Neutral Citation Number: [2015] UKUT 279 (AAC) Appeal No.  T/2014/74

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

 

ON APPEAL from the DECISION of Simon Evans DEPUTY TRAFFIC COMMISSIONER for the North West of England

Dated 6 October 2014

 

 

 

Before:

Kenneth Mullan Judge of the Upper Tribunal

Mr S. James Member of the Upper Tribunal

Mr A. Guest Member of the Upper Tribunal

 

 

Appellant:

T.H. Smith & Sons Ltd

 

 

 

 

Attendances:

For the Appellant: The Appellant was not present or represented

 

 

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

Date of hearing: 16 March 2015

Date of decision: 21 May 2015

 

 

 

 

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that this appeal be DISMISSED.

 

SUBJECT MATTER:- None

 

 

CASES REFERRED TO:- None

 

 

 

 

REASONS FOR DECISION

 

The decision under appeal to the Upper Tribunal

1.         This is an appeal from the decision of the Deputy Traffic Commissioner for the North West of England dated 6 October 2014.

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

(i)               T.H. Smith & Sons Ltd is the holder of a restricted goods vehicle operator’s licence for three vehicles and one trailer. The original licence was granted by the Deputy Traffic Commissioner at a preliminary hearing on 11 June 2013 and then on an interim basis.

(ii)              The sole director of the company is Ms Mary Smith.

(iii)             The licence had been granted subject to the following undertakings:

                                          i.    The nominated vehicles will have (or will have had) an up to date preventative maintenance check carried out during June 2013, before they may be brought into operation under the licence;

                                         ii.    There shall be an undertaking that Thomas smith shall play no role whatsoever in the operator’s business either in its management or in the day to day operation of it;

                                        iii.    There shall be conducted an audit of maintenance systems, maintenance documentation and vehicle inspections by a transport consultancy of repute or a trade association in the last two weeks of December 2013. That audit report will be forwarded to this traffic office together with proposals to implement any recommendations made, by 15^th January 2014.  

(iv)            The licence was made final on 18 March 2014.

(v)             The calling-in to Public Inquiry at the time of the original application had been necessary because of concerns about the links between the Appellant and the revoked licence for Thomas Smith, Mary smith’s husband. Mr Smith’s sole trader licence had been revoked by the Traffic Commissioner at a hearing on 14 December 2012. Revocation had resulted from concerns about the fitness of vehicles, overall compliance with the licence and that Mr Smith sought deliberately to mislead the Traffic Commissioner by concealing serious convictions. In addition there had been an incident on a motorway when Mr Smith had placed the public at risk by reason of the condition of his load, a position compounded by his conduct towards police officers at the scene.

(vi)            Mr Smith had been made subject to a disqualification for a period of five years from holding or obtaining an operator’s licence because of the circumstances set out above and a finding that he had obtained the original licence by a deception.

(vii)           Mr Smith was subsequently sentenced to a term of imprisonment for four years and ten months for theft, handling and making threats to kill.

(viii)          The Public Inquiry which gave rise to the decision under appeal was called to consider matters which related, principally, to an investigation by a Traffic Examiner in November 2013 and a subsequent maintenance inspection in January 2014. The regime for the maintenance of vehicles, the management of drivers, the issue of prohibitions, compliance with undertakings and appropriate systems were also relevant. The calling-in letter referred to the belief that there had been a material change in the circumstances of the operator related to both fitness and the sufficiency of financial resources. Further issues raised had related to non-payment of fees, following the final grant of the licence in March 2014.

(ix)            A background to the Public Inquiry is set out by the Deputy Traffic Commissioner at paragraphs 10 to 18 of his written decision. 

(x)             A summary of the written evidence submitted in connection with the second Public Inquiry is set out by the Deputy Traffic Commissioner at paragraph 19 of his written decision. A summary of the relevant oral evidence is set out at paragraphs 21 to 35.

3.         On 6 October 2014 the Deputy Traffic Commissioner made a decision to the following effect:

‘(a) In respect of the licence of T H Smith & Sons Ltd, I revoke the licence in accordance with those paragraphs of section 26(1) of the Act referred to above;

(b) I have determined that this direction for revocation will take effect after a short period that will serve the purpose of allowing the director of the company to close down this aspect of the business in an orderly fashion. Such are my concerns for road safety in the use of vehicles and fair competition that these objectives outweigh the convenience of the operator and the needs and expectations of customers. The revocation will take effect on 27^th October 2014 at 23.59 hours.

