Upper Tribunal Allows Appeal Against Traffic Commissioner's Decision

OUTCOME: Allowed

IN THE UPPER TRIBUNAL Appeal No. UA-2024-000189-T ADMINISTRATIVE APPEALS CHAMBER (TRAFFIC COMMISSIONER APPEALS) [2024] UKUT 398 (AAC)

ON APPEAL from A DECISION of the TRAFFIC COMMISSIONER for the West Midlands Traffic Area

Before: Zachary Citron: Judge of the Upper Tribunal [NAME]: Member of the Upper Tribunal

[NAME]: Member of the Upper Tribunal

Appellants: [redacted] For the appellant: [redacted] Heard: at Birmingham Civil Justice Centre On: 10 October 2024

Date of decision: 4 December 2024

DECISION OF THE UPPER TRIBUNAL

The appeal is allowed.

The decision of the Traffic Commissioner of 17 January 2024 to revoke [COMPANY] operating licence, and to disqualify both it and Miss [NAME], is set aside.

The matter (of whether [COMPANY] licence should be revoked, and whether it, and/or Miss [NAME], should be disqualified) is remitted to a different Traffic Commissioner to rehear (at a public inquiry) and determine.

Subject matter

Revocation of licence Disqualification Procedural irregularity; rules of natural justice

Cases referred to

[COMPANY] & anor v Secretary of State for [NAME] [2010] EWCA Civ 695 [COMPANY] v [NAME] of Environment Northern Ireland [2014] UKUT 0346 (AAC) Serafin v Malkiewicz [2020] UKSC 23

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[2024] UKUT 398 (AAC)

REASONS FOR THE DECISION

The decision appealed against

1. In what follows, (unless the context otherwise indicates) references to “sections” (or “s”) or “Schedules” are to sections of, or schedules to, the Goods Vehicles (Licensing of Operators) Act 1995.

2. The appellants appealed to the Upper Tribunal against a decision of a deputy Traffic Commissioner (the “[NAME]”) dated 17 January 2024, following a public inquiry on 11 January 2024. The decision

(a) revoked the licence of [COMPANY] under s27(1), upon losing good repute and failing to demonstrate professional competence (we note that s27(1)(a) requires a [NAME] to direct revocation of a licence where the licence- holder no longer satisfies a requirement of s13A, or a [NAME] manager no longer satisfies certain requirements in paragraph 14A of Schedule 3); the decision cited both s13A (sub-section (2)(b) of which requires the applicant to be of good repute) and paragraph 14A of Schedule 3 (which, amongst other things, requires that a [NAME] manager be professionally competent)

(b) disqualified both appellants under s28 from holding or obtaining an [NAME]’s licence for a period of 12 months (we note that under s28(1), the [NAME] had the power to disqualify [COMPANY], as the holder of the licence that had been revoked, and that under s28(5), the [NAME] had the power to disqualify Miss [NAME], as a director of [COMPANY])

(c) ordered that the above take effect from 00.01 on 1 February 2024.

The [NAME]’s written decision

3. The “background” section of the [NAME]’s written decision included the following:

(a) [COMPANY] held a standard [NAME]’s licence to operate one vehicle and one trailer. Miss [NAME] was its sole director. She was, effectively, the [NAME]

(b) The licence was granted on 7 November 2021. At the time, [NAME] was the nominated [NAME] manager. He resigned in November 2022. In January 2023, after a period of grace, [NAME] [NAME] (“Mr [NAME]”) was appointed [NAME] manager

(c) In May 2023 [COMPANY] applied to increase authorisation from one to four vehicles. It was informed (by the Office of the [NAME] (“OTC”)) that its bank statements showed insufficient funds to support the application

(d) On 27 June 2023, OTC granted [COMPANY] a “time limited interim” licence for four vehicles; there was a signed commitment by [NAME]

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[2024] UKUT 398 (AAC) [COMPANY] and Miss [NAME] to supply financial information to support the four- vehicle authorisation, by 26 September 2023

(e) On 1 August 2023 [COMPANY] withdrew its variation application via OTC’s on-line system

(f) On 5 October 2023 OTC wrote to [COMPANY] referring to the withdrawn variation application and stating that the [NAME] found “no persuasive reason to reinstate” the application or to “grant any type of interim licence” given [COMPANY] lack of financial standing and evidence of its having been “operating without a licence, due to the [COMPANY] ceasing to exist when the variation application was withdrawn”. The letter noted “no genuine link” between [COMPANY] and Mr [NAME], its [NAME] manager. It said that the [NAME] had decided to convene a public inquiry to consider “your repute and professional competence”

