Upper Tribunal Reduces Disqualification Period for Operator

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UKUT 0095 (AAC)

Appeal Nos. T/2015/53/75/76

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER TRAFFIC COMMISSIONER APPEALS

ON APPEAL from the DECISION of [NAME_1], Traffic Commissioner for London and the South East of England dated 13 August 2015

Before: Her Honour Judge J Beech, Judge of the Upper Tribunal [NAME_2], Member of the Upper Tribunal [NAME_3], Member of the Upper Tribunal

Appellants:

[redacted]

&

[NAME_6] & [COMPANY_7]

Attendances: For the Appellants: [redacted]

Heard at: Field House, 15-25 Bream’s [ADDRESS], [POSTCODE] Date of hearing: 26 January 2016 Date of decision: 18 February 2016

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that:

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a) The appeal by [NAME_4] against the order disqualifying him for a period of three years BE ALLOWED to the limited extent that the period of disqualification is reduced to two years, ten months with effect from 13 September 2015. (b) The remaining appeals BE DISMISSED with immediate effect.

SUBJECT MATTER:- adverse maintenance findings; operating in excess of authorisation, financial resources, “fronting”; good repute and disqualification.

CASES REFERRED TO:- [COMPANY_11] & [NAME_12] v Secretary of State for Transport (2010) EWCA Civ. 695; Priority Freight 2009/225; Bryan Haulage (No.2) 2002/217; Internlink Express Parcels Ltd v Night Trunkers Ltd & Anor (2001) EWCA Civ 360; Silvertree Transport T/2012/71; [NAME_14] & [NAME_14] T/2009/517.

REASONS FOR DECISION

1. These are appeals from the decisions of the Traffic Commissioner for London and the South East of England (“TC”) made on 15 August 2015 and 13 November 2015 when he revoked the restricted operator’s licences held by the Appellant companies, [NAME_4] [COMPANY_5] ([NAME_5]) and [COMPANY_7] (“[NAME_8]”) and disqualified [NAME_4] (“[NAME_4]”) from holding or applying for an operator’s licence for a period of three years and disqualified [NAME_6] (“[NAME_6]”) for a period of eighteen months. The orders were made as a result of adverse findings made under ss.26 and 27 of the Goods Vehicle (Licensing of Operators) Act 1995 (“the Act”). The appeal against the revocation of [NAME_5]’s licence was withdrawn during the appeal hearing. The appeal against the disqualification of [NAME_4] remained in issue. And whilst it is accepted that the operator’s licence of [NAME_8] was rightly revoked on the grounds of lack of financial resources, other findings justifying revocation continue to be the subject of appeal along with the disqualification of [NAME_6].

Background Circumstances – [NAME_5]

2. The factual background to the appeal appears from the documents, the transcript and the TC’s written decisions. By an application received by the Central Licensing Unit (“CLU”) on 28 July 2014, [NAME_5] applied for a restricted licence authorising five vehicles. The operating centre was situated at [ADDRESS], [ADDRESS], Greenford and [NAME_4] was the sole director of the company. The maintenance contractor was named as [NAME_15]. No interim authorisation was requested.

3. Whilst the application was being processed, three vehicles which were being operated by [NAME_5] were stopped by the DVSA on 27 August

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2014, 25 September 2014 and 30 October 2014. The second vehicle to be stopped was issued with an immediate “S” marked prohibition for missing propeller shaft bolts, loose wheel nuts and tyre damage. As a result of the unauthorised use of these vehicles, it was determined that the [NAME_5]’s application for a licence was to be considered at a public inquiry. The hearing took place on 17 November 2014 and the company was represented by [NAME_16] of [NAME_17]. [NAME_4] told DTC Baker that the vehicle stopped on 27 August 2014 had been used by a [NAME_18] without permission; the vehicle on 25 September was being used because [NAME_4] thought that his transport consultant, [NAME_19], had told him that an interim licence had been granted and the vehicle on 30 October should not have been on the road but had been taken by a [NAME_18] to go to the garage. When questioned by [NAME_16] about compliance, [NAME_4] assured the DTC that “everything is going to be done 100% from now on, not 99%”. Upon [NAME_4] undertaking that an independent audit of the company’s compliance systems would be undertaken and provided to the Office of the Traffic Commissioner (“OTC”) by 17 February 2015 along with the company’s proposals for implementing any recommendations within the report and that a copy of [NAME_18] disciplinary code was to provided to the OTC by 15 December 2014, the DTC granted the application with effect from 24 November 2014.

4. [NAME_5] then failed to comply with the undertakings given by [NAME_4]. Whilst the audit report was dated 9 February 2015, it was not provided to the OTC until 23 March 2015 and only following a chasing letter sent by the OTC on the 11 March 2015. The report was not accompanied with the company’s proposals for implementing the audit recommendations. As for the disciplinary code, two chasing letters had to be sent by the OTC before the code was provided on 9 January 2015.

5. On 31 December 2014, the OTC received an application to increase [NAME_5]’s vehicle authorisation to fifteen and to add an additional operating centre at Glebe Farm, [ADDRESS], South Ruislip. An interim licence was granted in respect of the new operating centre on 6 May 2015 which did not include any interim authority for an increase in the number of authorised vehicles. As a result of the application, reports from a vehicle examiner and two traffic examiners were submitted to the TC.

