Manager was also in attendance along with Paul Duncan and Leonard Cook from Penkridge.  The STC informed those present that she was intending to deal with the drivers’ conduct hearings first and no objection or representations were made in relation to her approach.  In particular, there was no application made by Mr Culpin for leave to cross examine Graham Foy or indeed any other driver who might state something in evidence which was not accepted by Transfreeze and/or WM.  Those hearings then proceeded in the presence of all those listed above save for one driver’s hearing which was heard in private as he did not want to feel “intimidated” whilst giving his account.  All of the drivers repeated the accounts they had given in interview.  However, some of the drivers went further:

 

·         Jason Brown (one mode switch offence, six offences of failing to take a minimum daily rest, five offences of exceeding the daily driving period and one offence of failing to take a minimum weekly rest and six offences of failing to use a tachograph chart) stated that the problems with his driving hours would begin when he would arrive at a factory and the trailer had not been loaded.  There was then no adjustment to his duties to take account of the fact that he had set off late.  When he arrived at his destination he would then need to take his rest.  However, he would receive a telephone call from Transfreeze instructing him to tip the trailer and if Transfreeze was not telling him to interrupt his rest, it was someone from the factory knocking on his door instructing him to present the trailer for unloading. 

·         Graham Foy (one four and a half hour offence, one offence of failing to take a minimum daily rest, one offence of exceeding the daily driving period and one offence of failing to keep a tachograph record) gave an example of a journey when he had set off late because the trailer had not been loaded on time.  He was travelling to Holland and it was snowing badly.  He ran out of time and it was impossible to reach his destination.  WM telephoned him and said “If you don’t get there ..”  He wanted him to drive to his destination.  Mr Foy was not prepared to break the rules and so he left Transfreeze two weeks later.  He said that Transfreeze watched the progress of the vehicles via satellite vehicle trackers.  If a driver stopped, he would receive a call or a text stating “why have you stopped?”  Mr Foy was reminded of the importance of telling the truth and he confirmed that he was.

·         Gilbert Banner (one four and a half hour offence, two offences of failing to take a minimum daily rest period, three offences of exceeding the daily driving period and one offence of failing to use a tachograph chart) stated that “everybody knew” what was going on and WM had said “the others do it , you do it”.

·         Stephen Simpson (sixteen four and a half hour offences, six offences of exceeding the daily driving period, one offence of failing to take a minimum daily rest period and one mode switch offence) stated that he committed offences because his employer wanted him to.  He was asked to break the rules by WM.  Mr Simpson said “no” at first but then did so.

 

14.         It should be noted at this stage, that apart from one driver who had his vocational licence immediately suspended for a period of two weeks for an offence of using a mobile phone whilst driving, the STC’s decisions relating to the drivers were adjourned and included in the decision relating to Transfreeze.  The outcome of those hearings are not relevant to the issues in this appeal.

 

15.         William Morritt was then called to give evidence and he adopted his witness statement which had been included in the company’s hearing bundle.  That statement informed the STC that WM denied that he had threatened Graham Foy.  WM did accept that he was responsible for the company’s failings and although JM bore some responsibility as a director, he had had little or no involvement in the operational aspects of the company until the summer of 2013 when he had started to assist on the traffic desk.  Prior to that he had been the finance director of the company.  In January 2014, WM handed over operational responsibility for Transfreeze to JM as he had a better understanding of what was needed to operate a compliant company.  He and Davie Malcolm together fulfilled the role of Transport Manager from January 2014 and together they had made significant improvements which were evidenced by the audit report of Penkridge.  WM’s role following hand over was that of a driver.  The issues within the company had made WM “quite ill” in the Autumn of 2013 and his reduced role allowed him to devote more time to his father.  His father had suffered from dementia for two to three years and this was very distressing.  WM tried to spend as much time with him as he could.  His mother remained in good health but the majority of his father’s care was undertaken by WM or by his wife if WM was driving.

 

16.         WM accepted that he might lose his “professional competence” and good repute.  It was expected that JM would qualify as a Transport Manager and to that end he was booked on a course.  In the interim, they were interviewing a prospective candidate to take JM’s place as Transport Manager.  WM hoped that with Davie Malcolm and the support of Penkridge, JM would be allowed to continue to operate the company.  In the event that WM retained his good repute, he would still leave JM to deal with the operational aspects of the company. 

 

17.         WM attributed the “problems” to his failure to properly train the drivers and his failure to properly control them.  He did not find it easy and it would appear that when he was unable to “get them home when they wanted” some of them “chose to take matters into their own hands and sadly I did not spot this”.  However, the drivers should have known better.  The company’s work was made more difficult by ferry crossings, accidents, congested roads and adverse weather conditions which posed a problem in February and March 2013.  He should have only employed drivers who were prepared to spend time away from home.  In the event, a number of the drivers employed in the period covered by TE Russell’s investigation had now been dismissed for stealing diesel.  WM also considered that he had tried to expand too quickly.  Davie Malcolm had operated his own fleet of vehicles undertaking similar refrigerated work.  Unfortunately his health deteriorated and his business went into administration.  WM purchased Mr Malcolm’s semi-trailers in April 2013 and employed him.  Mr Malcolm brought significant work with him.  Unfortunately, for personal reasons Mr Malcolm could not become the nominated Transport Manager of Transfreeze despite being a CPC holder.  Then, WM became aware of business opportunities which were only available to Dutch hauliers and so in November 2013, he registered Transfreeze B V, a Dutch haulage company and obtained an operator’s licence with an authorisation of 25 vehicles and 25 trailers with four vehicles and four trailers in possession.  WM was the director and Transport Manager on that licence and the vehicles were managed through the operating centre of Transfreeze in Ashbourne and subject to all the compliance systems in operation there.  He did not consider that he was “flagging out” but the Dutch licence meant that he was more able to obtain return loads for his vehicles.  The result was that he had too much to do and he was not up to date with Transport Manager responsibilities which made matters worse.  WM apologised to the STC and expressed his regret for what had taken place within Transfreeze.