(g) On 24 October 2023 a vehicle operated on behalf of [COMPANY] was stopped by DVSA. The vehicle was not displaying an [NAME]’s licence and was not specified on any [NAME]'s licence. The driver “admitted” that a second vehicle was in use and that the two vehicles had been used from August through to the stop date

(h) Mr [NAME] resigned as [COMPANY] [NAME] manager in late October. [COMPANY] said that [COMPANY] had been engaged to provide compliance and support, based on which OTC granted a "period of grace”

(i) Miss [NAME] was interviewed under caution on 22 November 2023

(j) [COMPANY] was called to public inquiry by letter of 4 December 2023, as a result of “unauthorised vehicle use” and “in the absence of professional competence”; [COMPANY] and [NAME] were also called in respect of good repute under s13A

(k) On 24 December 2023 OTC received notification from [NAME] that they had “withdrawn their support on failing to get the ‘level of commitment from [NAME] [NAME] that we require, especially in light of the considerable amount of work that was required’.”

4. The [NAME]’s written decision included the following under the heading “The public inquiry”:

(a) Miss [COUNSEL] attended the public inquiry, represented by a solicitor

(b) Mr [COUNSEL] attended the public inquiry “to answer the call-up letter issued in respect of his good repute as a [NAME] manager”

(c) The [NAME] stated that prior to the hearing, he received maintenance and driver defect documentation from [COMPANY] and financial statements, as well as a statement from Miss [NAME]

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[2024] UKUT 398 (AAC)

(d) Paragraph 17 of the written decision stated: “Mr [NAME] produced compliance documents from his time as [NAME] manager and a statement dated 26 October 2023 explaining the reasons for his resignation”

(e) The [NAME] stated that he heard evidence from Miss [COUNSEL] and Mr [COUNSEL], and representations from the solicitor acting for the appellants.

5. The [NAME]’s written decision made findings in the section headed “Findings on the evidence”, including the following:

(a) [COMPANY] knew that it was not authorised to use a certain vehicle (“Vehicle X”) on 24 October 2023; that vehicle had been used in August, September and October without being specified on [COMPANY] licence; Miss [NAME] initial statement in the interview that the use of that vehicle was to cover another vehicle (“Vehicle Y”) being “not on the road” was patently untrue;

(b) Miss [NAME] was not honest with the DVSA traffic examiner in the interview on 22 November 2023. She stated that only one vehicle was in use on the 24 October 2023 despite the driver admitting that Vehicle Y was in use on that date and ANPR evidence confirming its use on numerous dates in October;

(c) OTC’s record clearly showed a “digital fingerprint” for every password controlled entry and stated that the withdrawal of [COMPANY] variation application was done by Miss [NAME] on 1 August 2023 at 21.56. It was Miss [NAME] who withdrew the application online on this date;

(d) Miss [NAME] commitments as a single parent and a full-time social worker left the [NAME] in considerable doubt as to her ability to run a [NAME] operation of any size, let alone the applied-for number of 4 vehicles. Miss [NAME] evidence at the public inquiry gave the [NAME] no reassurance; Miss [NAME] continued reliance on consultant [NAME] managers, whose role tends to be reactive rather than proactive, left the [NAME] in grave doubt as to who, if anybody, was providing day to day management and control over drivers and their working activities;

(e) Three of the four drivers engaged by [COMPANY] were “self employed contractor/limited companies”. This failed to provide sufficient control over the drivers’ activities and was anti-competitive. It was symptomatic of the absence of control over drivers. Work schedules appeared to be wholly determined by Amazon; vehicles were out working day and night; drivers were rarely seen at the operating centre;

(f) Paragraphs 29 to 32 of the [NAME]’s written decision, within this section, read as follows:

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[2024] UKUT 398 (AAC) 29.Mr [NAME] testified to his difficulties in engaging with drivers and with the [NAME] working full time in a demanding role as a social worker, initially spending 2 days a week in Devon and 3 days working from home and then working full time for the Local Council in the Midlands, it would appear that the majority of the drivers worked autonomously and without adequate control by the [NAME].

30.I found the evidence of Mr [NAME] credible and concerning in terms of the [NAME]/director’s unwillingness to listen to sensible professional advice or to implement compliance systems.. He advised the [NAME] that she had insufficient funds to support the variation application and that she should proceed incrementally in increasing authorisation. He stated that Mrs [NAME] ignored this advice because she wanted to avoid the cost of repeated applications, an unwise saving. He also stated that she “disregarded the strict requirements set out in the conditions of the interim licence and also my very firm instructions upon her receiving the interim licence”.

31.In the relatively short time since this licence was granted, the [NAME] has had two [NAME] managers resign and one [NAME] consultancy withdraw their services. Mr [NAME] described [Miss [NAME]] in January 2023 as “missing the very basic requirements of an [NAME]”. He doubted the account given by the [NAME] that his predecessor had left for “personal related reasons”. He stated in his evidence that he regretted his involvement and he appreciated that he put his own repute at risk by being on the licence.

