Upper Tribunal Allows Appeal Against Transport Manager Disqualification Order

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NCN: [2021] UKUT 0229 (AAC) IN THE UPPER TRIBUNAL Appeal No. T/2021/20 ADMINISTRATIVE APPEALS CHAMBER TRAFFIC COMMISSIONER APPEALS

ON APPEAL from the DECISION of the DEPUTY TRAFFIC COMMISSIONER FOR THE SOUTH EASTERN AND METROPOLITAN TRAFFIC AREA

Dated: 17 February 2021

Before:

[NAME]

Judge of the Upper Tribunal [NAME]

Member of the Upper Tribunal Mr.D.[NAME]

Member of the Upper Tribunal

Appellant:

[redacted]

For the Appellant:

[redacted]

26 August 2021 Date of Decision:

8 September 2021

DECISION OF THE UPPER TRIBUNAL

The appeal is allowed. To the extent only that it relates to the loss of repute of the Appellant and/or to her disqualification from acting as a transport manager, the decision dated 17 February 2021 by the Deputy Traffic Commissioner is quashed and the matter (to that extent) is remitted to the same Deputy Traffic Commissioner to be considered afresh in the light of this decision. In the event that that Deputy Traffic Commissioner is unable to consider the matter afresh within a reasonable time, the fresh consideration shall be undertaken by such Traffic Commissioner or Deputy Traffic Commissioner as the Senior Traffic Commissioner may appoint.

Subject Matter

Transport manager; loss of repute; fronting; proportionality; adequacy of reasons.

Cases referred to:

2002/1 [COMPANY] (No.1) [NAME] 2005/367

[NAME] No. T/2021/20

2 [NAME] and [NAME] [2010] UKUT 397 (AAC) [COMPANY] T/2012/71 [NAME] t/a [NAME]/2016/03

REASONS FOR DECISION

Introduction

1. On 9 February 2021 the Deputy Traffic Commissioner (“DTC”) held a public inquiry in relation to [COMPANY] (“the operator”). At that time, the sole director of that company was one [NAME] and its transport manager the present appellant, [NAME].

2. By his decision of 17 February 2021, the DTC found that the operator had lost repute and its licence was revoked. He disqualified [NAME] from holding or obtaining an operator’s licence for a two year period and made a direction under section 28(4) of the Goods Vehicles (Licensing of Operators) Act 1995 (“the 1995 Act”) that would render vulnerable any licence held by a company or partnership in which [NAME] had a sufficient interest during the period of his disqualification. He further found that [NAME] had lost repute and was to be disqualified from holding the role of transport manager for an indefinite period.

3. In barest summary, the DTC found that [NAME] was a director in name only and was a front for someone else. The DTC did not specify for whom, but identified three possible candidates, including [NAME]. He held that his findings went to the core of the relationship of trust that needs to exist between operators and the Traffic Commissioners, and that the operator deserved to be put out of business. He took into account in making a disqualification order and s.28(4) direction against [NAME] the actions of the latter when previously a director of another company, [COMPANY], as well as his findings in this case.

4. There has been no appeal by the operator or by [NAME].

5. It is also relevant to record that [NAME] had previously been refused a licence as director and traffic manager for [COMPANY] following a public inquiry held on 21 March 2017. The refusal was subsequently upheld by the Upper Tribunal. The concern was that there had been fronting because of links found to exist between [NAME] and one [NAME] who had been disqualified from holding an operator’s licence as a director and a transport manager for an indefinite period in 2014.

6. On 1 November 2017 a public inquiry was held (by the present DTC), approving the appointment of [NAME] as transport manager of the operator. At that time the director of the company was a [NAME]. The DTC had concluded that there was no evidence to suggest that [NAME] was other than a bona fide independent director of the operator. Subsequently, [NAME] resigned on 24 April 2018. [NAME] No. T/2021/20

3 [NAME] was appointed on 24 April 2018 and resigned on 1 March 2020. [NAME] was appointed on 1 November 2019.

7. [NAME] (see [5]) was at the time of the public inquiry a director of [COMPANY], whose address is the operating centre for the operator. Another director of [COMPANY] is a [NAME]. Between 23 June and 8 December 2020 [NAME] was the named Company Secretary of [COMPANY]. Her evidence to the public inquiry was that she had not been aware of this at the time.