 

18.         In answer to the questions of the STC, WM accepted that there was “probably” a culture of non-compliance within the company.  One customer in particular exerted pressure in respect of deliveries and WM wrote the name of that customer on a piece of paper and handed it to the STC.  He accepted that non-compliance in relation to maintenance was his fault but he had been “very ill” in 2013 and had been under a lot of pressure both personally and professionally.  Since VE Howard’s visit, a number of changes had been implemented, for example the contract with Trucktek.  He “would not say” that some of the company’s vehicles were not inspected for four months.  The records were “probably” not kept properly.  The reason for some PMI records being with the accountants was because they were attached to invoices.  He accepted that when they were retrieved from the accountants, there was “not a lot more” to add to those records already checked by VE Howard.  WM had been operating vehicles since 1977.  He accepted that there had not been a forward planner at the operating centre when VE Howard visited but they did have their own fitter.  They entered into a maintenance contract with Trucktek at the end of January 2014.  He was then asked about his role as “principal carer” for his father and what that entailed.  WM explained that he was a “carer” because he “cared” for his parents.  He visited them in the morning and at midday.  He accepted that in fact his mother was his father’s principal carer with his assistance.  He was now driving on an ad hoc basis undertaking continental work and nights away (for example, two in the previous week).  He estimated that he was driving for only 20 hours a week. 

 

19.         Whilst WM had not been fulfilling the role of Transport Manager since January 2014, he continued to be responsible for checking the drivers CPC’s.  He had no excuse for waiting for five years before embarking on a schedule of driver CPC training which was on-going at the date of the public inquiry.  WM accepted that apart from arranging for Trucktek to be the maintenance contractor no other steps had been taken to improve compliance until the call up letter was received and Tim Culpin had been instructed.  He had believed that his son had been effectively acting as Transport Manager and that he had started to put systems in place.

 

20.         Jamie Morritt then gave evidence and he too adopted his witness statement which informed the STC that having trained as a mechanic and having acquired his LGV driving licence, he joined his father’s transport operation as an international driver in 2008.  He then moved into the office in 2010 when the company was operating six vehicles.  Transfreeze was then set up in 2011 and once the operator’s licence had been granted in 2012, JM became the Finance Director.  He had no involvement in the running of the vehicles.  He did however recall that in March 2013, the weather had been “horrendous” and he was aware of problems being caused to the drivers as a result of snow.  He agreed with his father that the company had expanded too quickly. 

 

21.         JM became involved in the operational side of the business in the summer of 2013 when he started to help Mr Malcolm.  He only became aware of the drivers’ hours issues when TE Russell asked to interview the drivers.  He became fully aware of the difficulties with compliance when his father’s health deteriorated and he was away from the business in about November 2013.  JM then realised that things were “far from right” and he underwent a “baptism of fire”.  When his father returned to work, JM then had to be signed work off as a result of stress.

 

22.         The decision to hand over the operational responsibility for the company to JM was taken following VE Howard’s visit. JM had in fact started to address maintenance problems by taking the decision to stop using the two agreed maintenance contractors because they were some distance away from the operating centre and to redeploy a driver (Swietek) as mechanic and bring the maintenance of the vehicles and trailers in house.  JM accepted that this was inadequate because of the lack of facilities at the operating centre.  It was he who identified Trucktek Limited and their contract commenced on 19 May 2014. 

 

23.         WM now only assisted him when requested to do so; otherwise, he worked as a driver.  JM had recruited a finance manager and a traffic desk operative and he had upgraded the satellite tracking system which provided real time data about the location and activity of the driver along with drivers’ hours and working time information which assisted with distribution decisions.  There had been a full review of vehicle maintenance and drivers’ hours and records compliance and JM ensured that Trucktek Limited was fully utilised.  The terms and conditions of the drivers employment had been improved and as a result, they now employed higher quality drivers and driver turnover had reduced.  JM considered that Transfreeze BV was a “useful base” for driver changeovers and the operation had increased Transfreeze’s presence in Europe resulting in increased work for better rates although JM did not want to take advantage of that until “best practice” in all operational areas had been achieved.  He presently managed four Dutch vehicles from the Ashbourne operating centre.  To avoid overloading of vehicles, he was replacing four by two units with six by two units.  All trailers were being refurbished at a substantial cost (the figure was set out in his witness statement).  Penkridge had also been contacted after the call up letter had been received, upon the recommendation of Mr Culpin.  JM acknowledged that the drivers CPC training had been left “very late” and he was looking for agency drivers to cover the full time drivers whilst they completed their training. 

 

24.         JM appreciated that his father had lost his “professional competence”. “We are presently interviewing someone for this role and if deemed suitable we will ask him to attend the hearing”.  Otherwise Paul Duncan of Penkridge had agreed to act as a temporary Transport Manager until JM had obtained a CPC or alternatively a period of grace was requested.  JM accepted that as a director he should have been more aware of the issues earlier than he was.  His father had struggled and had protected JM from the problems even to the extent of instructing JM to stay away from the operating centre when TE Russell was due to attend.  JM apologised and hoped that the STC would understand that “in a close family context such issues can arise”.

 

25.         In his evidence, JM stated that he had “effectively” been fulfilling the functions of Transport Manager since January 2014.  He was not undertaking any driving but concentrating on operations.  He accepted that when the operator’s licence was granted he did not know about international road haulage but he had been learning from Mr Malcolm who had started working with the company in March 2013 and they now ran the traffic desk together. 