(c) Mrs Mary Smith is disqualified from holding or obtaining an operator’s licence or being a director of a company holding such a licence for 3 years.

4.         The Appellant was notified of the decision of 6 October 2014 by way of correspondence dated 6 October 2014.

The initial application for a stay

5.         On 29 October 2014 correspondence was received in the Office of the Traffic Commissioner for the North West of England from the appellant, in which she indicated that an appeal had been prepared and would be sent away. The appellant requested a stay of the Deputy Traffic Commissioner's decision. The appellant indicated that it was her belief that she did not have to apply for a stay until such time as the appeal had been submitted but she now noted that the licence had been revoked on 27 October 2014. The appellant set out the grounds on which the stay had been requested.

6.         In a decision dated 1 November 2014, the Deputy Traffic Commissioner refused the application by the appellant for a stay. A copy of the decision is to be found at pages 319 to 322 of the appeal bundle. The appellant was notified of the refusal of the application for a stay on 3 November 2014.

 

 

The appeal to the Upper Tribunal

7.         On 3 November 2014, an appeal dated 29 October 2014, was received in the office of the Upper Tribunal. The grounds of appeal are to be found at pages 330 to 332 of the appeal bundle and are as follows:.

‘Ground one asserts that the Deputy Traffic Commissioner relied too heavily on the possibility that the appellant's husband would influence the way in which the appellant operated. The appellant's husband held an operator’s licence but it was revoked in December 2012 because of concerns about the fitness of the authorised vehicles, overall compliance with the terms of the licence and concealment of his convictions. The appellant's husband was disqualified from holding or obtaining an operator’s licence for five years.

Ground two asserts that the Deputy Traffic Commissioner ‘overly penalised’ the appellant for the 14 day period during which the vehicles were uninsured given the genuine reasons for a momentary though significant lapse.

Ground three asserts that the Deputy Traffic Commissioner failed to give sufficient credit for the fact that there had been no adverse findings following the defects found in 2013.

Ground four asserts that a driver defect reporting process and a process to ensure compliance with drivers’ hours was in place and effective and that a rogue driver was no longer employed.

Ground five asserts that a minimum of £6500 is held in the appellant's business account and the account is maintained at that level.

Ground six asserts that the criticisms of the appellant's failure to attend the Public Inquiry and the conclusions drawn as a result were unfair. On 15 December 2014 an appeal to the Upper Tribunal was received in the office of the Upper Tribunal.’

 

The further application for a stay

8.         At page 333 the appellant has indicated that an application has been made to the Traffic Commissioner for a stay of his decision. The appellant also indicated that she wished to renew an application for a stay before the Upper Tribunal in the event of a Traffic Commissioner refusing the initial application for a stay.

9.         On 13 November 2014 Upper Tribunal Judge Michael Brodrick refused the renewed application for a stay. A copy of the relevant decision is to be found at pages 347 to 354 of the appeal bundle.

10.      The appellant was notified of the decision to refuse the renewed application for a stay by way of correspondence dated 13 November 2014.

 

The reasoning of the Deputy Traffic Commissioner

11.      The reasoning of the Deputy Traffic Commissioner was set out under the heading ‘Relevant considerations and findings re breaches of the legislation’ at paragraphs 39 to 49, as follows:

‘39. On the basis of the findings made I am satisfied that there are grounds for making a direction against the licence under section 26(1)(c)(iii), (f) and (h) of the Act.

40. This is a case in which it is clear that the administrative systems and practices to support compliant operation of vehicles under the licence have proved to be wholly inadequate. The evidence of both DVSA staff and that from Mr Swindell himself pointed to a company director in Mrs Smith utterly ill-equipped for the task of being the operator of this restricted licence. As he had stated, she buried her head in the sand and there had been a time when the post was simply not opened and dealt with as it ought to have been. This licence is simply untenable at this time.