6. Vehicle Examiner (“[NAME_20]”) Mitchell submitted an adverse maintenance investigation report dated 28 April 2015. He had conducted a maintenance investigation on 12 March 2015, which he had marked as unsatisfactory for the following reasons:

 Nine prohibitions had been issued up to 1 April 2015. Prohibition types totalled six immediate, eleven delayed and ten advisory with one “S” marked. There were no [NAME_21] (“preventative maintenance inspection”) records for six of the

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eight vehicles which had been issued with prohibitions. When three of the vehicles were stopped, they were not specified on the company’s licence although they were added later that day, with other vehicles being removed as there was no margin in the vehicle authorisation and another three vehicles which had been stopped had never been specified on the licence, before or following roadside encounters.  The prohibition rate over two years was 89% compared to the national average of 30%.  There were no [NAME_21] records for six vehicles which were said to be used solely off road and these vehicles had never been specified on the licence although two prohibitions in September 2014 and January 2015 had been issued to two of those vehicles, which demonstrated that the vehicles had been used on the roads.  [NAME_18] defect reports contained mistakes for example, the wrong vehicle registration number or odometer readings. Quality checks were recommended.  Since 17 November 2014, two [NAME_18]’s hours prohibitions had been issued equating to a rate of 29% (national average 10%) and four graduated fixed penalty notices had been issued.  Two new maintenance contractors ([NAME_22] and [NAME_23]) were being used although no contracts were available and none had been provided to the OTC.  During the course of the investigation, [NAME_24] checked one vehicle and issued a delayed prohibition for a missing wing, which was then welded back on whilst [NAME_24] was on site.

[NAME_24] noted that the first time pass rate at annual test was 100% (two vehicles) but there may have been other vehicles that had been tested which had not been specified on the licence. He gave an example of vehicle [ID]. [NAME_24] concluded that the company was using more vehicles than its authorisation and that a “shuffling of the pack” exercise took place when vehicles not specified were stopped by the DVSA. Further, it was clear from the prohibitions that there were shortcomings in the company’s maintenance systems.

7. In response to [NAME_24]’s findings, [NAME_4] wrote a letter dated 19 March 2015 stating that all the company’s vehicles had been obtained from reputable commercial vehicle dealers and had been supplied fully serviced and as a result, no first use inspections had taken place prior to the vehicles being used. He accepted that it may have been good practice to undertake such checks. As for the prohibition history, he considered that this had been fully explained to DTC Baker in November 2014 although there was prohibition for loose wheel nuts which was the fault of the maintenance contractor. Finally, he assumed that the prohibition issued by [NAME_24] during his investigation was for a “minor” matter as otherwise [NAME_18] would have reported the defect and it would have been repaired (It is of note

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that many of the prohibitions had been issued after DTC Baker held his public inquiry).

8. The reports submitted by Traffic Examiners (“[NAME_20]”) [NAME_20] can be summarised as follows:

 Vehicles operated by [NAME_5] were stopped on 4 December and 9 December 2014; neither was displaying licence discs and the vehicle stopped on 9 December was carrying goods which were not the property of the company. That vehicle was registered to [COMPANY_25] (“SLS Haulage”). Its sole director was [NAME_26] and the company was located at the same operating centre as [NAME_5]. SLS Haulage was not the holder of an operator’s licence. A question was raised as to whether a standard licence was required. The company was contacted and within a short time, this vehicle was added to the licence.  On 19 March 2015, a vehicle was stopped which was not displaying an operator’s licence, it was being operated in excess of the company’s vehicle authorisation and it was carrying goods which were not the property of [NAME_5]. A standard operator’s licence was therefore required for that activity.  On 1 April 2015, a vehicle being operated by the company was stopped and found not to be displaying a licence disc. Within twenty five minutes of the encounter, the vehicle was specified and another removed from the licence.  On 30 April 2015, two vehicles operated by [NAME_5] had been stopped by DVSA officers. Neither was displaying licence discs. One, which was registered to SLS Haulage was driven by [NAME_27] who only held an Irish driving licence, his UK licence having been revoked as a result of his failure to submit his licence to the DVLA following the commission of a road traffic offence. He was therefore treated as a foreign [NAME_18] and as a result of there being no evidence that he had undertaken any [NAME_18] CPC training, a fixed penalty notice was issued in respect of that and another was issued for exceeding four and a half hours driving without the required break. By reason of the above, [NAME_27] was driving the vehicle whilst uninsured. The other vehicle stopped that day, was registered to [COMPANY_28] with the same address as [NAME_5]’s operating centre. Its operator’s licence had been revoked. [NAME_4] had been a director of the company for one month in 2014. [NAME_26] had also been a director.  On 8 May 2015, a vehicle registered to the company and being operated by it, was stopped displaying the operator’s licence disc of [COMPANY_29]. The vehicle was not specified on any licence. [NAME_20] rang [COMPANY_29] and spoke to [NAME_30] who stated that the vehicle had been sold to [NAME_5].

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 On 12 May 2015, another vehicle was stopped and found to be displaying an expired disc issued to [COMPANY_32]. The vehicle was registered to [NAME_31] trading as [NAME_33].  When [NAME_4] was interviewed about the above matters, he told [NAME_20] that the company owned fourteen vehicles and employed fourteen drivers but not all of the vehicles were used. Some of them were operated only on site work and there were about seven operating on the road. One of the vehicles stopped on 30 April 2015 was being operated under the operator’s licence of [NAME_34] whilst the other should have been specified on the company’s licence by the CLU following an application. He confirmed that the company was the operator of all of the vehicles which had been stopped. [NAME_4] was not asked about the use of an expired disc in the name of another operator on 12 May 2015.  As it was considered that there was a pattern to [NAME_5]’s activities in operating unspecified vehicles and then specifying those vehicles following roadside encounters whilst at the same removing another vehicle, an s.99ZA letter was sent with a deadline for the production of documents and digital data of 15 May 2015. The deadline was not met and so [NAME_20] attended the operating centre and spoke to [NAME_4] on the telephone. [NAME_4] confirmed that he continued to employ [NAME_27] despite the fact that his licence had been revoked and no action had been taken to rectify the position. [NAME_4] was instructed to direct [NAME_27] back to the operating centre. It was [NAME_20]’s view that neither [NAME_27] nor [NAME_4] had appreciated the significance of the revocation of [NAME_27]’s licence and had done nothing to resolve it.  [NAME_20] requested that he be allowed to review the company’s systems but [NAME_4] asked for the review to be postponed as the employee, [NAME_35], who could assist him was in Ireland. [NAME_4] agreed to inform [NAME_20] when [NAME_35] had returned. He did not. On 27 May 2015, [NAME_20] contacted [NAME_4] again and was told that [NAME_35] was now available but that [NAME_20] could not undertake the systems review because another one of [NAME_5]’s vehicles had been stopped that day and [NAME_18] had been “harassed” by DVSA staff. [NAME_4] took the view that he was being victimised. He was instructed to contact a Senior Traffic Examiner to make a complaint. In the circumstances, no compliance review took place.  In the interim, on 27 May 2015, two further vehicles were stopped which were being operated by [NAME_5] in excess of its margin and without displaying a licence disc. It was of concern to [NAME_20] that these vehicles were on the road only six days after [NAME_4] had been interviewed by TE [NAME_20]. Further, one of the vehicles was registered to the motor trade and was in the livery of [COMPANY_36]. [NAME_18] did not have a UK driving licence, the licence having been revoked. The