 

26.         JM accepted that he and his father knew that the drivers were “turning up at Calais and that they were running without their cards and breaching drivers’ hours” rules.  They were aware of this because of the vehicle satellite trackers.  AIM was undertaking tachograph analysis and WM was dealing with the drivers.  JM was not happy about the general culture of non-compliance but he bowed to the experience of his father but then as it came to light, he learnt more about the job and about compliance.  He accepted that he was a qualified LGV  driving licence holder.  He was aware that drivers should not “run without a card” and that the company’s drivers were doing so.  He accepted that he had condoned that conduct and the commission of drivers’ hours’ offences as a director of the company.  He accepted that the impression from the drivers who gave evidence was that non-compliance was “driven from the top”.  He accepted that he should have “acted upon it” but did not do so because of “pressure” from his father who was the Transport Manager.  In any event, his father was difficult to engage with on occasions and he did not always listen.  Also, he did not “have it out” with WM because JM was busy undertaking his own duties as finance director at the time.  When his father handed operations over to him in January 2014, JM did not employ a Transport Manager because his father did not hand over “complete control” and his father was not “the easiest person to talk to about these things”.  JM appreciated the implications to road safety and competition by non-compliance.  He accepted that he should have acted sooner to ensure that the drivers obtained their CPCs.  The company communicated with the drivers by text using company mobile phones and the FTA handbook gave instructions about not using phones whilst driving.  WM had not bought one of the FTA books to the hearing.  He was 75% “up to speed” with international road haulage and Mr Malcolm provided the remainder of the knowledge.  He contended that in the past the drivers would put pressure on his father and would tell planners that they would not work weekends.  That had stopped.

 

27.         WM then intervened.  He repeated that none of the drivers had been threatened with the sack or that their wages would be withheld if they did not drive in breach of the rules.  They were however “under pressure to complete the deliveries”.  He denied that he was blaming the drivers.  He agreed that he came across as someone who would be “clear and direct” with drivers and that they would know exactly what the position was even if it were by implication.  He denied that he had attempted to mislead the STC by stating in his statement: “It would appear that when I was unable to get them home when they wanted some of them chose to take matters into their own hands and, sadly, I did not spot this”. He agreed that the drivers painted a “very different picture” in their evidence and that none of them had any reason to lie as they had all left Transfreeze.  He also agreed that factors such as ferry crossings, road works, congested roads and adverse weather were factors that all operators had to deal with. 

 

28.         The STC then returned to JM.  The company’s Transport Manager would be Anthony Bradshaw until JM had obtained his CPC.  They had found him a “couple of weeks ago” and he was a friend of WM from when they had worked together “years ago”.  The STC asked: “So what did you do? Ring around for a Transport Manager, phone a friend or did you put an advertisement in the Trade Press?”  JM replied: “It was an advert and he came to us .. in the local paper”.  JM was unable to say which paper or who had placed the advert and then admitted that there had not been an advertisement at all.  He had said there had been an advertisement because he was “under a lot of pressure”.  He later described his reference to an advert as a “slip of the tongue”.  They had in fact “phoned a friend”.  He appreciated that not tell telling the truth to the STC did not bode well for someone who wanted to continue to operate vehicles.  What happened was that WM asked Mr Bradshaw to be the Transport Manager.  Mr Bradshaw had some relief driving for the company.  There had been a meeting between the two men and it was agreed that Mr Bradshaw would be paid £120 per day plus expenses.  The meeting had taken place a month before the hearing.  JM was not present at the meeting.  He was aware that Mr Bradshaw had worked in planning in the haulage industry about 25 years ago.  Following the meeting between WM and Mr Bradshaw, JM did not have his own meeting with him.  In fact the first contact between them was the morning of the hearing.  JM was prepared to stake his reputation and licence on a temporary basis on a man who was a friend of his father who “looked good on his CV”. 

 

29.         Anthony Bradshaw then gave evidence.  He held an international CPC and he had regularly updated his CPC knowledge.  He had known WM since the 1980’s and he accepted that the evidence he had heard did not fill him with a “rosy glow”.  He had met WM three or four weeks before the hearing and he did not “pull any punches” although “more had come out this morning”.  It did not deter Mr Bradshaw. He had already looked at what JM had done and he had met him a couple of times and they had driven to the hearing that morning.  He did not think that Transfreeze was “on the scrap heap”.  He accepted that he had little experience of international operations but he considered that the basic principles were the same.  He had met Mr Malcolm. 

 

30.         The STC then considered the issue of whether the operator’s licence should be suspended pending the completion of driver CPC training.  She was told by Mr Culpin that there were no alternative hauliers to take on the work on a temporary basis because they did not have the appropriate haulage experience.  JM told her that Transfreeze did not sub-contract work and so did not have sub-contractors to turn to.  Their competitors were Eardley’s Transport, Ray White and Gilders who had their own contracts. The implication in the evidence was that if the company’s work were to be sub-contracted out, the company would lose it to their competitors.  Mr Culpin told the STC that the company could however survive with a fleet of eight vehicles. 

 

31.         The STC then asked about the current maintenance arrangements.  JM informed her that he did not have any evidence with him of the driver defect reporting system as he was not aware that such evidence was required.  He had not produced the forward planner wall chart.  He did however have a small forward planner which he kept on his desk which upon close scrutiny was unreliable as a maintenance record or as a forward planner.  The STC looked at the maintenance records of three vehicles and it was evident that PMI intervals were still being stretched and the PMI records were incomplete.  JM was asked why it had taken from January to May for Trucktek to be used to carry out PMI’s and was told that May was the month when JM could get the vehicles in for service and to set the system up. 