32.Mr [NAME], in his letter to the OTC dated 26th October 2023, doubts whether the [NAME] understands the “seriousness and the severity of the conditions which we as operators have to abide by”. This is borne out by my observation of the [NAME] and consideration of the paperwork forming part of this public inquiry. I do not doubt Mr [NAME] evidence that the [NAME] lied to him about the operation of unauthorised vehicles.

(g) [NAME]’ withdrawal and their difficulties in getting the “level of commitment from [NAME] [NAME] that we require”, spoke volumes for [COMPANY] approach to compliance and the level of trust that can be placed in Miss [NAME]. It was also significant that the visit from [NAME] identified a “considerable amount of work that was required” and a “general lack of action in carrying out activities that had been previously requested”;

(h) There were clear and obvious deficiencies in [COMPANY] maintenance documentation.

6. The final section of the [NAME]’s written decision, headed “Considerations and decision”, included the following:

(a) The [NAME] placed [COMPANY] conduct in the ‘severe’ category: “deliberate or reckless act(s) that compromised road safety and/or gave the [NAME] a clear commercial advantage and/or any attempt by the [NAME] to conceal offences or failings”:

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[2024] UKUT 398 (AAC) i. The use of unauthorised vehicles was deliberate and contrary to a clear OTC direction

ii. Miss [NAME] lied to DVSA examiners in interview: she initially stated “it was only the one vehicle” used; she then stated: “our granted interim licence is valid for up to 6 months from June 2023” (whereas the OTC letter of 5 October 2024 “made it clear that the interim authority had ended”

iii. The [NAME] founded that the positive features (listed at paragraph 39) were far outweighed by the negative events in the case:

(a) [COMPANY] had flouted restrictions on number of vehicles it was allowed to operate despite “clear instructions from OTC and firm advice from [its] [NAME] manager that mandatory financial standing was lacking”

(b) False responses to DVSA in formal interview under caution, as regards believing that interim authority existed in late October 2023

(c) Miss [NAME] statement and evidence gave the [NAME] no basis for trusting her to run a compliant licence in the future

(d) [NAME] managers had been unable to secure a genuine and sustained commitment to compliance; the [NAME] firmly believed that [COMPANY] would continue to place commercial expediency above legal compliance

iv. The conduct was such that [COMPANY] should be put out of business; the [NAME] did not trust [COMPANY] to be compliant in the future; [COMPANY] had gained an unfair commercial advantage over compliant competitors; road safety was compromised by failures to manage drivers on a day to day basis; that had not been done in the past

v. [COMPANY] had lost good repute under s27; it was necessary and appropriate to revoke its licence

vi. [COMPANY] had breached the undertaking, and requirement under s6, not to use more than the authorised number of vehicles; the [NAME] revoked its licence under s26(1)(f) in addition

vii. The [NAME] refused to extend the “period of grace” for operating with a [NAME] manager; the [NAME] consequently revoked [COMPANY] licence under s27(1) for lack of mandatory professional competence, per paragraph 14A of Schedule 3

viii. The [NAME] considered it necessary to disqualify [COMPANY] and Miss [NAME] for 12 months, under s28

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[2024] UKUT 398 (AAC)

ix. Mr [NAME] was formally warned regarding his good repute. The [NAME] took into account his relative inexperience as a [NAME] manager and Mr [NAME] recognition that any future engagements must demonstrate far greater control and management. The [NAME] noted that Mr [NAME] involvement with [COMPANY] was relatively brief and that Mr [NAME] had given a full account of his own, and [COMPANY], failings.

Jurisdiction of the Upper Tribunal

7. The holder of an [NAME]'s licence may appeal to the Upper Tribunal against a direction given under section 26(1) or (2), or 27(1), in respect of the licence: s37(2).

8. The Upper Tribunal has jurisdiction to hear and determine all matters whether of fact or law for the purpose of the exercise of its functions under an enactment relating to [NAME]. It has the power to make such order as it thinks fit or, in a case where it considers it appropriate, to remit the matter to a [NAME] for rehearing and determination.

9. The Upper Tribunal may not take into consideration any circumstances which did not exist at the time of the determination which is the subject of the appeal.

10. The task for the Upper Tribunal on an appeal is to conclude whether or not, on objective grounds, a different view from that taken by the [NAME] is the right one or (meaning the same thing) whether reason and the law impel the Upper Tribunal to take a different view ([NAME] and anor v Secretary of State for [NAME] [2010] EWCA Civ 695 at [40]).