41 I agree with the contention of Mr Swindell that Mrs Smith's failures have not been born of "malice" but such a finding provides precious little comfort in a business that is dependent on the attention of operators to a regime of careful compliance with expectations for the operation of vehicles, so that the public can be appropriately safeguarded. The failures here are long-standing, criminal in nature (though no convictions have been recorded) and when there has been an opportunity to react appropriately following contact first with the TE and then the VE, that opportunity to obtain immediate professional support and advice was not taken. The assistance of Mr Swindell, welcome though it is, has come far too late in the day and in any event whilst he appears to be experienced professionally in business terms, his expertise in the operation of heavy goods vehicles would appear to be limited.

42. There is of course no absolute requirement that a director appear before a traffic commissioner when called to do so, and I cannot compel attendance. The law however requires that I consider the operator as I now find it. Mr Swindell has been able to provide me with information and details of how he has been working to resolve the chaotic situation he found, when he arrived some 6 to 9 weeks ago. It is however patently the case that the absence of Mrs Smith has meant that the task of making an assessment of what was going on in the period before Mr Swindell’s arrival and why it happened and addressing what might be the position now and into the future has been made more complex by her absence. Where limited companies with sole directors hold licences, they are the guiding mind behind activity, they set the culture of the organisation, describe how it will operate and provide the leadership to others. Mrs Smith's absence has done nothing to assist me in a consideration of whether she is any better able to act as the overall manager of this business going forward, than she has shown to date. She has not shown commitment to the licence and her decision not to attend is judged by me to be misguided and consistent only with the evidence of disorganisation and mismanagement that had been evident in this case. There has been a singular failure of this company to respond to calls and correspondence issued by the DVSA officers in the manner that might be expected that gives me little hope for a future of compliance, despite the presence of Mr Swindell.

43. Determining whether this operator is fit is closely concerned with my view about the capability and competence of Mrs Smith, and as a result, the confidence which I can have in the company, as represented in the actions of its director. It is now clear to me that no one in the business has any real expertise in the running of a transport operation or the handling of drivers. Whilst undertakings had been signed up to there was only limited and general evidence of a commitment to comply with them.

44. Turning to the context for this consideration, namely the findings of the TE and VE, I judge that there is no real understanding of the very significant failures that are implicit in the running of vehicles without insurance, the drivers’ hours’ breaches and the lack of any checking of what is happening on the ground: this is significantly concerning. Having vehicles that are at all times taxed and insured is one of the most basic tasks of any operator yet it has been failed here.

45. In conducting the balancing exercise required, I set against these adverse matters the openness and honest commitment of Mr Swindell to assist Mrs Smith to operate compliantly as well as the steps taken, such as they are, to seek to secure compliance with licence requirements. I take account of the positive aspects of maintenance arrangements the timely inspections and that some drivers who were not fully compliant have left.

46. The relevant authority when questions that relate to whether an operator should be allowed to remain in the business are live and thus fall for consideration are contained in the relevant case law is contained in the [sic] Priority Freight (2009/225) decision. This authority enjoins me to ask myself the preliminary question as to how likely it is that this operator will, in future, operate in compliance with the operator's licensing regime?

47. Addressing myself to that question concerned with the likelihood of compliance, I record that I am not satisfied that I can answer affirmatively to that question with any confidence at all. The financial standing requirement is not presently met and it is not known when it will be. There is no active bank account in the company name. I have concerns that some of the issues that have arisen, for example the non-payment of the fees have relevance to the underlying financial difficulties. Mrs Smith has shown very limited commitment to this business and I am being asked to place much faith in Mr Swindell when he is neither a director nor shareholder in the business. There have been defaults and offences of the most serious nature that have been likely to allow the operator a competitive advantage that it is not entitled to.

48. Taking account of all those matters, on balance, I conclude this operator is unfit and incapable of compliant operation. When I ask myself the supplementary question is it right that this operator be put out of the business in which it has operated, I conclude without further question that the answer is yes: the needs of road safety, the integrity of the licensing regime and fair competition in the business are such that the conclusion I have reached is an entirely proportionate one.

49. I have gone on to consider whether it is appropriate that I disqualify Mrs Smith from holding or obtaining an operator's licence. I conclude for all the reasons given and my findings that she is simply incapable of the task, that such a course is entirely proportionate with my findings and judge that a period of three years represents a suitable period of disqualification.’

