Appeal for PSV Licence Rejected Due to Independent Audit Requirement

1

IN THE UPPER TRIBUNAL Appeal No. UA-2021-000565-T ADMINISTRATIVE APPEALS CHAMBER

On appeal from the Decision of [NAME] dated 13th December 2021

[NAME] trading as [NAME]: Her Honour Judge Beech Upper Tribunal Judge

Specialist Member of the Upper Tribunal [NAME] Member of the Upper Tribunal [NAME]

Hearing date: 12th July 2022

Representation: Appellant: [redacted] his appeal in his absence

DECISION

The appeal is DISMISSED

Subject Matter: The giving of an undertaking as a prerequisite to the grant of an [NAME]’s licence

Cases referred to: [NAME] & [NAME] v Secretary of State for Transport (2010) EWCA Civ.695.

REASONS FOR DECISION

1. This is an appeal from the decision of the [NAME] (“[NAME]”) dated 13th December 2021 when she granted the Appellant’s application for a standard national PSV licence for 8 vehicles under s.14 of the Public Service Vehicles Act 1981 (“the Act”) subject to him giving the following undertaking:

[NAME] no: UA-2021-000565-T

2 “The [NAME] will arrange an independent audit to be carried out by the [NAME] or other suitable independent body, by 13 September 2022. The audit will assess the systems for complying with maintenance and drivers (sic) hours requirements, and the effectiveness with which those systems are implemented. The audit should cover at least the applicable elements in the attached annex. A copy of the audit report, together with the [NAME]’s detailed proposals for implementing the report’s recommendations, must be sent to the Swyddfa Comisiynydd Traffig Cymru/Office of the [NAME] at Caernarfon within 14 days of the date the [NAME] receives it from the auditor”.

Background 2. The background to this appeal can be found in the appeal bundle and is as follows. The Appellant (“[NAME]”) has a long history of PSV operation either as an [NAME], Transport Manager or as a Consultant. To illustrate the point, [NAME] was involved in the following Transport Tribunal/Upper Tribunal appeals: • 2003/254 [NAME] trading as [NAME] ([NAME] provided management services) • 2004/330 [COMPANY] ([NAME] was a Consultant and gave evidence for the company) • 2005/301 & 2005/327 [COMPANY] and [NAME] trading as [COMPANY] ([NAME] was transport manager for both licences and was a sole trader operating the latter) • 2006/482 [NAME] trading as [NAME] ([NAME] provided management services and gave evidence for his wife and himself) • 2008/470 [COMPANY] ([NAME] was the managing director and the transport manager) • T/2011/28 Heart of Wales Bus & Coach Company Limited & [NAME] ([NAME] was the sole director and transport manager) [NAME] has not been directly involved in the operation of PSV vehicles since December 2012 when the licence of [COMPANY] trading as [NAME] was surrendered although [NAME] did make an application for a PSV licence in his own name in May 2013 which was eventually refused on the papers on 7th May 2015 upon the basis that [NAME]’ conduct with regard to the application was deemed to be frivolous and unreasonable under Regulation 6 of the Public Service Vehicles (Operators’ Licences) Regulations 1995.

3. By an application uploaded on 13th July 2021, [NAME] applied for a standard national PSV licence authorising eight vehicles. He applied as a sole trader trading as [NAME] was also the nominated transport manager.

4. The application attracted a statutory objection from the Rhondda Cynon Taf Borough Council (“[NAME]”). However, [NAME] determined that all of the matters

[NAME] no: UA-2021-000565-T

3 of concern raised in the [NAME] letter related to [NAME]’ operation of or involvement with the entities set out in paragraph 2 above and all such matters which pre-dated the last Upper Tribunal decision (T/2011/28) would not form part of the evidence before her. The letter calling [NAME] to the public inquiry conveyed [NAME]’s decision and her reasons.