The Upper Tribunal proceedings in this case

11. We had before us a bundle of 772 pages (not including the (revised) grounds of appeal, which were expressed in a further 7 pages). About 400 of the 772 pages were the bundle prepared by OTC for the Upper Tribunal hearing: this included, amongst many other things, the call-up letters to the public inquiry, correspondence between the call-up letter and the public inquiry (“section B”) and a transcript of the public inquiry. The bundle before us also included a further 300 pages of documents submitted by the appellants, including 68 pages of “written submissions” dated 19 September 2024 and, on 26 September 2024, 200 or so pages of submissions and evidence. This included over 100 pages of “screenshot evidence” of messages between Miss [NAME] and Mr [NAME] between November 2022 and January 2024.

12. We are grateful to Mr [NAME] for his submissions and his assistance at the hearing in navigating the voluminous bundle.

The appellants’ grounds of appeal

13. The appellants’ (revised) grounds of appeal may be summarised as follows:

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[2024] UKUT 398 (AAC) (a) that the [NAME]’s decision dealt with evidence unfairly or irrationally, in particularly by relying on evidence of Mr [NAME], that was hostile to the appellants

(b) that there had been procedural unfairness in the proceedings before the [NAME]; in particular, that [NAME] was, at the public inquiry, unprepared for the hostility of the case against the appellants, in particular, the hostile evidence of Mr [NAME]; and that the [NAME] was biased and hostile, appearing to have made up his mind on the evidence prior to the hearing

(c) that it was wrong for the [NAME]’s decision to have found as a fact that Miss [NAME] (1) withdrew the application to vary [COMPANY] licence; and (2) was dishonest in the interview with DVSA

(d) that it was wrong for the [NAME]’s decision to have concluded that Miss [NAME] could not be trusted to run a compliant operation in the future.

The procedural fairness issue

14. It seems to us the most efficient way of dealing with this appeal is to consider, first, one aspect of the procedural unfairness ground. This requires us to summarise, in some detail, some particulars of the proceedings before the [NAME]. We will first do that, and then present our analysis of the procedural unfairness issue.

Summary of Mr [NAME] letters to OTC prior to the public inquiry

15. Section B of the bundle prepared by OTC for the Upper Tribunal hearing contains two letters from Mr [NAME] to the [NAME], neither of which were in the bundle for the public inquiry itself.

16. One letter, dated 26 October 2023 and at page 165-167 of the bundle prepared by OTC for the Upper Tribunal hearing (page 232-234 on the Upper Tribunal’s own pagination), included the following:

(a) The letter stated that about a month after Mr [NAME] was appointed, Miss [NAME] wanted to increase the authorisation to four vehicles – but, the letter states, after requesting financial information, Ms [NAME] “could see that [Miss [NAME]] was not in a position to apply for this increase”;

(b) The letter said that Mr [NAME] advised Miss [NAME] against making the application on three occasions, due to not having enough financial capital in the business; he did, however, advise that she increase to two, and increase a further one at a time thereafter;

(c) The letter said that in May 2023 Miss [NAME] “persisted” that the application had to be made; that Mr [NAME] still advised against applying for four vehicles; but “against [Mr [NAME]] advice” Miss [NAME] wanted to go ahead and apply for four trucks;

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[2024] UKUT 398 (AAC) (d) The letter said that, after the interim licence was granted to [COMPANY], Mr [NAME] was “very firm in [his] advice to [Miss [NAME]]” about maintaining funds in the account; that he was told by Miss [NAME], after a month, that “everything was in the green and on track”; that, a week before the deadline set by OTC for submitting financial statements, Mr [NAME] asked Miss [NAME] for these; when he saw them he “knew [his] instincts were right and that [NAME] had not maintained the required funds …”; that he expressed his concerns to Miss [NAME] “and asked why she had told [him] everything was fine financially, unfortunately likewise to previous occasions I could not get a straight answer from [Miss [NAME]] …”;

(e) The letter said that Mr [NAME] then “instructed” Miss [NAME] to write to OTC explaining the situation (as to the inadequacy of [COMPANY] funds);

(f) The letter then continued as follows:

“In the matter of honesty, at this point after 9 months of being on the licence and encountering a number of issues and problems with [Miss [NAME]] (which will be explained on separate documents prepared for public inquiry) I had decided I no longer wished to be [NAME] manager for [Miss [NAME]] due to the lack of honesty in communication and other factors.

My concerns were expressed to [Miss [NAME]] very firmly … I began to construct a letter of resignation of the licence to the [NAME] and to [[NAME]] when the following day I was by notified by [Miss [NAME]] of the [NAME] referring the case to a public inquiry.”