Our analysis

12.      We have no hesitation in upholding the decisions of the Deputy Traffic Commissioner.

 

13.      In NT/2013/52 & 53 Fergal Hughes v DOENI & Perry McKee Homes Ltd v DOENI, the Upper Tribunal said the following, at paragraph 8 of its decision, on the proper approach on appeal to the Upper Tribunal:

‘There is a right of appeal to the Upper Tribunal against decisions by the Head of the TRU in the circumstances set out in s. 35 of the 2010 Act.  Leave to appeal is not required.  At the hearing of an appeal the Tribunal is entitled to hear and determine matters of both fact and law.  However it is important to remember that the appeal is not the equivalent of a Crown Court hearing an appeal against conviction from a Magistrates Court, where the case, effectively, begins all over again.  Instead an appeal hearing will take the form of a review of the material placed before the Head of the TRU, together with a transcript of any public inquiry, which has taken place.  For a detailed explanation of the role of the Tribunal when hearing this type of appeal see paragraphs 34-40 of the decision of the Court of Appeal (Civil Division) in Bradley Fold Travel Ltd & Peter Wright v Secretary of State for Transport [2010] EWCA Civ 695.  Two other points emerge from these paragraphs.  First, the Appellant assumes the burden of showing that the decision under appeal is wrong.  Second, in order to succeed the Appellant must show that: “the process of reasoning and the application of the relevant law require the Tribunal to adopt a different view”.  The Tribunal sometimes uses the expression “plainly wrong” as a shorthand description of this test.’

14.      The Upper Tribunal In NT/2013/52 & 53 Fergal Hughes v DOENI & Perry McKee Homes Ltd v DOENI was considering an appeal to the Upper Tribunal against a decision of the Head of the Traffic Regulation Unit under the Goods Vehicles (Licensing of Operators) Act (Northern Ireland) 2010. There is no doubt, however, that the principles set out by the Upper Tribunal in paragraph 8, are derived from parallel appeals, such as the one in the instant case, where the appeal is against a decision of a Traffic Commissioner under the Goods Vehicles (Licensing of Operators) Act 1995 and Regulations made under that Act – see paragraph 4 of NT/2013/52 & 53 Fergal Hughes v DOENI & Perry McKee Homes Ltd v DOENI.

15.      We have not been satisfied that on the basis of the submissions which have been made by the Appellant that it could be said that the decision of the Traffic Commissioner in the instant case was ‘plainly wrong’.

16.      We turn to the individual grounds of appeal. As noted above, the first ground asserted that the Deputy Traffic Commissioner relied too heavily on the possibility that Thomas Smith would influence the manner in which the Appellant operated. In paragraphs 4 to 7 of his written decision the Deputy Traffic Commissioner makes reference to the Appellant’s husband and the regulatory action and criminal proceedings which were brought against him. This was all in the context of providing a background to the first Public Inquiry. We find no error in the approach of the Deputy Traffic Commissioner. More significantly, in assessing the position at the time of the second Public Inquiry, there is no reference to the Appellant’s husband. He is not referred to in the findings set out in paragraph 38. The Deputy Traffic Commissioner does not mention the possibility of him having an influence over the Appellant when carrying out the necessary balancing exercise. Finally, that possibility played no part in the Deputy Traffic Commissioner’s decision to revoke the licence. Accordingly, we cannot agree that the decision of the Deputy Traffic Commissioner is in error of law on the basis of this submitted ground.

17.      In the second ground of appeal, the Appellant asserts that the company was ‘over-penalised’ for a failure to have insurance cover for a fourteen day period when the failure was based on a momentary although significant lapse. There had been no re-occurrence of this failure. It is clear that the Deputy Traffic Commissioner undertook a rigorous and rational assessment of all of the evidence before him. He gave a sufficient explanation of his assessment of the evidence, explaining why he took the particular view of the evidence which he did. He had the advantage of seeing and hearing from the witnesses. The Deputy Traffic Commissioner made sufficient findings of fact, relevant to his decision, all of which are wholly sustainable on the evidence, and all of which are supported by relevant evidence. It is clear that an appeal on a question of law should not be permitted to become a re-hearing or further assessment of the evidence, when that assessment has already been fully and thoroughly undertaken. In any event, the uninsured use of vehicles was one of several factors which the Deputy Traffic Commissioner took into account in arriving at his decision that Mrs Smith was unfit to hold an operator’s licence and was not decisive of that determination. Accordingly, this ground of appeal cannot succeed.