The decision in relation to [NAME]

8. Only one of the 26 paragraphs of the DTC’s decision was devoted to his reasons in respect of [NAME]. It read:

“In relation to [NAME] I find that whilst she seems to have carried out her

transport manager role to an acceptable level in respect of compliance I am

bound to conclude that she was party to the situation pertaining to [NAME]

and either colluded with others in what occurred or did nothing to prevent it.

In either case this is unacceptable and consequently I order the loss of her

repute as a transport manager. Once repute is lost, I am obliged to order a

disqualification from acting as a transport manager and so order for an

indefinite period.”

Grounds of appeal

9. [NAME] appeals on the following grounds:

[NAME]: the DTC gave inadequate reasons for the decision to remove repute and to disqualify for an indefinite period; and

Ground B: the disqualification imposed on [NAME] is both disproportionate to that imposed on [NAME] and “externally” disproportionate (by which we understand “to the circumstances of the case”).

The Relevant Legislative Provisions

10. Paragraph 1 of schedule 3 to the 1995 Act provides:

“(1) In determining whether an individual is of good repute, a traffic

commissioner may have regard to any matter but shall, in particular, have

regard to—

(a) any relevant convictions of the individual or of his servants or agents; and

(b) any other information in his possession which appears to him to relate to

the individual's fitness to hold a licence.

(2) In determining whether a company is of good repute, a traffic

commissioner shall have regard to all the material evidence including, in

particular—

[NAME] No. T/2021/20

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(a) any relevant convictions of the company or of any of its officers, servants

or agents; and

(b) any other information in his possession as to the previous conduct of—

(i) any of the company's officers, servants or agents, or

(ii) any of its directors, in whatever capacity,

if that conduct appears to him to relate to the company's fitness to hold a

licence.

(3) [not relevant].”

11. Para 16 provides:

“(1) In proceedings under this Act or the 2009 Regulation for determining

whether a person who is a transport manager is of good repute or

professionally competent, a traffic commissioner must consider whether a

finding that the person was no longer of good repute or (as the case may be)

professionally competent would constitute a disproportionate response.

(2) If the commissioner determines that the person is no longer of good

repute or (as the case may be) professionally competent, the commissioner

must order the person to be disqualified (either indefinitely or for such period

as the commissioner thinks fit) from acting as a transport manager.

(3)-(6): [not relevant].”

12. Para 17 provides:

“(1) A traffic commissioner may, subject to sub-paragraph (2), at any time

cancel a disqualification order made under paragraph 16(2) or, with the

consent of the disqualified person, vary the order.

(2) The traffic commissioner by whom a disqualification order is made under

paragraph 16(2) may specify measures with which the disqualified person

must comply before the order can be cancelled or varied.

(3)-(7): [not relevant].” Consideration of submissions 13. [NAME] invited us to approach [NAME] in the light of the principles helpfully drawn together by the Upper Tribunal in T/2016/03 [NAME] t/a [NAME] analogy with para 7(ii) of [NAME], the DTC had not identified the issues properly raised, had not indicated which of those issues, if any, were made out and which were not, and had failed to identify any matters which weighed upon his decision. As in [NAME] (at para 7(iv), in the absence of an adequate fact-finding exercise it was almost impossible to determine whether the DTC had correctly applied the law. He invites us to conclude that, as in 2002/1 [COMPANY] (No.1) (cited in [NAME] at [15]) it was incumbent on the DTC to make an assessment of whether there was any evidence of instruction, encouragement or acquiescence on the part of [NAME] in relation to the DTC’s unchallenged findings concerning [NAME]’s

[NAME] No. T/2021/20

5 actions and inactions and that he failed to do so. Similarly, he ought to have considered the weight to be given to [NAME]’s general record, performance, reputation and enforcement history, but there is no indication that he did so. 14. As was pithily summarised in [NAME] and [NAME] [2010] UKUT 397 (AAC)

“Not only is the operator entitled to see what the Traffic Commissioner had in

mind when reaching a decision, it is also important for the Upper Tribunal to

be able to do so, if the decision is appealed. There is, clearly, no need to set

out those trivial factors that could have no influence on the decision either on

their own or in combination with other matters. And, as the tribunal has

repeatedly recognised, a Traffic Commissioner cannot be expected to balance

one factor against another with the precision of a set of scales. But the Traffic

Commissioner should set out the basis on which the decision has been

reached with sufficient clarity and detail to enable others to see the rationale

and justification for the decision. In short, reasons have to be adequate and

intelligible.”