(g) The letter said that it was at this point that Mr [NAME] learned that the application to vary [COMPANY] licence had been withdrawn at the beginning of August; Mr [NAME] said he believed that Miss [NAME] had mistakenly done this but had not mentioned it; he commented that “this is the main issue which has persisted throughout my time on the licence, the seriousness and severity of the conditions which as operators we have to abide by, I believe [Miss [NAME]] sometimes struggles to understand these things”;

(h) The letter then explained why Mr [NAME] did not resign as [NAME] manager at that point and says that he “firmly instructed” [NAME] to adhere to the conditions of the licence;

(i) The letter then explains how it was that, after the incident on 24 October 2023 with one of [COMPANY] drivers being pulled over by DVSA, Mr [NAME] discovered that [COMPANY] was operating more than the one vehicle for which it was licenced. The letter then said this:

“It is here and now where I have decided to draw the line for giving [[NAME]] any further chances, she has lied to me about the number of vehicles she is operating, and not adhering to firm instructions from the [NAME] and from me on several occasions, this unfortunately is something I can no

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[2024] UKUT 398 (AAC) longer be part of, it is for this reason I have removed myself with immediate effect from being a [NAME] manager on [NAME] licence.

I will be attending the public inquiry to represent myself however I no longer wish to be associated with [NAME] as of this date [Miss [NAME]] is not being compliant …”

17. A further letter from Mr [NAME] to OTC was at page 193-196 of the bundle prepared by OTC for the Upper Tribunal hearing (page 260-263 on the Upper Tribunal’s own pagination) was undated but starts by hoping that the recipient had enjoyed her “festive holidays” and said that the letter was “in support of the evidence which has been submitted for the upcoming public inquiry on 11 January 2024” – it therefore seems the letter was written in late December 2023 or early January 2024. This letter included the following:

(a) The letter said that soon after becoming [NAME] manager of [COMPANY], Mr [NAME] came to the view that the previous [NAME] manager had not, contrary to what Miss [NAME] told him, left for personal reasons; rather, it was because, although Miss [NAME] “seemed to have the best intentions she seemed to be missing the very basic requirements of an [NAME], I struggled to make her understand these measures due what I can only describe as language barriers and the basic understanding of being an [NAME] however I persisted into the coming months to incorporate the basic infrastructure of a compliant [NAME] into [Miss [NAME]] and [NAME].”

(b) Mr [NAME] then described instances of him “chasing” Miss [NAME] for compliance and commented that “unfortunately, it seemed that consistently my firm words and instructions were falling on deaf ears and the [Miss [NAME]] simply did not understand the seriousness and requirements of being an [NAME]”;

(c) Later in the letter Mr [NAME] described Miss [NAME] “a lovely person just not knowledgeable at all …”;

(d) Describing the period leading up [COMPANY] application to vary its licence, Mr [NAME] said he had “initially refused twice” to make the application due to the funding position; he said Miss [NAME] “persisted” in making the application; Mr [NAME] said that, upon this happening, he had a meeting with Miss [NAME] “and explained that I will not be a part of her company going forward if she carried on operating in the way she way she was with the 1 truck which she had once the interim was granted for 4”; he said he was “assured that going forward all [his] instructions would be met specifically; Mr [NAME] then described in some detail his efforts to improve various aspects of compliance;

(e) The letter explained, in a similar manner to Mr [NAME] previous letter, how he discovered that [COMPANY] was operating more than the one vehicle for which it was authorised. The letter then said this:

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[2024] UKUT 398 (AAC) “ … I had given [[NAME]] a lot of help since joining [NAME] and I had accepted a lot of excuses while giving her too many chances to improve her operating methods and compliance, however this [operating more than one vehicle] was an outright refusal to follow instructions both from the [[NAME]] and myself and it is non-compliance that I could control or be a part of, although I was certain it would not shine a good light on my name removing myself off [NAME] licence with an upcoming PI, this is something I did not want to stain my name with, at every stage I believed [[NAME]] to be unknowledgeable about being an [NAME] and slightly ignorant to the facts, however she always had good intentions and appeared to by trying to improve her ways which is why I had remained with her as long as I had, however I had to draw the line when [Miss [NAME]] willingly and knowingly deceived myself and the [NAME] by operating more than 1 vehicle.

It is with regret that I did not remove myself from [NAME] in the first few months when I had concerns regarding [Miss [NAME]] understanding of compliance, however it was only with a good heart that I remained and I wished to help [Miss [NAME]] as she is a lovely individual and as a small haulage [NAME] myself, I gave her more chances than I should out of compassion and inexperience.

I look forward to discussing the above matters with you in further detail on the day of the public inquiry.”