5. The public inquiry took place on 7th December 2021. [NAME] attended and represented himself. He had submitted two skeleton arguments which were difficult to follow; they confused the roles of [NAME] and [NAME]; the points made were largely irrelevant to the issue of whether [NAME] should be granted a PSV licence. He also filed two lever arch files of documents (which we do not appear to have). [NAME] of [NAME] attended as an observer only although he was able to confirm that [NAME] had granted [NAME] a private hire vehicle licence (“PHV”) in September 2021. 6. [NAME] was keen to ventilate a number of irrelevant issues during the course of the hearing, including the [NAME] objection letter and the practical difficulties he said he was encountering in progressing towards the operation of private hire vehicles, [NAME] refused to give [NAME] an opportunity to do so. 7. [NAME] at the outset confirmed that she was satisfied with financial standing. She then guided [NAME] through his evidence which went to the statutory requirements set out in s.14ZA&C of the Act. With regard to maintenance, [NAME] noted that there was little by way of information in [NAME]’ hearing bundle regarding that issue. In particular, there was no maintenance contract, only a letter from the proposed maintenance provider confirming that the company would be responsible for the first use checks of all [NAME]’ vehicles and would also be responsible for all of the maintenance inspections. A wall chart would be provided to [NAME] showing six weekly preventative maintenance inspections with a full brake test on each inspection. [NAME] explained that the provider was long established with modern facilities, including a new rolling road. The Head Fitter appeared “very confident” and [NAME] had known the Managing Director for fifteen years. The provider was “quite capable of doing the work”. [NAME] had provided to them a copy of the daily check sheet and inspection sheet. He did not want to sign a contract with a provider without knowing whether he was going to be granted a licence ([NAME] explained the practice of providing a sample contract). He confirmed that the provider had a covered pit and headlight alignment equipment and that the company was also an MOT provider and would be used by him to undertake pre-MOT inspections although he would expect Mercedes Benz to undertake any remedial work as all the vehicles he proposed to operate would be new with three year warranties. [NAME] had not asked the company what their first time MOT pass rate was. However, all of the staff were appropriately qualified, and the provider was only two miles away from the operating centre. At the conclusion of the hearing, [NAME] made it clear that she was not going to “issue” her decision that day. We take that to mean that she was reserving her decision.

8. By an email dated 8th December 2021, the Office of the Traffic Commissioner (“[NAME]”) informed [NAME] that [NAME] had considered his evidence and submissions and the steps he had taken to update his knowledge. The email continued:

[NAME] no: UA-2021-000565-T

4 “Due to past compliance and application history and length of time out of the industry the Traffic Commissioner wishes to request your agreement to an undertaking to have an independent systems compliance audit in 9 months time.” The proposed undertaking was in the same terms as that set out in paragraph 1 above. [NAME] was requested to respond by 15th December 2021.

9. By an email dated 8th December 2021, [NAME] responded as follows: “In view of the attached confirmation of grant of [NAME] licence following yesterday’s hearing I have confirmed the actions of the [NAME]. with a caveat the outstanding issues which failed to receive full debate and consideration may be referred to the transport tribunal as best practice. I’ve thanked the [NAME]. for her consideration and decision which now allows me the opportunity to ensure the transport needs of the public and safety are my first priority ..” The email was followed by another on 9th December 2021 in which [NAME] confirmed that he had agreed to the giving of the undertaking.

10. On 13th December 2021, [NAME] published her written decision. Her reasons for granting the decision were as follows: “5. On the basis of the evidence presented to me, I consider that the applicant is in a position to run his operation compliantly. [NAME] has taken steps to update his knowledge, including attendance at a transport manager refresher training course and at several driver CPC training modules. He acknowledged that he learned a lot during that process and that things had moved on since he last operated.

6. It will, of course, be for [NAME] to demonstrate that he can work with the regulator upon grant of this licence. Due to his past compliance and application history and length of time out of the industry, in correspondence following the hearing, I requested his agreement to an undertaking to have an independent systems compliance audit in 9 months’ time. [NAME] agreed to that undertaking in the terms set out at page 1 of this Decision.

7.