 

32.         Leonard Cook was then called.  He had carried out the compliance audit on 7 July 2014.  The STC expressed her concerns about the records held by the company.  Mr Cook stated that he had in fact had difficulty collating the paperwork during the audit but he did manage to do so by visiting Trucktek.  Trucktek said they would sort this problem out.  He accepted that he should have highlighted this in his audit.  The PMI records were clean because Transfreeze used a clipboard during the PMI and then provided a clean copy to the operator.  That was the reason for the delay in Transfreeze receiving the PMI records.  The STC then asked to look at some driver defect reports which had been produced by Mr Cook.  There were no defects shown on those produced.  Mr Cook agreed that the absence of defects would cause him concern as a Transport Manager but the system was that the drivers were reporting defects direct to the office and the vehicles were then sent straight to Trucktek.  Despite this, Mr Cook’s audit was positive about the driver defect reporting system.

 

33.         The STC then turned to tachograph analysis.  JM stated he had not brought any infringement reports to the hearing.  However, Mr Culpin then produced the AIM reports for 1 January 2014 to 30 June 2014.  The STC concentrated on the second three month period.  The STC highlighted some of the worst driver offenders: Anderson had 88 infringements and 1 fault out of 223 charts; Banner had 31 infringements and 7 faults out of 60 charts; Barnett had 45 infringements and 1 fault out of 118 charts; Anthony Bradshaw (the proposed Transport Manager) had 25 infringements and 2 faults out of 52 charts; Clarke had 73 infringements and 7 faults out of 119 charts.  She also noted that WM had 4 infringements as did JM who had driven for seventy hours and had covered 4672kms.  JM conceded that he had been doing “a little bit of driving”.  He had not seen the reports produced by Mr Culpin although he had seen others.  He was asked about how records were kept of action taken in response to infringement reports.  He referred to a book and this was then produced by Mr Cook.  It was entitled “Verbal/Written Warnings Record January 2014”.  There were only four entries concerning drivers’ hours and records, the other nineteen entries concerned complaints made by drivers and other staff.  One entry dated 5 April 2014 read “Spoke to Bill Lilly about double manning and how to operate legally.  Never got a chance to speak to Anthony Bradshaw”.  JM stated that this entry was made by Mr Malcolm and at the time Mr Bradshaw had gone home.  Another entry in February 2014 included the words “spoke to Bill”.  The reference was to WM and this demonstrated that WM helped out when required.  JM accepted that the book should be “full of warnings” but whilst the entries indicate that Transfreeze was “not a happy place to work” at the time of the entries, the drivers were now happy.

 

34.         The STC then returned to Mr Cook.  He accepted that he had not seen any infringement letters signed by the drivers and the company representatives.  His audit was undertaken by asking questions and noting the answers without requesting sight of evidence to demonstrate procedures.  He agreed that in the circumstances, the audit was not effective.  The STC then enquired as to the identity of two men who were sitting at the back of the hearing room.  She was told that they were friends of WM and one of them was Ray White, one of the company’s competitors although in reality they did not compete.  WM had not realised that Mr White was going to attend the hearing. 

 

35.         Mr Culpin then made closing submissions.  He referred to his written submissions in which he had stated that in the event of revocation, Transfreeze could take all of its vehicles to Holland and operate under its Dutch licence.  The loss of WM’s repute may cause the Dutch authorities to remove WM as Transport Manager but in any event Transfreeze BV was looking for a local Transport Manager in Holland.  As for curtailment, this would have an impact upon the company’s profitability.  The disqualification of WM would leave JM as a director of the company.  If both were disqualified then that would have the same effect as revocation because there were no alternative available personnel to become directors.  In his oral submissions, Mr Culpin referred the STC to a number of personal guarantees that WM and JM had entered into and that they would be bankrupted if the company were to close.  Finance was dealt with but the issues are not relevant to this appeal.  The STC summarised Mr Culpin’s submissions in this way:

 

·         It was a difficult case.

·         William had been open in accepting his failings.

·         Jamie had made a terrible error in lying to me under pressure of giving evidence.

·         He knew that I would conduct a proper balancing act and ask myself the necessary question of how likely was it that Transfreeze would be compliant in the future.

·         The company had moved forward quite a long way since January 2014.

·         David Malcolm an experienced international operator was on board and it was only his health problems that prevented him from being the transport manager (I did not hear any direct evidence of this).

·         Anthony Bradshaw had good credentials, I could trust him and he had offered me a personal undertaking to tell me if there were any problems that prevented him carrying out his statutory duty properly.

·         Whilst the company had a mountain to climb regarding the driver CPCs they would be able to sort it out.

·         He asked me to allow the company to continue with a fleet of 8 vehicles as that would be the critical number to allow the business to continue.

·         William would resign as a director and only be employed as a driver and by implication would take no part in the management of the business.

 

36.         In her written decision, the STC acknowledged that “this operator” had not come to her attention before and must therefore be treated as previously compliant.  That was positive feature that weighed heavily in the balance. The STC made the following findings of fact:

 

·         Transfreeze had a record of overloading (s.26(1)(c)(iii) of the Act and fixed penalty notices (s.26(1)(ca).

·         Since 2012, its drivers had not been complying with the rules on drivers’ hours and tachographs.  It should have started to take action from that point to address the problem.

·         Drivers employed in February and March 2013 stated that infringements were due to a number of factors including pressure of work, insufficient knowledge of the rules, adverse weather and pressure from either their employer or its customers.  This was aggravated by a “total lack” of any driver CPC training.

·         By virtue of the analysis reports submitted by AIM, Transfreeze had actual or implied knowledge of the drivers’ failings.  It should have taken remedial action.  The drivers’ failings were highlighted by TE Russell in January 2014 when WM was interviewed.  Again, action should have been taken.

·         In February 2014, the company was put on notice of its significant problems with maintenance, as a result of VE Howard’s investigation.  Action should have been taken at that point.

·         Transfreeze had been without a nominated Transport Manager since January 2014 and was therefore not professionally competent.

·         The call up letter triggered the commissioning of two audits (maintenance and drivers’ hours) by Penkrdige which were marked satisfactory when they should have been marked as unsatisfactory.