Summary of the call up letter to [COMPANY]

18. We note the following from the “call up letter” to [COMPANY] of 4 December 2023:

(a) the issues of concern were listed as follows:

i. operating more vehicles than the maximum on the licence

ii. breach of conditions on the licence: failure to meet continuing and mandatory requirements; failure to notify events affecting good repute

iii. statements made when applying for the licence (re: notifying the [NAME] of convictions, changes to maintenance arrangements or financial status affecting the licence) not fulfilled;

iv. not honouring undertakings made when applying for the licence, re: informing the [NAME] of changes or convictions affecting the licence

v. material change in circumstances of [COMPANY]

vi. concern that [COMPANY] not being of appropriate financial standing

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[2024] UKUT 398 (AAC) vii. concern that [COMPANY] not meeting the requirement of being of good repute, or meeting the requirements for a [NAME] manager;

(b) the letter said that, in addition, the [NAME] was concerned that concern that [COMPANY] “nominated [NAME] manager”, Mr [NAME], may not be exercising continuous and effective management of the [NAME] activities of [COMPANY]. It said that a separate letter had been sent to Mr [NAME] to invite him to the public inquiry, which would also consider his competence and repute;

(c) under the heading “Evidence the [NAME] will consider”, the letter referred to [COMPANY] variation application and questions asked of it by “the central licencing office”; it also referred to the “Finance Time limited Interim” granted by the [NAME] and its requests; it then referred to Mr [NAME] not having logged in to his vehicle [NAME] licencing account since 29 November 2022, and that the [NAME] was seeking an explanation as to how Mr [NAME] exercised continuous and effecting management of [COMPANY] [NAME] activities; [COMPANY] was requested to bring its contract with Mr [NAME] and bank statements showing payments to him.

Public inquiry transcript

19. We note the following from the transcript of the public inquiry:

(a) In the introductory part of the hearing, the [NAME] said that he had received a “file” from Mr [NAME] “with regard to his role as [NAME] manager” and that the [NAME] proposed to “go through” that evidence with Mr [NAME] (top of page 336 of the Upper Tribunal bundle);

(b) After some preliminary questioning of Ms [NAME] about how many vehicles [COMPANY] had on the road at various times, the [NAME] said he was going to deal with the role of the [NAME] manager at the time (when one of [COMPANY] vehicles was pulled over by DVSA) (page 341);

(c) After questioning Mr [NAME] on his responsibility for compliance matters, the [NAME] turned to the “interim licence” and then asked: “And you said in your submission dated the 26th of October that you were surprised the interim was granted because of the issues with regard to finances. Is that right?” (page 342);

(d) Shortly afterwards, the [NAME] asked this: “And then you also say that you had been on the licence for nine months and there were a number of issues and problems in respect of your role as [NAME] manager. Tell me about the issues and problems that you had” (top of page 343);

(e) In response, Mr [NAME] referred, amongst other things, to “communications issues” with Miss [NAME]. In the course of questioning, one of the things Mr [NAME] said was that 4 October was the first he, or Miss [NAME], knew

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[2024] UKUT 398 (AAC) of the withdrawal of the application to vary [COMPANY] licence (see page 345);

(f) The [NAME] referred (again) to Mr [NAME] “statement” (bottom of page 346), referring specifically to Mr [NAME] stated belief that Miss [NAME] mistakenly withdrew the variation application and did not wish to mention that (top of page 347);

(g) Mr [NAME] “letter” is again referred to be the [NAME] (in respect to Mr [NAME] reasons for not immediately resigning as [NAME] management when he discovered that [COMPANY] was operating more than one vehicle) – page 348;

(h) Following the [NAME]’s questioning of Mr [COUNSEL], Miss [COUNSEL] solicitor was given the chance to ask Mr [COUNSEL] questions (page 349); as part of this, Mr [NAME] agreed that Miss [NAME] by and large followed Mr [NAME] advice, and had good intentions; and that Mr [NAME] did not see any “knowing wrongdoing” within [COMPANY]. The solicitor then said this (bottom of page 349):

“Thank you. That’s my cross examination, sir. It was just whether, because that’s the first we’ve heard of this evidence. I didn’t take any witness statement or anything, whether [Miss [NAME]] – do you, obviously there will be points you agree on there. Was there anything that you disagreed with fundamentally with what Mr [NAME] was saying?”

(i) Miss [NAME] then referred to some details of the compliance record; this moved to the [NAME] starting his own questioning of Miss [NAME] (page 350).

Our analysis of the procedural unfairness argument

20. In our view, the procedural unfairness argument in this appeal, most worthy of consideration, is the argument that, because Miss [NAME] was not informed of the content of Mr [NAME] two letters to the OTC prior to the public inquiry, either by being sent a copy of them in advance, or by having their substance be summarised as part of the issues presented in the call-up letter sent to [COMPANY], Miss [NAME] was not given a fair opportunity to gather and adduce evidence that might counter what Mr [NAME] said in those letters, or to cross- examine Mr [NAME] at the public inquiry on things said in those letters. To the extent that Mr [NAME], at the public inquiry, gave evidence matching what he said in those letters, the argument is that Miss [NAME] was “ambushed” by such evidence. To the extent the content of Mr [NAME] letters was not repeated at the public inquiry, but was relied on in the [NAME]’s decision, that was unfair to the appellants.