Accordingly, I find that the requirements of sections 14ZA and 14ZC of the Act are satisfied and grant this application with the audit undertaking agreed to by [NAME] and as specified on page 1 of this Decision.”

The Appeal 11. By a Notice of Appeal received on 23rd December 2021, [NAME] appealed the decision of [NAME]. In section A entitled “Type of Case”, [NAME] stated: “I wish to appeal the conduct of the hearing as this was unsatisfactory and the undertakings attached to the licence which we believe to be extreme. Also the number of vehicle licences is incorrect historically as vehicles registration in England and [NAME] licences were not included to give the total picture”.

12. In Section F entitled “Grounds of Appeal”, [NAME] contended that “the hearing became a farce” and set out six grounds which are difficult to decipher

[NAME] no: UA-2021-000565-T

5 and are without adequate or any explanation as to why they amount to valid grounds of appeal. We summarise them as follows:

1. Under public law, [NAME] believes that he should have been given an opportunity to answer the letter from the [NAME] in full, in addition to having produced a skeleton argument and having responded directly to the letter. What was the point of the public inquiry? 2. [NAME] provided to [NAME], two A4 binders of information and a skeleton argument. Not much of the latter was mentioned or questioned. Whilst the undertaking sought by [NAME] after the hearing was not “particularly onerous”, it may indicate that it followed a “meticulous public inquiry. Nothing could be further from the truth ..”. The request from the [NAME] for an undertaking less than 48 hours after the hearing “cannot be best practice” and indicated that [NAME] had not taken account of the details provided by [NAME] in his “legal statement”. Furthermore, the issue of eight seats was left to the discretion of [NAME], an issue which [NAME] had actively been involved with throughout the process. [NAME] said she did not recall the issue within the papers but it was there. “Due diligence should have ensured that this matter be cleared up”.

3. The name of a potential driver who holds a PHV licence has been given to the [NAME] but this has not been progressed. [NAME] of [NAME] attended the hearing but did not give evidence. Why was he there? Others should have been including others from the [NAME] and [NAME], the retired [NAME]. 4. “The issue of relevant conditions relates to fixed penalty notices without explaining the reasons why. This does not appear in the Senior Traffic Commissioners Report in any event and clarity is required”. 5. “To finalise matters the information regarding good repute, stable establishment and addresses have been noted as they were previously as were finalised prior to the inquiry”. 6. “Information about vehicles. Items A&B are simple common sense as pointed out in our documentation. To conclude item 7 refers to any material change of my circumstances. These are I find both the Traffic Commissioner and [NAME] to be dysfunctional in their correspondence e.g. director who attended did not even note this understudy had left [NAME] 6 months previously. The Traffic Commissioner failed initially to advise of new circumstances in registering a new interest in our letter of 10/6/21 there was over a month delay. They also sent documentation for the hearing which a HGV licence not PCV. The fact is that the Traffic Area Office could not provide an accurate map for the office in Pontypridd”. ([NAME] does not identify items A&B or item 7). [NAME] concluded that he wished these issues to be aired. He had accepted all conditions on the licence but he sought an indication that these are not required in law and that the actions of [NAME] in cherry picking correspondence was irrational and contrary to law.

13. By case management directions dated 13th December 2021, Upper Tribunal Judge Hemmingway advised [NAME] that the basis of his appeal was unclear; the Upper Tribunal would not carry out a general review of the public

[NAME] no: UA-2021-000565-T

6 inquiry unless it was relevant to the outcome; [NAME] appeared to be complaining about having given an undertaking to [NAME], which are or should be freely given; there was no right of appeal against the recording of an undertaking on a licence. [NAME] was asked to explain in writing why he was challenging the undertaking which he had given. [NAME]’ response can be summarised as follows: 1. a) due diligence – correspondence prior to the public inquiry was not considered in full, in particular between the [NAME] and [NAME]; b) original complaint documentation from [NAME] was answered in full but there was no opportunity to deal with it because of decision of [NAME] limiting the evidence to be heard; c) it will become abundantly clear from the transcript that justice was not employed.