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[NAME_18] of the other vehicle was obstructive during the encounter. He ignored directions to follow a DVSA vehicle and when he eventually stopped, he claimed to be working for “[NAME_58]” which did not exist. Documents in the vehicle related to Thames Materials and the livery of the vehicle was also of that operator although the decals had been removed. [NAME_18] later agreed that he was in fact working for [NAME_5].  On 9 June 2015, another vehicle was stopped which displayed a disc issued to a Northern Ireland operation, [NAME_37] trading as [NAME_38] [NAME_18] said he had been employed by [NAME_37] of 10, [ADDRESS], Greenford for the previous three weeks (the same address as [NAME_5]’s operating centre), having arrived in this country to work three weeks and three days before he was stopped). The vehicle was registered to [COMPANY_28] having been acquired from [COMPANY_36]. [NAME_4] was later interviewed. He said that [NAME_18] had been mistaken when he said that he was working for [NAME_30]. He was working for [NAME_5], undertaking site work which did not require a licence. [NAME_4] stated that he was under the impression that if an empty lorry returned to the operating centre having been working on site, it did not require an operator’s licence. [NAME_18] had worked for the company for six months. As for the disc displayed in the window, [NAME_4] stated that he had forgotten to remove it.  By 9 June 2015, the number of prohibitions issued to vehicles known to have been operated by the company had increased to eleven with a rate of 73% over two years (national average 29%). There had been three drivers’ hours prohibitions and five graduated fixed penalty notices for drivers hours and records offences and one for a dangerous load.  [NAME_20] concluded that his investigation established that the company had operated sixteen vehicles over the previous seven months which did not display a valid operator’s licence disc and whilst as a result of earlier encounters, the vehicles had then been added to the licence, latterly the vehicles had simply been driven above the margin. It was difficult to ascertain with any degree of accuracy how many vehicles [NAME_5] had operated or whether its systems were compliant. However, it was known that during a number of roadside encounters it was obvious that the company had not locked into the vehicles’ digital data systems. He queried whether any drivers’ hours checks were undertaken or any driving licence checks in view of the fact that two drivers had been found to hold revoked UK licences. [NAME_19], the transport consultant maintained to [NAME_20] that he had had no involvement with the company save during the initial application for the licence and the variation application. He had explained to [NAME_4] that he could not operate vehicles above the licence authorisation.

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9. In preparation for the public inquiry which was scheduled to take place on 4 August 2015, written representations were submitted on behalf of [NAME_5]. It no longer required the additional operating centre; first use [NAME_21] were now undertaken; a foreman/[NAME_18], [NAME_39], had been appointed to check the drivers defect reports. He was also registered to attend a transport manager CPC course; [NAME_21] were now being undertaken by an in-house mechanic, [NAME_40] using a new, in house workshop and a mobile fitters van; the use of vehicles in excess of [NAME_5]’s margin was the result of [NAME_4]’s false impression that vehicles returning from “on site” work did not need an operator’s licence when returning to the operating centre and there had also been a problem with members of staff specifying vehicles because they did not know the password to the CLU website; the vehicle displaying the [NAME_30] disc was owned by [NAME_5] but was being used by [NAME_30]; [NAME_27] had passed his [NAME_18] CPC; one vehicle which had been stopped carrying a load may have been on its way to its annual test; the DVSA evidence was accepted; four drivers including [NAME_27] had been dismissed; at least three members of staff would attend the operator compliance seminar; [NAME_4]’s knowledge about operator licensing was “lacking” and his apparent lack of co-operation with [NAME_20] was as a result of a misguided impression that he was being vicitmised; it was accepted that it was unlikely that an increase in vehicle authorisation would be granted until the company had achieved a period of compliance. Enclosed with the representations were a number of tachograph analysis reports dated July 2015, signed by drivers to acknowledge that identified infringements had been brought to their attention.

10. [NAME_20] also prepared an addendum report for the public inquiry. He had identified a further five vehicles which were associated with [NAME_5]’s licence. The company’s systems were unsatisfactory by default. He could not say how many vehicles were in fact being operated or how many drivers were employed. The number of prohibitions had increased to thirteen.

The Public Inquiry Hearing – [NAME_5]

11. At the public inquiry, all of the DVSA officers were in attendance, along with [NAME_4], [NAME_43] and [NAME_42] on behalf of [NAME_5]. [NAME_16] represented [NAME_5] and at the outset, he withdrew the application to increase the company’s vehicle authorisation. [NAME_4] had accepted that he had not educated himself about operator duties and he acknowledged that compliance was required.