21. If authority were needed for the fairness principles underlying the argument as just set out, there are a number of cases set out in the Traffic Digest under Rules of Natural Justice; it may be worth quoting one of the more recent, and principles- based, articulations cited there - [2014] UKUT 0346 (AAC) [COMPANY] v [NAME] of Environment Northern Ireland, at [9]:

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[2024] UKUT 398 (AAC) This tribunal is moving away from long recitations of previous case law in favour of clear statements of the applicable principle. In this case, the principle is that so far as is reasonably possible, an [NAME] called up to a public inquiry should be told about all the material evidence that the decision-maker may reasonably consider to be relevant, and should be given an appropriate opportunity to consider, prepare and present a response to it - at a hearing, should they wish. If information that has a reasonable prospect of becoming relevant to the outcome becomes available at the last minute, it should be disclosed at the earliest opportunity, and time to consider it, or an adjournment, should be offered. This rule applies even if, in the event, the information does not attract adverse weight. If an [NAME] has been put on the back foot by the surprise production of new evidence part way through the hearing, an unfortunate sense of unfairness and injustice may arise – even if the information happens to be available, somewhere on the internet.

22. In regard to assessing the procedural unfairness argument as just summarised, the key questions in our view are:

(a) Was Miss [NAME] fairly made aware of the contents of Mr [NAME] letters to OTC, prior to the public inquiry?

(b) Did Mr [NAME] letters to OTC contain things (assertions, contentions, and the like) which Miss [NAME] could not, fairly and reasonably, have been expected to be prepared (without sight of the letters) to deal with at the public inquiry, via cross examination of Mr [NAME], her own evidence and submissions on her behalf? In other words, was the public inquiry “fair”, despite Miss [NAME] not having been made aware of the contents of Mr [NAME] letters to OTC in advance?

(c) Did the contents of Mr [NAME] letters to OTC make a difference to the outcome of the public inquiry? In other words, was the unfairness (if any) at the public inquiry material to the [NAME]’s decision?

First question: was Miss [NAME] fairly made aware of the contents of Mr [NAME] letters to OTC prior to the public inquiry?

23. We find the answer to this factual question to be “no”, given that Mr [NAME] letters to OTC were not in the bundle prepared by OTC for the public inquiry; and we see nothing else in the bundle prepared by OTC for this hearing, including in the transcript of the public inquiry, to suggest that they were sent to Miss [NAME]. Moreover, we see nothing in the call-up letter, or other communication to Miss [NAME] by OTC prior to the public inquiry, which disclosed the substantive content of Mr [NAME] letters.

Second question: fairness of Miss [NAME] not being made aware of the content of Mr [NAME] letters to OTC prior to public inquiry

24. On this question, it seems to us that Mr [NAME] detailed challenge to Miss [NAME] overall competence, and to her honesty on one or two key matters, in his letters to OTC, were not something Miss [NAME], fairly and reasonably, could have been expected (without sight of the letters) to deal with at the public inquiry. The contents of those letters painted a picture of, on the one hand, Mr

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[2024] UKUT 398 (AAC) [NAME] competence and whole-hearted attempts to bring Miss [NAME] to compliance, and, on the other, Miss [NAME] lack of competence, persistent resistance to Mr [NAME] sound advice, and, on one or two matters, outright dishonesty. In our view, in the circumstances, Miss [NAME] could not reasonably, and fairly, have been expected to be prepared, with no notice, to deal with these assertions, which would have involved gathering her thoughts, and memories, as to the episodes to which Mr [NAME] referred, assembling any contemporaneous documentary evidence she held in respect of them, and, with these “counter” materials, assisting her solicitor to prepare to cross examine Mr [COUNSEL] on his evidence. We do not accept that, just because Miss [NAME] knew that the public inquiry related to “good repute”, it was unnecessary for Miss [NAME] to be given notice of the detailed evidence provided by another person as to her lack of competence and, in one or two important matters, dishonesty.

25. Related to this, we are also persuaded that, had she known the contents of Mr [NAME] letters, Miss [NAME] would have gathered evidence in an attempt to counter significant aspects of what he asserted. We say this largely on the basis of over 100 pages of contemporaneous evidence of communications between Mr [NAME] and Miss [NAME] (prior to the public inquiry) produced by the appellants to the Upper Tribunal (pages 602 to 731 of our bundle): these are extensive and detailed and, without prejudging the issues, seem to us to offer reasonable scope for a portrayal of the facts that was, at a minimum, not as clear-cut or “black and white” as was portrayed in Mr [NAME] letters to OTC.