2. The [NAME] correspondence was supplied to damage [NAME]’ reputation.

3. The reason for the appeal was that the issue of an undertaking was not raised during the hearing but after the event. It was a fait accompli.

4. The Act makes no reference to the imposition of “conditions” post a decision taken following a hearing. The undertaking was not freely given. [NAME] concluded by stating that he had worked on the premise that he would be questioned for five hours rather than an hour including breaks and there had been a lack of attention to the “8 seater licence contained within our proposed logistics” which was never addressed.

14. The appeal hearing was listed for 12th July 2022. On 11th July, [NAME] wrote to the Tribunal stating that he was unable to attend the hearing because of on- going health problems. He nevertheless requested that the Tribunal consider nine points set out in the letter which did not add to those already made by him in his Grounds of Appeal save that he asserted that [NAME] had refused to “take on board” the number of vehicles licences and depots [NAME] had previously had in the South East of England and he further asserted that he was still awaiting confirmation from [NAME] regarding the use of private hire vehicles on route services and that this was ignored despite [NAME] emphasising the same during the hearing. Discussion 15. The undertaking: Appeal 2008/470 [COMPANY] concerned a company in which [NAME] was the Managing Director and Transport Manager. Upon an application to increase its vehicle authorisation from one to twelve, [NAME], following a hearing and in a reserved decision, granted the variation subject to an undertaking being given that the company’s maintenance systems would be audited on a six-monthly basis. [NAME]’s reasoning for requiring such an undertaking was that he had concerns about unfair competition and road safety. [NAME]’ appeal against the requirement that he give that undertaking was dismissed. It follows that [NAME] is no stranger to the concept of undertakings being requested as a perquisite to the granting of an application after a hearing had taken place.

[NAME] no: UA-2021-000565-T

7 16. It is an established principle that [NAME] can request undertakings on a range of issues about which they have concern. Quite apart from undertakings relating to maintenance and systems compliance, other undertakings may include such matters as the provision of bank statements for a stated period following the grant of the licence. In this case, [NAME] took into consideration before requesting the undertaking, that [NAME] had a long regulatory history and that he had not been involved in the operation of PSVs since 2012. Those considerations were perfectly proper ones and justified the request for an undertaking, which on any view, was not particularly onerous and was entirely proportionate. It matters not whether the request for an undertaking was made during the course of a hearing or after [NAME] had risen to consider her decision. [NAME]’ assertion that the request for an undertaking was made after the decision to grant a licence had been made is inaccurate.

17. Undertakings are freely given. If an applicant refuses to give such an undertaking, then it is open for them to either request that the public inquiry be reconvened or appeal [NAME]’s decision that an undertaking is either unlawfully requested or unnecessary on the facts and out with the ambit of the wide discretion that [NAME] have. Such a request is not a fait accompli. But once the undertaking is given, as in this case, there can be no valid appeal upon the basis that it should not have been required at all.

For these reasons, there is no merit in [NAME]’ complaints about [NAME]’s decision to request the undertaking, which was then duly given.

18. Issues raised about eight-seater vehicles: [NAME] made an application for a standard national licence authorising eight vehicles. In his application he confirmed that he would be operating vehicles with nine or more passenger seats. He further confirmed that if he wished to operate vehicles with eight passenger seats or fewer under the PSV licence, he required the written agreement of [NAME] who may require “certain undertakings” to be given. The reason for this requirement arises from the definition of Public Service Vehicle set out in s.1 of the Act.

19. There is no evidence before us of an application made by [NAME] to [NAME] for her agreement that he be permitted to operate one or more eight-seater vehicles under a PSV licence although there are many emails sent by [NAME] to both the [NAME] and [NAME] making reference to an electric eight-seater private hire vehicle and to the failure of both the [NAME] and the [NAME] to give advice about the operation of an eight-seater vehicle. The requests for advice themselves are not within the bundle and such a request does not amount to an application to [NAME] for permission to operate one or more eight-seater vehicles.