12. [NAME_4] then gave evidence. In addition to the contents of the written representations, he stated that after the company had been granted a licence, he had been left on his own and had not received any training. [NAME_39] was now his compliance manager and [NAME_4] was going to attend the operator licence compliance course in

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September 2015. He had not had the time to attend the course before. He had delegated the task of complying with the undertaking given when the licence was granted, to provide a copy of [NAME_18] disciplinary procedure to the OTC and he had not checked whether it had been sent. He could not say why proposals for implementing the recommendations in the maintenance audit had not been submitted along with the report. He accepted that the company’s verbal [NAME_18] defect reporting system had not worked. Defect books had been issued to the drivers and drivers’ entitlements were now checked every three months. Many of the prohibitions related to tyres which were constantly damaged on construction sites. Other prohibitions related to broken indicators and others related to loose wheel nuts. Whilst the vehicles were now fitted with wheel nut indicators, the company did not have a re-torque procedure. Whilst [NAME_19] had been producing drivers’ hours infringements reports, the company had not been acting upon them. [NAME_4] only one occasion when a vehicle had been stopped carrying a load of stone. A contractor on a site upon which [NAME_5] was working had requested that it be moved. He repeated that he had not realised that a vehicle needed an operator’s licence if it was not carrying a load and the use of more vehicles than authorised was because he had lost track of the vehicles which were specified. The vehicle which had been stopped on 30 May 2015 which was not displaying a disc but which was registered to [COMPANY_28] ([NAME_4] had been a director of this company and its operator’s licence had been revoked) was being operated by [NAME_28]. It had been insured by [NAME_5] because [NAME_45], who was the director of [NAME_28] had told [NAME_4] that the insurance premiums for the vehicle were too expensive for the company to pay. [NAME_4] had helped his friend by insuring the vehicle for [NAME_28]. The reason why another vehicle was displaying a disc issued to [COMPANY_29] was that [NAME_5] had purchased vehicles from [NAME_30] and the vehicles were displaying the discs when the company took possession of them. He went on to accept that having submitted an application for an increase in vehicle authorisation, he had simply gone ahead and operated the additional vehicles without waiting for the application to be granted. He maintained that [NAME_19] had assured him that the application would be granted. He acknowledged that he had made a mistake but now he had staff to assist in compliance. He had since sold “a couple of lorries” to [COMPANY_7], which operated from the same “yard” as [NAME_5]. He could be trusted to run a complaint operation in the future.

13. Prior to [NAME_16]’s closing submissions, [NAME_24] told the TC that having inspected the records that had been produced that morning, it was clear that there were still mistakes being made by drivers during their daily defect walk round checks and also during the [NAME_21] inspections, for example, the brakes of vehicles were still only being checked by way of road testing. [NAME_40] offered an undertaking that roller brake testing would take place four times a year and that the test dates would be entered onto the forward planner.

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14. [NAME_16] accepted that at first blush, this was a case which justified revocation because of “wholesale non-compliance”. That was however the result of misunderstandings on the part of [NAME_4] and he should be given credit for his honesty before the TC and for having introduced systems and in particular, [NAME_39] and [NAME_40]. [NAME_4] could “demonstrate his desire” to be complaint and he deserved the opportunity to do so. [NAME_16] accepted that [NAME_5] was in the “last chance saloon”. He offered undertakings that audits would be undertaken in relation to drivers’ hours and maintenance.

15. The TC then adjourned for the preparation of a written decision. On the following day, he received a report from [NAME_46] of the Metropolitan Police. On 4 August 2015 (the day of the public inquiry), vehicle [ID], laden with soil/muck was stopped. The vehicle was not displaying a disc and was not specified on any licence. [NAME_18] stated that the operator was [NAME_8] and he showed the officer a Waste Transfer Note in that name. [NAME_18] said that he had worked for the company for three weeks. His boss was “[NAME_39]” but he could not give the name of a company director or any other person employed by [NAME_8]. He had been driving the vehicle since 7 July 2015. The officer noted that [NAME_8] had an operator’s licence authorising ten vehicles with ten specified. It therefore did not have a margin to accommodate this vehicle. The registered keeper of the vehicle was [NAME_4] since 20 July 2015 and it was insured by [NAME_5] and the vehicle digital tachograph was locked to [NAME_5]. Both [NAME_18] and [NAME_46] attempted to speak to someone at [NAME_8] by telephone but without success. [NAME_46] issued the vehicle with two immediate prohibitions for insecure tailgate fittings (three out of four bolts missing) and both stop lamps being inoperative. The Tribunal notes that this vehicle had also been stopped on 20 May 2015 when it was being operated by [NAME_5] but at that stage was registered to the motor trade and was in the livery of [COMPANY_36].

16. [NAME_5] was asked for any comments about [NAME_46]’s report. [NAME_16] responded. He stated that [NAME_4] had said that he had sold a “number” of vehicles to [NAME_8] and the vehicle in question was one of them. He had disposed of the vehicle “some weeks ago” in order to demonstrate compliance. The insurance and the registered keeper details had not been changed because [NAME_8] had not paid for any of the vehicles. The vehicle had been specified on the licence of [NAME_8] the week before it was stopped by [NAME_46] (and the Tribunal notes that it was as a result of an administrative error that it had not been although it replaced another vehicle which was also in use). [NAME_16] explained that the reason why [NAME_18] had said that he was working for [NAME_5] was because he had worked for the company prior to he and others transferring to [NAME_8] along with the vehicles. He denied on behalf of [NAME_4] that the “[NAME_39]”

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referred to by [NAME_18] was [NAME_39]. [NAME_4] was prepared to attend a re-convened hearing if required.