26. We therefore answer the second question, as we have posed it above, thus: it was unfair for the content of Mr [NAME] two letters to OTC not to have been disclosed to Miss [NAME] in advance of the public inquiry, to allow her a fair opportunity to prepare her case.

Third question: did the unfairness make a material difference?

27. On this question, it seems clear to us that the [NAME] did rely, materially, on the contents of Mr [NAME] letters, in reaching conclusions as to competency, honesty, and the “deliberate” nature of [COMPANY] infringement of its licence terms. This can be clearly seen at paragraphs 30-32 of the [NAME]’s written decision (quoted at [5f] above). [NAME]’s was not the only evidence as to these matters before the [NAME], by any means - but it was, at a minimum, importantly corroborative of other evidence; it is by no means clear that the [NAME] would have reached the same conclusions about competence, honesty, “deliberacy”, and repute, absent the contents of Mr [NAME] letters. The unfairness (in not fairly disclosing Mr [NAME] letters to OTC, to [NAME]) did therefore make a difference to the [NAME]’s decision that, under s27, he was required to direct that [COMPANY] licence be revoked.

28. We note, however, that the [NAME]’s decision also invokes s26(1)(f) as an additional reason for revoking the licence; that provision gives the [NAME] a power to revoke a licence where any undertaking recorded in the licence has not been fulfilled; in this case, it was the undertaking not to use more than the authorised number of vehicles. We note that s26 is a power (or a discretion) to revoke in certain circumstances, in contrast to s27, which imposes a requirement to revoke in certain circumstances. In our view, even though the contents of Mr [NAME] letters may not have made a

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[2024] UKUT 398 (AAC) difference to the [NAME]’s deciding that [COMPANY] had breached the undertaking about the number of vehicles it used, they did make a difference to the [NAME] deciding to exercise his discretion under s26 to revoke the licence. This is because, in exercising a discretion, a decision-maker has to take into account all relevant considerations: and there can be no doubt that the considerations about [NAME] competence and honesty, which in turn, as we have already found, materially relied on the contents of Mr [NAME] letters, were relevant considerations. Thus, in a slightly more indirect way, the content of Mr [NAME] letters made a difference to the [NAME]’s decision under s26(1)(f), as well as to his decision under s27.

Conclusion on procedural unfairness

29. We conclude that the aspect of the procedural unfairness argument, on which we have focused in our reasoning above, is made out: it was materially unfair for Miss [NAME] not to have been made aware of the contents of Mr [NAME] letters to OTC, prior to the public inquiry.

Disposal of the appeal

30. Given our conclusion above, the [NAME]’s decision was marred by a material legal error and so it is right that we set the decision aside. As Lord [NAME] is memorably recorded as having observed in the hearing of Serafin v Malkiewicz [2020] UKSC 23 (at [49]), “a judgment which results from an unfair trial is written in water.”

31. It follows that it is unnecessary for us to consider, and decide on, the other legal errors in the [NAME]’s decision alleged by the appellants; it suffices to say that the reason we considered one aspect of the appellants’ procedural unfairness argument first, is that it seemed to us the strongest of the appellants’ grounds, by some way.

32. Having set the [NAME]’s decision on revocation and disqualification aside, we are in no position to remake it: we had a half day hearing in which the focus was on whether the [NAME]’s decision was plainly wrong; to remake these decisions fairly and justly will involve hearing the oral evidence directly and making factual findings, based on all the evidence, necessary to resolve the matters at hand. A public hearing before a new [NAME] (to avoid any question of appearance of bias) seems to us the right forum to do this, in all the circumstances. We have therefore exercised our power to remit the matter to a new [NAME] for rehearing and determination.

33. For the avoidance of doubt,

(a) pending that rehearing and determination, the revocation of [COMPANY] licence, and disqualification of it and Miss [NAME], by the [NAME]’s decision of 17 January 2024, have no effect (as they have been set aside by this decision); and

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[2024] UKUT 398 (AAC) (b) the rehearing concerns matters affecting the appellants (as opposed to matters affecting Mr [NAME], who did not appeal the [NAME]’s 17 January 2024 decision so far as it related to him). Whether Mr [NAME] gives evidence at the rehearing is an entirely different question and one which we leave to the case management discretion of the new [NAME], fairly taking into account the views of the parties.

Zachary Citron Judge of the Upper Tribunal

[NAME] Member of the Upper Tribunal

[NAME] Member of the Upper Tribunal

Authorised for issue on 4 December 2024