20. There are also references to a failure on the part of the [NAME] and [NAME] in providing advice on the issue in [NAME]’ first skeleton argument. The operation of an eight-seater vehicle was also touched upon briefly in the public inquiry. [NAME] asked [NAME] about his PHV licence: “So, you’ve been granted that licence but you’re not yet operating those buses, is that right? To which [NAME] responded “Absolutely because you won’t let me. If you read your own brief, it says you won’t let me. Page 1, last line at the bottom of the page”. [NAME] understandably did not understand the reference. [NAME] then tried to find the relevant document but could not, despite a short adjournment. He then moved onto documents he described as invoices for

[NAME] no: UA-2021-000565-T

8 the vehicles he had ordered. Later on in the hearing, when [NAME] asked again why [NAME] was not operating two small buses under his PHV licence, he agreed that the reason was that he was still in discussions with [NAME] and he did not know whether he had a driver to drive them (also the fault of [NAME]).

21. The only references we can find to a prohibition against operating vehicles with eight or fewer seats under a PSV licence are in the application form and in the Applicant/Licence Details which appear at page 23 of the appeal bundle and which repeats the prohibition set out in the application form. It would appear that [NAME] has interpreted the prohibition to be an absolute one rather than subject to a formal application being made for written permission. If [NAME] wishes to operate an eight-seat vehicle under his PSV licence, he should make the application. We are satisfied that [NAME]’ complaints concerning the failure of [NAME] to address the issues raised in paragraphs 12.2, 13 and 14 above are without merit.

22. Conduct of the public inquiry and evidence considered: [NAME]’ criticisms of the way in which the public inquiry was conducted by [NAME] are wholly misconceived. It was for [NAME] to determine how the public inquiry was to proceed, the relevance of evidence to be heard and how that evidence was to be received. It was not for [NAME] to dictate to [NAME] (as he attempted to do) either how the hearing was to be conducted or the evidence and witnesses to be called by [NAME]. [NAME] was keen to use the hearing as a forum for him to air his complaints and grievances against [NAME] both with regard to the statutory objection letter (despite [NAME]’s ruling on the document) and how his application for his PHV licence was dealt with along with the subsequent grant of that licence, the complaints were irrelevant. [NAME] had properly exercised her case management functions in determining how the public inquiry was to be conducted. [NAME] had a difficult task in keeping [NAME]’ evidence and submissions confined to the relevant issues arising out of an application for a PSV licence and her conduct of the hearing was commendable. It follows that [NAME]’ complaints set out in paragraphs 12.2.1, 13(1) and 13.2 above are totally without merit.

23. Irrelevant issues raised on appeal: All of the remaining complaints made by [NAME] are irrelevant and/or nonsensical. By way of example, [NAME]’ complaint about the quality of the directions plan sent out by the [NAME]. It is beyond us how this could conceivably amount to a ground of appeal. Another example are his complaints about a driver not being approved by [NAME] which is irrelevant to the issue of whether [NAME] satisfied s.14ZA&C of the Act. We are not going to go through them all. Conclusion 24. There is no merit in this appeal whatsoever. It is now for [NAME] to comply with the undertaking he has given if he has not already done so. The final paragraph of his letter received by the Tribunal on 11th July 2022, thanked the Tribunal for our time and understanding and concluded: “with a small fleet, my knowledge and experience “simply the best, better than all the rest”. We trust that the audit, which is due by 13th September 2021, will indeed demonstrate that the description that [NAME] applies to himself is apt.

[NAME] no: UA-2021-000565-T

9 25. In all the circumstances we are not satisfied that [NAME]’s decision was plainly wrong in any respect and neither the facts nor the law applicable in this case should impel the Tribunal to allow this appeal as per the test in [NAME] & [NAME] v Secretary of State for Transport (2010) EWCA Civ.695. The appeal is dismissed.

Her Honour Judge Beech

Judge of the Upper Tribunal

18th July 2022