The TC’s decision in respect of [NAME_5]

17. The TC found that [NAME_5] had failed to fulfil a condition on its licence, by failing to notify the change of original maintenance provider and the subsequent change to in-house provider (s.26(1)(b) of the Act); that the company’s vehicles had not been kept in a roadworthy condition (s.26(1)(c)(iii) of the Act); fixed penalties for drivers’ hours and tachograph offences and for a dangerous load had been incurred (s.26(1)(ca) of the Act); the company had failed to fulfil various undertakings, namely, that the laws relating to the driving and operation of vehicles would be observed and in particular, that drivers held the relevant driving entitlement; vehicles were operated without being specified and in excess of the margin and by insuring a vehicle which [NAME_4] had said was being operated by [COMPANY_28], he had facilitated the unauthorised use of that vehicle by [COMPANY_28] which did not hold an operator’s licence. Further, his actions in insuring the vehicle constituted a fraud on the relevant insurance company. All of these matters fell within s.26(1)(f) of the Act along with: failing to act upon the drivers’ hours analysis data provided by [NAME_19]; vehicles were not kept fit and serviceable; [NAME_18] defect reporting system was ineffective; [NAME_18] disciplinary code was not submitted in accordance with an undertaking; neither were the maintenance audit or the company’s proposals for implementation of the recommendations. The TC did not make any findings in relation to the possible use of the operator’s licence of [NAME_8] but determined that an investigation would take place and [NAME_8] would be called to a public inquiry.

18. The TC then undertook the requisite balancing exercise. Whilst his order of revocation is not the subject of appeal, his findings are relevant to the issue of [NAME_4]’s disqualification. In addition to the matters set out in paragraph 17 above, the negative features of the case were that [NAME_4] “jumped the gun” first of all in operating vehicles before [NAME_5] had been granted a licence and again after applying for a three-fold increase in vehicle authorisation. His assurances given to the DTC in November 2014 that he would be 100% compliant had turned out to be worthless not only in terms of the number of vehicles operated but the roadworthiness of those vehicles and compliance with the drivers’ hours and tachograph rules. It was for him to arrange training for himself and he failed to do so.

19. On the positive side, of the vehicles that had been tested in the name of [NAME_5], there was a 100% pass rate; [NAME_39] had been appointed to ensure compliance; a written [NAME_18] defect reporting system had been implemented; driving entitlement was now being checked; undertakings had been offered to undergo further audits, to have roller brake testing and to continue with independent tachograph

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analysis; [NAME_4] had booked himself onto a operator licence compliance course.

20. The TC found that the steps taken were “too little and too late”. But for [NAME_4]’s promise of 100% compliance in November 2014, in view of [NAME_5]’s history of unauthorised operation, the application for a licence would have been refused. [NAME_4] must have been aware of the importance of compliance but he did little or nothing to ensure that it was achieved. “Worse”, he knowingly operated many more vehicles than the five authorised and continued to do so even after vehicles which were not specified on the licence had been stopped and he had been warned about unauthorised operation. He operated without regard to the law. At public inquiries “he is long on promises and short on delivery”. The TC had no doubt that this would continue. [NAME_4] had demonstrated that he was not a person who the TC could trust to run a compliant operation. The answer to the “Priority Freight” question (supra) was extremely unlikely. The TC further had no doubt that the conduct of the operator was such that it ought to be put out of business (the Bryan Haulage question (supra)).

21. As for the disqualification of [NAME_4], the TC determined that his lack of attention to compliance and the degree of non-compliance justified disqualification. The TC was inclined to give him credit for admitting that he simply operated more vehicles than authorised rather than continuing with a pretence that some vehicles were lent out to other operators or were running unloaded. However, the suspicions that [NAME_4] may have simply transferred the ten extra vehicles which [NAME_5] had hoped to legitimately operate to [NAME_8] would undo all of that credit. The TC determined to reserve his decision on “whether” to disqualify [NAME_4] until after the public inquiry into [NAME_8]. If his suspicions were unfounded, [NAME_4] could expect a disqualification for around twelve months. If they were made out, the disqualification would be significantly longer.

[NAME_8] – background circumstances

22. [NAME_8] was incorporated on 28 April 2014. Its sole director was [NAME_47]. It was granted a restricted operator’s licence on 18 September 2014 authorising ten vehicles. Its operating centre was situated at Unit 9, The Goods Yard, [ADDRESS] and its maintenance provider was [COMPANY_48]. No vehicles were specified on the licence until 18 June 2015. Between that date and 31 July 2015, ten vehicles were then specified.

23. On 31 July 2015, a prohibition was issued to a vehice for a tachograph which had not been properly sealed. Quite apart from the vehicle which had been stopped by [NAME_46] on 4 August 2015, another vehicle had been stopped on 5 August 2015 and was issued with a fixed penalty notice as a result of [NAME_18] failing to produce any evidence of a [NAME_18] CPC.

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24. On 6 August 2015, by way of an electronic application, [NAME_47] was replaced as director by [NAME_6] with effect from 29 July 2015. Then by an application received on 7 September 2015, [NAME_8] applied for a new licence with an operating centre in Denham, Uxbridge with a vehicle authorisation of ten. Maintenance was described as being “in house”. The application failed to disclose the existence of the existing licence and did not indicate whether it would be surrendered upon the grant of a new licence. No response was received to a written enquiry from the CLU about these issues.

25. By a letter dated 11 September 2015, [NAME_8] was called to a public inquiry. Maintenance (prohibitions having been issued), drivers’ hours and records (fixed penalty notices having been issued) and the company’s links to [NAME_5] were issues raised in the letter. A copy of the TC’s decision in respect of [NAME_5] was enclosed along with the report of [NAME_46]. [NAME_8] was put on notice that [NAME_4] had also been invited to attend the hearing. It would appear that the application for a new licence had not been processed by that stage and a further call up letter was issued on 30 September 2015. It made clear that the evidence the TC would be considering would include evidence of any possible links with [NAME_5].