·         A programme of CPC training was not implemented until June 2014.  This failure was negligent and reckless as it left the drivers with only a few weeks to obtain the required training. 

·         WM “fell on his sword” and had accepted that he had lost his repute as a Transport Manager but he did not do so with good grace or with a genuine intent.  Rather he was “deliberately either dishonest or disingenuous in his evidence”.  One example was his attempt to mislead the STC as to the role he played in the care of his father and another was his attempt to lay blame for the culture of non-compliance at the door of the company’s major customer.  A further example was his assertion that he could not sub-contract the company’s work in the event of a licence suspension pending driver CPC Training.  He stated that there were no friendly competitors available and yet one of his supporters who attended the public inquiry was a friend and a competitor.  A further factor in assessing the credibility of WM was his attempt to blame the drivers for the tachograph offending and his assertion that he was too soft with them and that he was “pushed around”.  The STC concluded that “nothing could be further from the truth”.  Satellite tracking meant that WM and the company knew where the vehicles and drivers were at all times.  The lack of any proper training of the drivers and the absence of any effective disciplinary procedures illustrated that the company was not taking its responsibilities seriously.  The lack of any proper record of either an effective disciplinary procedure or its implementation despite the company being on notice that it needed to take action as a result of the AIM analysis and the DVSA investigation demonstrated that WM was either condoning the drivers’ actions or in fact encouraging them to offend.  The warning book demonstrated that the company (and WM who was the brains of the company) had little if any respect for its employees and that it did not take its duties as an employer responsibly. 

·         JM may have taken over the operational responsibility for the company but he remained heavily influenced by WM and that this would continue to the detriment of compliance.  JM did not act as a competent director by appointing a new Transport Manager and was under the influence of his father in that regard.  He accepted that he did not do so because his father had not given him complete control and that he was not the easiest person to talk to.  JM was “tardy” in establishing new maintenance arrangements and there was no justifiable reasons for that.

·         JM “like his father” was not an honest witness.  He deliberately lied about how Mr Bradshaw came to be recruited.  He could have given a straightforward answer but rather he lied about an advert and only admitted it was untrue when pressed.  She rejected his assertion that it was “just a slip of the tongue”. 

·         Mr Bradshaw may have a reputable background but it was clear that his own driving did not comply with the drivers’ rules.  25 infringements on 52 charts was a high rate of non-compliance.  In the circumstances the STC was not satisfied that Mr Bradshaw as proposed Transport Manager was “compliant”.  The STC could not say whether that was the result of Mr Bradshaw not knowing the rules  or being put under pressure by WM.  Either way Mr Bradshaw had not been compliant and had not been disciplined.

·         As at the date of the public inquiry, vehicle maintenance arrangements were not satisfactory (s.26(1)(e)&(f)).  The STC rejected JM’s explanation that it had taken time to sort out the new arrangements.  A change of maintenance provider should be straightforward.  He allowed operational requirements to take precedence over PMI’s and there could be no justification for that. 

·         The Penkridge audit was not nothing more than a last minute knee jerk reaction to the call up letter.  It was not an effective audit as Mr Cook simply relied on what he was being told by WM and JM and as a result it was nothing more than a “back covering exercise”.  The STC placed no weight upon it.

·         As at the date of the public inquiry, the company did not have satisfactory arrangements in place for drivers’ hours and records compliance (s.26(1)(e)&(f)).  The AIM report made “uncomfortable reading”.  The offending was consistent and over a long period of time.  It was not caused by adverse weather or road works or traffic congestion or a shortage of safe parking.  In any event, these are matters that traffic planners take into account on a daily basis.  She rejected the submission that the temporary relaxation of the drivers’ rules (referred to in paragraph 12 above) had any relevance to the company’s operation.

·         There was a culture of non-compliance which was being driven by WM and JM and their desire to serve their customers.  The offending went back to at least December 2012 and yet at 30 June 2014 significant offending was still taking place and no action had been taken to stop it.   

·         Both WM and JM attempted to withhold evidence from the STC.  She rejected JM’s assertion that he did not know that the driver defect reports should be brought to the hearing.  The call up letter was clear and Mr Culpin is a specialist transport lawyer.  She concluded that the company did not want to produce the records, relying instead upon the inadequate Penkridge report.  Similarly, JM did not volunteer the AIM reports.  Mr Culpin produced them.  Neither did he volunteer the Warning Book but rather Penkridge produced it.  The fact that JM stated that he had only seen part of the analysis reports demonstrated that he was negligent in that he had failed to take all reasonable steps to acquaint himself with the analysis reports as a director particularly when such reports were to be produced at a public inquiry. 

 

37.         The STC found that as the breaches were serious and continuing that revocation was justified under s.26 of the Act.  Turning then to s.27 of the Act, the company had not satisfied the requirement of professional competence since January 2014 and had not asked for a period of grace.  In fact, it had requested a 75% increase in its fleet authorisation.  No steps were taken to find a Transport Manager and the STC determined that it would not now be fair in all of the circumstances to allow Transfreeze to remedy a wrong at the eleventh hour.