15. [NAME] speaks of there being no challenge to [NAME]’s evidence on various matters. The public inquiry is not a court hearing. While the [NAME] must act fairly, he receives the evidence and then reaches his conclusions, without there necessarily being another party to challenge a particular piece of evidence.

16. Nonetheless, we agree that this ground succeeds. We can well understand that the DTC found aspects of the background concerning, in that both [NAME] and [NAME] had previously been involved in fronting. Despite that, [NAME] had been permitted to become the transport manager when [NAME] was the director and appears then to have functioned in that role until [NAME] resigned and subsequently when [NAME] was the director without any recorded concerns. Further, as the DTC’s reasons acknowledged, when [NAME] was named as the director, [NAME] was handling the compliance aspect of the role apparently competently. So what was it that made a loss of repute proportionate (as, under para 16 of schedule 3, it has to be)? What had [NAME] done (or not done)? What did the DTC make of her record, performance, reputation and enforcement history? The lack of findings of fact and reasoning means that the reader of the decision, even when para 26 is read together with the previous paragraphs which largely focus on [NAME], is left with nothing more than the DTC’s feeling that she must, somehow, have been involved.

17. [NAME] submits that it was not good enough that the DTC could not specify for whom the operation was being fronted. We can see that it might have made the giving of reasons easier had he been able to do so. However, we do not think that that is essential: without limitation, the nature and extent of [NAME]’s duties for the operator, whether as transport manager or otherwise, the quality of her relationships with others involved and her own material circumstances might also be relevant in that regard.

18. Turning to Ground B, although expressed in the terms at [9], it turned into a second challenge based on a lack of any, or any adequate, reasons on the basis

[NAME] No. T/2021/20

6 that, given that lack, the proportionate nature of an indefinite period of disqualification could not be demonstrated. The Senior Traffic Commissioner’s Statutory Document No.10, while pointing out that every case must be considered on its merits, suggests for the consideration of Traffic Commissioners that:

“Serious cases, where, for example, the operator deliberately puts life at risk

and/or knowingly operates unsafe vehicles or allows drivers to falsify records,

may merit disqualification of between 5 to 10 years or in certain cases for an

indefinite period.”

19. The same document advises at [104] that “in all cases, the Traffic Commissioner should provide cogent reasons for the length of disqualification imposed or varied.”

20. [NAME] notes that in T/2012/71 Silvertree Transport Ltd [2013] UKUT 117(AAC), the power to disqualify was described as “Draconian” and we note that the same para 104 of the Statutory Document suggests that disqualification for an indefinite period will not normally be reviewed until 5 years of the disqualification have elapsed.

21. [NAME] accepts that fronting may be “serious” but submits there are no findings of fact and no balancing of considerations to support the imposition of the sanction.

22. As to the disproportionality in comparison with the sanction imposed on [NAME] submits that the situation is analogous to that in T/2015/367 [NAME], where one partner was disqualified for 5 years whilst his business partner was disqualified for only 2. At [4], HHJ Brodrick characterised as “obviously unsatisfactory” the failure by the Traffic Commissioner to give reasons for his orders of disqualification and in particular for the distinction made between the partners. To the point that [NAME] as director of the operator and [NAME] as transport manager were not in a similar role, he submits that the distinction is not a material one, in that loss of repute (and so, by extension, disqualification) as a transport manager would additionally affect [NAME]’s ability to apply for an operator’s licence in her own right, were she to wish to do so.

23. We accept [NAME]’s submissions on Ground B also and cannot usefully add to what is said above.

Remedy

24. On remedy, [NAME] would prefer us to quash the decision to remove repute and the disqualification would fall with that. He submits that [NAME] has already had to bear having been disqualified from acting as transport manager since February 2021, albeit, in response to our questioning, it became clear that she has retained employment with the operator, as a secretary, on furlough. As a fall-back position, he submits that we should quash the relevant parts of the DTC’s decision and remit it to the same DTC, recognising the difficulty in a different Traffic Commissioner obtaining evidence afresh when [NAME] is no longer active in proceedings.

[NAME] No. T/2021/20

7 25. We prefer the latter course. As we indicated at [16], we can understand that from the history of the matter the DTC may have had some concerns. Implementing our decision to quash the relevant parts of the decision essentially for inadequacy of reasoning will require the DTC adequately to articulate and justify such concerns, if any, as he may have and to show how the legislation and caselaw is applied to them.

[NAME] Judge of the Upper Tribunal

Mr S. [NAME] Member of the Upper Tribunal

[NAME] Member of the Upper Tribunal

(Signed on original) Date: 8 September 2021