26. A third call up letter was sent out to [NAME_8] on 12 October 2015 attaching a further report from [NAME_46]. Following the roadside encounter on 4 August 2015, the officer sent an s.99Z letter to [NAME_47] requesting details of the company’s operator’s licence and copies of the vehicle’s documents, tachograph calibration certificate, test certificate and proof of insurance by 12 August 2015. On 6 August 2015, in response to the s.99Z letter, [NAME_46] received a telephone call from someone stating to be “[NAME_6]” who identified himself as the director of the company (at that stage, company house details continued to show [NAME_47] as the director). He was aggressive in his manner claiming that “we have done nothing wrong”. He was invited to attend an interview and his response was that it was a “waste of time”. He was advised that if he was refusing to attend an interview, the matter would be reported to the TC but the man did not respond apart from stating that he was going on holiday the following day until 10 September 2015 and that he would call [NAME_46] upon his return. Then on 10 August 2015 [NAME_49] called [NAME_46]. [NAME_49] was or had been an employee of [NAME_5] and had attended the public inquiry with [NAME_4] on 4 August 2015. She explained that the vehicle he had stopped should have been specified on the [NAME_8] licence and that the fact that it was not was an error on the part of the CLU. She agreed to send the documentation required by the s.99Z letter electronically and in due course she did send some documents. Despite numerous reminders, the outstanding documents required were: the vehicle registration document, the annual test certificate, the insurance certificate and the tachograph calibration certificate.

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The [NAME_8] Public Inquiry held on 21 October 2015

27. At the hearing, [NAME_6] and [NAME_4] were present and represented by [NAME_16] who at the outset explained that the application for a new licence meant that [NAME_8] was seeking a total authorisation of twenty vehicles over two licences. Analysis of the company’s bank statements (produced for the period 1 September to 21 October 2015 only) demonstrated that there were no funds in the account between 1 September and 24 September and no overdraft facility. Then between 24 September and 5 October, there was a balance of £500 or less. The balance then increased without satisfying the average required to operate either ten or twenty vehicles until the day of the public inquiry when it increased to £44,208. £35,400 was required for twenty vehicles. However the three month average remained insufficient to demonstrate sufficient financial resources. It was noted by the TC that there had been three substantial payments into the account from: [NAME_50] (a company operated by [NAME_30]) and [COMPANY_36] (which [NAME_6] stated was for the carting of muck). [NAME_6] stated that he had set up the bank account one month before the hearing and that he had never seen the company’s original bank statements which should have been in existence prior to taking over the company. He had purchased the company with zero assets and had bought the shares. The reason for doing so was that having been a construction site manager for twenty years, he had been given an opportunity to “get into haulage” and he saw it as a new challenge. He had known [NAME_4] for twenty years. The large payments into the bank account were the result of him giving his clients 90 days to pay their invoices. He was leasing vehicles from a [COMPANY_51] and the reason why there were no payments to that company from the bank account was because he was paying for them out of his own account. When it was put to [NAME_6] that [NAME_4] had contended during the previous public inquiry that [NAME_6] had bought the vehicles from [NAME_5], he said that he had bought them and he was trying to work out a different lease agreement with the [COMPANY_51]. Other vehicles not under lease had been paid for by him with cash given to [NAME_4]. The cash came from the sale of a house. There was no documentation to confirm this.

28. [NAME_4] then interceded and stated that [NAME_6] had paid him £40,000 as a “retainer”. It was a verbal agreement to the effect that when [NAME_6] was “up and running” he would pay [NAME_4] “X amount”. The £40,000 was for the good will of the company and for the vehicles. [NAME_4] had introduced [NAME_6] to [NAME_52], a finance man and he was drawing up contracts for [NAME_6]. [NAME_6] had paid the monthly instalments under the lease agreements for two months although the legal agreements remained with [NAME_4]. The payments were in cash to [NAME_52]. The log books had been transferred to [NAME_8].

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29. [NAME_6] continued. He had paid for the vehicle leases in cash as he did not have a cheque book for his personal bank account. In any event he generally held his money in cash. It was put to [NAME_6] that [NAME_8] may have been used as a device to enable [NAME_5] to operate more vehicles than it was authorised to do so. It was important that affairs be kept separate whereas it had transpired that [NAME_5] was the lessee of the vehicles when [NAME_6] had, on his account, been operating the vehicles for two or three months. [NAME_6] assured the TC that he would have everything in the name of [NAME_8] within a further two or three months. He agreed that all of the vehicles specified on the licence had come from [NAME_5].

30. His evidence turned to the vehicle stopped by [NAME_46] on 4 August 2015. He said that he did not know who “[NAME_39]” was and neither did [NAME_18] as he was foreign and he had simply heard the name being used. [NAME_6] denied that anyone by the name of “[NAME_39]” had been employed by [NAME_8] at that time. He had taken on [NAME_39] and [NAME_40] along with [NAME_49] a couple of days after [NAME_5]’s licence had been revoked. They knew the vehicles, the drivers and they had the knowledge required to operate ten vehicles. There was no record of salary payments being made because [NAME_6] had paid the staff in cash and had only started on-line banking on 24 September 2015.

31. [NAME_6] was taken to the records he had produced for vehicle KX06 JHZ which had been transferred to [NAME_8] on 10 June 2015. The invoice for the tachograph calibration was dated 1 July 2015 and was paid for by [NAME_4]. [NAME_4] interceded and said that he had sold all of the vehicles as roadworthy and so had paid for various tests to be undertaken. [NAME_6] could not say whether he had paid vehicle excise duty on transfer of the vehicle to [NAME_8] as his accountant dealt with all of that.