18.      The third ground of appeal asserts that the Deputy Traffic Commissioner gave no credit for the fact that there had been no adverse findings since those discovered in 2013 and that a ‘positive’ VOSA report to that effect had been made available to the Deputy Traffic Commissioner. For the reasons which we have given in paragraph 17 in connection with the second ground of appeal we also reject this ground of appeal. The weight to be given to any evidence was completely a matter for the Deputy Traffic Commissioner.

19.      In the fourth ground of appeal, the Appellant asserts that a driver defect reporting process and a process to ensure compliance with drivers’ hours was in place and was effective. In addition an unreliable and ‘wilful’ driver was no longer employed by the Appellant. Two matters arise in connection with this ground. The Appellant has not indicated the date from which these changes took effect. If they took effect after the date of the determination under appeal, then the Upper Tribunal cannot take them into account – see paragraph 17(3) of Schedule 4 to the Transport Act 1985. If the Appellant is asserting that the changes were introduced before the date of the determination under appeal then that assertion runs contrary to the evidence which was before the Deputy Traffic Commissioner – see paragraphs 21, 32 and 33 of his decision.

20.      The fifth ground of appeal related to financial standing. It is unclear what point is being made and whether this was the position before the date of the determination under appeal or afterwards. If the Appellant is asserting that there has been a change and that there is now funding available to meet the financial requirement then, for the reasons which are set out in paragraph 19, that evidence cannot be taken into account. In any event, the finding on financial standing in paragraph 38 was clear and unequivocal. It was supported by the available evidence summarised in paragraphs 25 and 27 to 29 of the decision of the Deputy Traffic Commissioner. The Deputy Traffic Commissioner was also clear that it was not possible to say with certainty when the financial requirements would be met.

21.      The sixth ground asserts that criticism was made of the Appellant for failing to attend the second Public Inquiry on 24 September 2014. Mrs Smith’s understanding of the outcome of the adjourned Public Inquiry on 1 September 2014 was that the Deputy Traffic Commissioner wanted ‘… either me to attend in person or “someone with knowledge and full authority of the company’s affairs such as to speak on behalf of the company”’. It was unfair to place so much weight on her failure to attend as she was given the choice as to whether to attend or not. Further, her non-attendance ‘… should not reflect on her capability or capacity to operate an operator’s licence effectively and within the regulations.’ She had genuine reasons for not attending. The Deputy Traffic Commissioner gave written reasons for the adjourned Public Inquiry. In our view these written reasons are clear as to the expectation that Mrs Smith would attend the further Public Inquiry, the importance of her attendance and that it was only if, for good reason that she was unable to attend that he required the attendance of someone with authority to speak on her behalf. His purpose was to avoid the possibility of a further adjournment which would not be in the Appellant’s interest. The transcript of the proceedings of the Public Inquiry held on 24 September 2014 shows that Mr Swindell indicated that the Appellant was not ill and that ‘… she would rather be working.’ Further, he indicated that she had made a ‘conscious choice’ not to attend.

22.      The final ground asserts that the fee for the operator’s licence had been paid in ‘good faith upon request and within deadline imposed.’ The Appellant submitted that her only error was not to check whether the cheque had been presented and cleared. She assumed that it had and had no reason to think otherwise. The fact that the fee had been unpaid for a period for five months was a factor which the Deputy Traffic Commissioner took into account. At paragraph 47 of his decision the Deputy Traffic Commissioner linked the non-payment of the fees to the underlying financial difficulties. Once again this is a question of the weight to be attached to a particular piece of evidence which is a matter for assessment by the Deputy Traffic Commissioner. To repeat what was said above, an appeal on a question of law should not be permitted to become a re-hearing or further assessment of the evidence, when that assessment has already been fully and thoroughly undertaken. The decision of the Deputy Traffic Commissioner is not in error of law on the basis of this submitted ground.

23.      We are also wholly satisfied that the decision of the Deputy traffic Commissioner to revoke the Appellant’s licence and to disqualify Mrs Mary Smith was correct. 

 

Disposal

 

24.      The decision of the Deputy Traffic Commissioner dated 6 October 2014 is confirmed in all respects.

 

 

 

 

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Kenneth Mullan, Judge of the Upper Tribunal,

21 May 2015