 

38.         Turning to good repute, JM had acknowledged that he no longer fulfilled this criteria.  The STC made that finding and disqualified him for an indefinite period.  She acknowledged that this would have an effect on the Dutch operator’s licence.  The real issue was the position of JM.  This was a family business with both directors being the “brains” of the company.  She rejected the request that she allow JM to continue with the operation with WM’s input being limited to driving vehicles.  The arrangement would not work as a result of WM’s personality and that he would continue to exercise undue influence over JM, Mr Bradshaw and the drivers and traffic planners.  The STC was not satisfied that she could throw JM a “life line”.  There was little to put in the positive balance when considering whether Transfreeze was likely to be compliant in the future except the promises of good intent from JM and WM had been open in his acceptance of the failings.  The fact that JM had been untruthful in his evidence weighed heavily in the negative and counteracted his acceptance of his failings.  Whilst the company had moved forward quite a long way since January 2014, the truth was that the company had done very little to ensure compliance until after receipt of the call up letter.  This was “too little too late”.  JM had been  responsible for compliance since January 2014, had failed to provide documents to the STC and had failed to even have a dialogue with the proposed Transport Manager.  If the STC allowed the situation to continue, road safety and fair competition would be unduly jeopardised.  It was highly unlikely that JM would comply in the future.  It would be an affront to the legitimate licensed transport industry to allow the operator to continue.  She did not trust JM as an individual or director and found that he was not of good repute.  In any event, the failings were so serious that revocation was required.  In the circumstances, the operator’s licence was also revoked under s.27 of the Act.

 

39.         At the hearing of this appeal, James Backhouse appeared on behalf of the Appellants and on the day prior to the hearing he submitted a skeleton argument for which we were grateful.  His first point concerned the way in which the STC conducted both the drivers’ conduct hearings and the public inquiry.  Mr Backhouse submitted that Graham Foy was a “central witness” in the DVSA case.  Mr Foy had stated in interview that he had been “threatened” by WM thus forcing him to commit drivers’ hours and records offences.  WM had been asked about Mr Foy’s assertion when he was interviewed and had denied it.  He also denied it in his witness statement.  It was obvious that Mr Foy would repeat his assertion when giving evidence, which he did.  However, the STC had determined that the drivers conduct hearings would be heard on the same day as the public inquiry and had then made it clear at the outset that she was going to “deal” with the driver conduct hearings first and then turn her attention to the public inquiry.  Mr Backhouse doubted the procedural lawfulness of this approach in his skeleton argument and in oral submissions stated that in reality the two processes had been amalgamated when the respective procedures were different and when the drivers were compellable as witnesses in their own hearings but not compellable as witnesses in the public inquiry.  The hybrid nature of the STC’s approach would or could not have been the subject of criticism if she had allowed Mr Culpin the opportunity to cross examine Mr Foy when he gave evidence in his own conduct hearing.  This she did not do and the fact that Mr Culpin did not raise the potential conflict in the evidence to be given by Mr Foy and WM either at the outset or when Mr Foy had given his evidence and had failed to make a request that he be permitted to ask questions of Mr Foy did not make the public inquiry hearing any less unfair.  The problem was exacerbated by the fact that the STC did not question WM about the conflict until he interrupted her when she was questioning JM to raise the issue.  It was at this point that the failure to permit Mr Culpin the opportunity to cross examine Mr Foy became a problem.  At the very least an adjournment should have been granted so that Mr Foy could re-attend the public inquiry for the conflict to be resolved (Mr Foy had left the building once his hearing had concluded).  Mr Backhouse submitted that he would have handled the public inquiry differently and he would have required the evidence of Mr Foy to be given in the context of the public inquiry.  On this point alone, the Appellants’ appeal should be allowed and the matter remitted for re-hearing.

 

40.         Our starting point is that there is no procedural irregularity in holding driver conduct hearings under s.116 of the Road Traffic Act 1988 (as amended) either at the same time or immediately preceding a public inquiry when all parties to both sets of hearings are present.  This Tribunal has previously stated that where there is a real possibility of conflict, this is the preferable course so that all issues of fact are resolved at the same time (see: 2002/25 HJ Lea Oakes).  In this case, whilst the STC did not raise the potential issue of evidential conflict between Mr Foy and WM, the Appellants were legally represented by a solicitor who is a specialist in road transport regulation and in the conduct of public inquiry and driver conduct hearings.  It is accepted practice for TC’s to allow cross examination of drivers who are attending before them to answer questions about their own conduct when their evidence is in conflict with that of the operator whose public inquiry is listed at the same time.  Whilst Mr Backhouse concentrated on the evidence of Mr Foy, other drivers gave similar evidence of a culture of non-compliance in relation to drivers’ hours and records which was known to exist by Transfreeze and WM.  Their evidence was new and yet at no stage did Mr Culpin request permission to cross examine any of the drivers.  But in any event, both WM and JM accepted that there was a culture of non-compliance.  WM blamed a customer, the drivers and his own inability to control the drivers.  JM went further and accepted that both he and his father were aware that drivers were committing drivers’ hours offences and that they were driving without keeping a record of their journeys and that nothing was done to prevent such offences from being committed.  In other words, he accepted that the drivers’ evidence was correct.  Whilst Mr Foy was the only driver to refer to being threatened, the STC does not make any adverse findings in relation to WM as a result of that specific assertion.  Her conclusion was that WM was either condoning the drivers’ actions or encouraging them to offend.  We are satisfied that such a finding was well made out on the evidence.  As the STC observed, WM was aware of all vehicle movements at all times; the drivers were not trained in the rules on drivers’ hours by Transfreeze; there was no or no effective disciplinary procedures in place to deal with infringements identified by AIM and we add, no evidence that WM or Transfreeze did anything to address the problems caused by a customer failing to have pre-loaded trailers ready for collection when Transfreeze drivers arrived at their depot thus making it difficult for the drivers to reach their destination and unload without breaching the rules.  Further, there was no evidence of drivers being instructed to stop to take rest when it was clear that they were either running out of hours or had run out of hours.  A finding that the drivers’ conduct was either condoned or encouraged was irresistible.  In all the circumstances, the failure of the STC to specifically enquire of Mr Culpin whether he wished to cross examine either Mr Foy or the other drivers is of little or no relevance, although such enquiry would represent best practice. As a result, this ground of appeal fails.