32. The insurance documents produced by [NAME_6] were gone through. Between 24 October 2014 and 24 October 2015, the vehicle fleet was insured by [COMPANY_5] &/or [COMPANY_28]. There was a temporary cover note for the period 10 September to 8 October 2015 in the name of [COMPANY_5] &/or [COMPANY_7]. As at the date of the hearing, only the former insurance covered the fleet. [NAME_6] asserted that [NAME_5]’s insurance covered the vehicles until about two weeks before the hearing and they were now insured by [NAME_8]. He had delayed obtaining cover because insurance for ten vehicles was expensive. (Following the hearing, the TC received a cover note dated 22 October 2015 covering the period from that date to 24 October 2015 and an insurance certificate issued 24 October 2015 covering 10 September to 24 October 2015).

33. [NAME_6] was asked about the prohibitions issued by [NAME_46] on 4 August 2015. He thought that the defects identified would have been

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dealt with by the mechanic upon the vehicle’s return to the operating centre and that the damage was probably caused on site, although he could not say which site. He did not think that [NAME_18] was aware that the defects existed although he had not spoken to [NAME_18] about them.

34. [NAME_6] denied that he had seen the s.99Z letter that had been sent by [NAME_46] as it had been sent to [NAME_47]. He denied that he had telephoned [NAME_46] on 6 August 2015 in response to the letter. He would not have identified himself as “[NAME_6]” [NAME_6] even though that is how he signs his name. He calls himself “Tom”. He did not know who did speak to [NAME_46]. He believed that [NAME_49] had sent all of the documents listed in the s.99Z letter and he had not been aware of the lengthy discourse between [NAME_46] and [NAME_49] about them. He accepted that [NAME_5] was insuring the vehicle on 4 August 2015. The TC required all outstanding documents to be produced to him at the conclusion of the public inquiry including [NAME_6]’s bank statements, insurance documents and copy invoices from the [COMPANY_51] relating to the vehicle leases. [NAME_6] said that there was no point producing his own bank statements because he had paid for everything in cash. He had not been funding the company by way of a director’s loan.

35. [NAME_16] then made his closing submissions in relation to [NAME_8]. He reminded the TC that vehicles do not have to be registered to the users of vehicles. As for who owned the vehicles, [NAME_4] had said that he had “sold” the vehicles to [NAME_8]. That was an “easy colloquial term” for what had taken place. There were various methods for disposing of vehicles. All of the vehicles were specified on the licence of [NAME_8]. [NAME_6] knew little about operator licensing and he needed to attend a seminar. It had been a steep learning curve for him. He had learnt something from the collation of the documents for each vehicle for presentation at the public inquiry. This had been undertaken by [NAME_19]. It was accepted that [NAME_8] needed to have an audit if the TC was minded to grant the second licence. As for the issue as to whether [NAME_8] was a “front” for [NAME_5], what had taken place was that [NAME_4] had disposed of his vehicles. [NAME_4] is not a director of [NAME_8] and was not involved with the company. He asked that the TC take [NAME_6] at face value. Not everything was right with the operation. Documents had not been produced to [NAME_46] although [NAME_6] had now learnt the importance of document production. He knew that he could not be involved with [NAME_4] and he was trying to operate compliantly. Apart from the “convoluted way” that vehicles were transferred to [NAME_8], there was little evidence to suggest that [NAME_6] was operating a company for [NAME_4]. [NAME_4] is a publican but he wanted to protect his future. He was distressed by the decision to revoke. [NAME_6] had [NAME_39] who had passed the first part of the transport manager CPC and the TC could be satisfied that the company was fit to hold a licence despite the unusual business transaction between Mr

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[NAME_6] and [NAME_4]. He offered an undertaking that [NAME_6] receive operator licensing training.

36. The TC observed that it appeared that what had taken place was that once [NAME_4] had realised that he could not operate more than five vehicles, the vehicles, drivers and administrators of his company had simply transferred to [NAME_8] and that nothing had changed apart from the director of the company. If that view was correct, then it amounted to a deliberate attempt to deceive the TC and warranted a long disqualification.

37. [NAME_4] then gave evidence. He said that he had already “served one month of his disqualification”. Prior to the public inquiry into [NAME_5], he had already started to dispose of the surplus vehicles and then he disposed of the rest. He had no involvement with [NAME_8]. He was a publican (the TC asked which establishment [NAME_4] managed so that he could avoid it). [NAME_4] was “done and dusted” with operator licensing and he would not be appealing the order of revocation. What was the point? He had disposed of his vehicles and staff so that [NAME_6] could have a proper back up team. [NAME_5] continued in business in soft strip out demolition. He had told [NAME_6] that he was going to stop operating and [NAME_6] had said that he was thinking of doing something different. [NAME_4] “ran” [NAME_6] to a solicitor and got him to sign things because if there was any come back, it would be on [NAME_4]. [NAME_4] produced a letter from [NAME_55] dated 20 October 2015 which informed the TC that they had been “instructed that acting on behalf of ([NAME_5]) ([NAME_4]) has sold to [COMPANY_7] ... the company’s lorries and lease of the a yard at [ADDRESS] .. and that [NAME_8] has taken over the contracts of employment of 13 employees .. and finance agreements relating to 6 lorries operated by the company”. The TC observed that this did not support [NAME_4]’s assertion. In conclusion, [NAME_4] stated that he did not consider that he had been given a chance at the previous public inquiry.

38. In his closing submissions in relation to [NAME_4], [NAME_16] did not attempt to persuade the TC that disqualification was wrong in principle but he did urge him to keep the period of disqualification to an absolute minimum. He had been willing to be trained. Any period of disqualification should be such as to allow him back into the industry at some stage in the future. He had been taking steps at the date of his public inquiry to be compliant.

39. Following the public inquiry, [NAME_16] submitted the documents that had been required by the TC. [NAME_46] also sent an email concerning the conversation he had had with the man calling himself “[NAME_6]” on 6 August 2015. The man had called from telephone number: [PHONE], which was the same number which had been used by [NAME_49] when contacting [NAME_46] by telephone. It was also the number recorded on the operator’s licence. In response, [NAME_16]

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informed the TC that [NAME_6]’s mobile number was different to the above number.