 

41.         The next point raised by Mr Backhouse concerned the STC’s approach to the issue of whether WM was the “principal carer” for his father and her conclusion that he was not.  The STC referred WM to the written case summary that had been provided as part of the Appellants’ hearing bundle.  The summary stated: “While not an excuse, a significant factor in WCM’s recent management of the company’s affairs is that for the last two years WCM has been the principal carer, assisting his now 88 year old mother with his now 91 year old father, who is suffering from Alzheimer’s disease and dementia.  WCM’s parents still live in their own home rather than in a nursing home” .  When questioned about this account and his role as a carer, WM stated that he could be described as the “principal carer” of his father because he “cared” for his parents.  He accepted that he was not a “principal carer” in the sense of looking after his father’s daily needs such as feeding him, providing hot drinks and assisting with bodily functions.  He stated that his mother was in fact his father’s “principal carer”.  Mr Backhouse submitted that whilst the STC was entitled to probe the reasons for JM’s failure to operate a compliant company, her approach to this issue was simply an issue of semantics.  In his own witness statement, WM had stated: “since handing over to Jamie I have assisted him as requested by him and have mainly acted simply as a driver.  This has assisted with my own health as all the difficulties had made me quite ill in the autumn of 2013.  It has allowed me to devote more time to my elderly father .. I try to spend as much time as I can with him .. and the majority of the carer duties fall to me ..”  Mr Backhouse submitted that the phrase or description of WM’s role was “not the point” but what he was in fact doing to assist his parents and Mr Backhouse submitted that the STC’s questioning on this point was designed to upset WM.  WM was not exaggerating the role he played in his father’s life and the STC was wrong to find that he was.  Mr Backhouse submitted that it was from this point that the STC started “not to believe” WM’s evidence. 

 

42.         We reject this point.  The case summary could not have been clearer. It was being asserted that WM’s failures as Transport Manager and Director were contributed to by him being a “principal carer”.  The STC’s questioning on this point was not unkind or inappropriate and it cannot be described as being designed to upset WM.  It was clear that his “caring role” was exaggerated in the document and was being put forward as an explanation for his failings within the company and the STC was entitled to take that into account when considering WM’s credibility and trustworthiness. 

 

43.         Mr Backhouse returned to this subject in his next point which amounted to an allegation that the STC was biased towards WM.  He reminded the Tribunal that WM had accepted his failings in his witness statement and the characterisation of that acceptance as being with “bad grace” was wrong.  Further, the STC’s questioning of him demonstrated that the STC was not seeking to understand WM and her questioning could not be described as “robust” but rather the questioning and approach was designed to undermine WM and show him to be dishonest and a bully.  Mr Backhouse sought to rely upon the following:

 

a)    The STC’s attitude and approach to WM having been described as the “principal carer” for his father;

b)    Comments which Mr Backhouse characterised as being sarcastic.  He referred the Tribunal to a passage in the transcript where the STC questioned WM about his failure to ensure that there was a nominated Transport Manager between January and July 2015.  Following WM’s admission that this was the case, the STC responded “Hey-ho, as my colleague in Scotland says, hey-ho”. Upon WM’s apparent failure to understand the STC’s comment, she explained that it was a statutory requirement and WM then accepted that it was the absence of a nominated Transport Manager that possibly resulted in the drivers not complying with the drivers’ hours rules.  Mr Backhouse submitted that it was inappropriate for the STC to use such a phrase as “hey-ho” in the context of a public inquiry;

c)    Purported confusion in the STC’s questioning of WM about whether he would be “pulling Jamie’s strings in the background” if she were to allow the operator’s licence to continue.  The confusion was caused by the STC’s comments to Mr Culpin and Mr Sasse in the middle of the questioning about a “very interesting case ... from the Upper Tribunal called Bradley” which was on point.  Mr Backhouse submitted that this confused approach to the questioning of WM gave a bad impression;

d)    Whilst continuing the questioning of WM about his potential or likely role in the company in the future and in relation to his assertion that he had transferred the operation of the company to JM in January 2014, the STC asked “So, basically you dumped it all on your son?”  Mr Backhouse described this question as being “rude”.  This negative view of WM was threaded through the STC’s approach;

e)    The STC did not mention and failed to appreciate that there was uncontested and objective evidence of drivers’ hours compliance in December 2013 in the form of TE Russell’s follow up report which was marked “mostly satisfactory”.

 

Mr Backhouse confirmed that he was alleging bias or the perception of bias in the STC’s approach to WM.  He referred the Tribunal to the Court of Appeal decision Re S-W (Children) (2015) EWCA Civ 27 paragraphs 20, 43-49 which repeats the fundamental principles that justice must be seen to be done and that a judge must not approach a case with a closed mind.  He accepted that the allegation was not set out in the Grounds of Appeal in terms although paragraph 35 did allege that the STC “comprehensively failed to look positively at the case with a view to exercising the purposive powers that she has .. that she had already decided that, perhaps even at the time of the driver conduct element of the proceedings, the Appellants were never going to recover from a culture of non-compliance”. Mr Backhouse accepted that the failure to allege bias in terms in his Grounds of Appeal meant that the procedure set out in the Tribunal decision Appeal 2004/426 EA Scaffolding & Systems Ltd & others had not been followed and the STC had not had an opportunity to provide an affidavit and neither had other evidence been obtained from others present at the public inquiry.  However, the Tribunal should allow the appeal on his first point concerning the cross examination of Mr Foy in any event and remit the matter as the STC’s findings of whether Transfreeze could be trusted (the Priority Freight question) depended upon her findings that drivers’ hours non-compliance was either condoned or encouraged by WM, who was not in any event, the company.  Alternatively, if the Tribunal considered that the allegation of bias was tenable then it must be explored further by following the EA Scaffolding procedure. 

 

44.         The final “minor” point submitted by Mr Backhouse was that the STC was critical of the failure of JM and WM to attend the public inquiry with the full forward planner, driver defect reports and the Warning Book.  Mr Backhouse submitted that the STC does not have any power to require the production of documents although he accepted that once the DVSA has produced evidence of regulatory non-compliance there is an evidential burden on operators to produce evidence to explain the DVSA evidence and to show that they had been and/or were compliant as at the date of the public inquiry.  Mr Backhouse’s objection was however to do with the STC’s description of JM as having “deliberately withheld” evidence.

 

45.         We are satisfied that the allegation of bias or the perception of bias is untenable.  Public inquiries are hearings conducted by statutory regulators whose functions are to ensure road safety, fair competition and compliance.  The hearings are by necessity inquisitorial and one of the functions of TCs is to probe and test the evidence put forward by an operator.  The approach of TC’s must be robust in those circumstances and it may be that those operators who have no previous experience or understanding of the public inquiry process may feel that they are the object of robust, unfair and intrusive scrutiny. That perception may be exacerbated when the evidence of operators and witnesses are provided in witness statement form so that the first experience they have of being questioned in a public inquiry is by the TC who is in effect cross examining the witness.  A complaint that an operator or witness has been the victim of robust questioning on matters which they have themselves raised in their case summaries, witness statements, documents or evidence is not sufficient to form the basis of an allegation that a TC has been biased or appears to have been biased against them.  Something more needs to be established than a robust approach. 

 

46.         There is no doubt that the STC uses language which is always straightforward and sometimes inappropriate for use in a regulatory or judicial forum.  It may be that she uses such language in a misconceived or misguided attempt to appear to be approaching the issues in a hearing in a “down to earth” fashion which she perceives to be appropriate for the senior regulator of the commercial road transport industry.  Whatever her reasoning, her language and phraseology can give rise to complaints that she is trivialising the issues and the evidence.   We do not however consider that such complaints can be made in this case.  Our response to the individual complaints made by Mr Backhouse are as follows:

 

a)    The STC’s attitude to WM in relation to his role as carer for his father: we repeat paragraph 42 above;

b)    Sarcasm: the STC used the phrase “hey ho” in an entirely appropriate context.  WM seemed unconcerned about the fact that Transfreeze, on his evidence, had been without a Transport Manager from January 2014.  The STC was characterising his attitude to the serious absence of a Transport Manager by use of the term;

c)    Confused questioning: we do not agree that the passage referred to by Mr Backhouse can be categorised as “confused”.  Public inquiries can be relatively unstructured at times and can involve a number of witnesses having an input at the same time.  For the STC to remind the legal representatives that there was an important and recent case on the issue of shadow directors was neither confused nor demonstrative of the STC being biased;

d)    The phrase “so you dumped it on your son” is not judicial or appropriate language for the STC to use (although it might have been if she had stated that she was using a colloquial expression).  However, on its own, the phrase does not show a perception of bias or that she had prejudged matters;

e)    Her failure to mention the “mostly satisfactory” marking of the follow up investigation of TE Russell does not assist the Appellants.  The STC concentrated on the most recent AIM reports and they demonstrated continuing and significant non-compliance in relation to drivers’ hours and records and the Warnings Book did not represent any effective disciplinary process. 

 

In short, we are not satisfied that any of the matters raised in this appeal would cause a fair-minded and informed observer, having considered the facts, to conclude that there was a real possibility that the STC was biased (as per the test set out in Porter v Magill (2001) UKHL 67.

 

47. As for Mr Backhouse’s final point about the STC’s finding that JM had deliberately withheld evidence from the STC, we agree that the STC may have gone too far.  His failure to produce documents demonstrated that he had failed to properly read the call up letter; had failed to properly prepare himself for the public inquiry and despite holding himself out as the person discharging the responsibilities of a Transport Manager at date of the public inquiry, he had failed to consider the latest AIM infringement reports when he ought to have known that the STC would want to see them.  The Warning Book was present at the hearing as were the driver defect reports and the AIM reports.  His failure to volunteer those items demonstrated a lack of pro-activity on his part but we would not go so far as to say the documents were deliberately withheld by him.  Our view of JM’s failings in this regard does not however have a material effect in relation to the overall case. 

 

48. Mr Backhouse also made general submissions to us about the balancing exercise and the STC’s findings concerning WM (and we agree with the STC that WM was the “brains” of the company). We are satisfied that neither the law or the facts of this case impel us to come to a different view to that of the STC as per the test in Bradley Fold Travel Ltd & Peter Wright v Secretary of State for Transport (2010) EWCA Civ 695. Having found that WM had lost his good repute (on his own admission) the STC was right to be concerned about the role that WM would have in the company if the licence were to continue.  It was clear that WM continued to have an important and continuing role in the control of the company and we have in mind JM’s own evidence about this.  But further, it was he, not JM who arranged for a new Transport Manager to agree to be nominated two weeks prior to the public inquiry.  It is striking that JM who on the evidence of WM and JM was then in control of operations, did not even take part in the meeting with Mr Bradshaw or make any effort to sit down and talk to him about his intended role and functions.  That alone demonstrates that WM continued to have a significant role in the weeks leading up to the public inquiry.  It will be for JM to satisfy the STC that he can operate a compliant company without his father having any input and further satisfy her that he has recognised the error of his ways in being untruthful in relation to a very straightforward matter during the hearing.  If he can do that, then he may satisfy the STC that without the influence of his father, he can be considered to be of good repute and be permitted to operate vehicles in the near future.

 

49. The appeals are dismissed with effect from 23.59 on 28 May 2015.

 

50. Postscript: we were concerned by the length of time that it took for the STC to publish her decision as a result of pressure of work.  As the STC has observed, reasons for decisions should be issued within twenty eight days.  That deadline should be complied with by all Traffic Commissioners as long delays will have the effect of undermining the integrity of the regulatory process.

 

 

[image removed]

 

 

Her Honour Judge J Beech

7 May 2015