The TC’s decisions in relation to [NAME_8] and [NAME_4] dated 13 November 2015

40. The TC found that [NAME_8] lacked sufficient financial resources for its existing authorisation, let alone for an additional ten vehicles. The application for a licence in the Eastern Traffic Area was refused under s.13B, 13C(4) and 13D of the Act. Fixed penalty notices and prohibitions had been issued (s.26(1)(ca) and (c)(iii) of the Act and the undertaking to keep vehicles fit and serviceable had not been fulfilled (s.26(1)(f) of the Act). There was no evidence that [NAME_4] had in fact sold [NAME_5]’s vehicles to [NAME_8]. Some of the leased vehicles continued to be leased by [NAME_5] and transfer had not taken place by the date of the public inquiry. The vehicles were insured by [NAME_5] until 10 September 2015 after which insurance was in the joint names of [NAME_5] and [NAME_8]. As at the date of the hearing, the vehicles were insured by that insurance policy and whilst [NAME_6] had produced an insurance certificate in the name of [NAME_8] it had been back dated. [NAME_8] did not insure the vehicles between 8 October and 22 October 2015 and any claim made upon the policy would have been invalid.

41. The TC was satisfied that [NAME_5] had continued to operate in excess of five vehicles (contrary to s.6 of the Act). There was no evidence to support the assertion that on 4 August 2015, the vehicle stopped by [NAME_46] was in fact operated by [NAME_8]. The vehicle was registered to [NAME_5]; [NAME_5] insured it and [NAME_5] was locked into the tachograph unit; there was no evidence that [NAME_8] had paid [NAME_18]’s wages; indeed the company lacked a bank account at the material time. The TC was satisfied that the “[NAME_39]” referred to by [NAME_18] was [NAME_39]. Whilst [NAME_6] claimed he had taken [NAME_5]’s staff so that they did not lose their jobs, this was unconvincing as the outcome of public inquiry was unknown at that stage (the Tribunal observes that it was probably taking place as the vehicle was stopped). [NAME_5] and [NAME_8] ran as the same business. The TC found that [NAME_8]’ licence had undergone a material change, having been used to enable [NAME_5] to operate beyond its authority and to then enable it to carry on operating once [NAME_5]’s licence was revoked. [NAME_6] demonstrated that he had virtually no knowledge of operator responsibilities and virtually no interest in them. During much of the hearing, he looked to [NAME_4] in search of answers. He was a cipher.

42. The TC considered that the above findings were negative. There was little that could be described as positive. The company did eventually provide all of the documentation required by [NAME_46] and efforts had been made to put the company on a firmer legal footing but there was hardly any documentation. The TC found [NAME_6] to be an

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inconsistent and unreliable witness. His account of the arrangement for the transfer of vehicles changed several times. His account of how he was paying all of the outgoings of the business i.e. with cash, was not credible. It was clear that he had little involvement in the business and he was an aggressive witness. The TC was satisfied that it was he who called [NAME_46] on 6 August 2015. [NAME_4] was similarly unreliable. He maintained that he was a publican. Probing revealed that [NAME_5] was an active demolition business which would have required “muckaway” transport services now provided by [NAME_8], with the same drivers and vehicles as were employed by [NAME_5].

43. [NAME_8] was not fit to hold a licence. It was a device for the continuation of [NAME_5]. It had started to operate the vehicles prior to the vehicles being paid for, transferred, taxed, insured and the digital data locked into. The TC had no alternative but to revoke the licence. He had no faith in [NAME_6]’s ability or willingness to comply in the future and in any event, the whole purpose of the company was to defeat the regulatory regime. [NAME_8] deserved to go out of business. Further, [NAME_6]’s lack of attention to his regulatory responsibilities and his willingness to assist [NAME_4] and his lack of candour with the TC justified a period of disqualification of two years. That time would allow him to rehabilitate himself, ensure his business operates on a legal footing and to educate himself as to an operator’s responsibilities.

44. In a separate decision, the TC determined that [NAME_4] should be disqualified for three years, such order being back dated to 13 September 2015. The reasons for doing so was [NAME_4]’s lack of attention to compliance; the numerous fixed penalties and prohibitions and prolonged operation of vehicles beyond the five authorised, despite warnings; the fact that he operated vehicles prior to [NAME_5]’s application for a licence was originally considered and did so again when an application was made to increase the authorisation; [NAME_4] deceived the TC in stating that having accepted that his application for an increase in authorisation would not be granted, he had sold his surplus vehicles to [NAME_8] when he had “done no such thing”. [NAME_8] was a device to circumvent restrictions placed on [NAME_5]’s licence and he had sought to side step the effects of regulatory action. There were no positive features to weigh into the balance and as a result a period of disqualification for three years was justified.

The Upper Tribunal Appeal

45. At the hearing of these appeals, [NAME_9] represented [NAME_4], [NAME_8] and [NAME_6] and submitted two skeleton arguments for which we were grateful. Dealing first with [NAME_8], [NAME_9]’s first submission was that the TC did not have any regard to, or apply, the legal test of “who is an operator” when determining that [NAME_8] was not the operator of the vehicles specified on its icence. Rather, the TC

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used the words “front”, “vehicle” and “cipher” in describing [NAME_7]’s relationship with [NAME_5] but did not explain what he meant by them. [NAME_9] referred the Tribunal to paragraph 3 of the Tribunal’s decision of T/2012/71 [COMPANY_56] in which “fronting” is defined:

“In the context of vehicle operator’s licensing “fronting” means that a person, partnership or company, which does not have an operator’s licence, users the operator’s licence held by another entity to conceal the fact that they are behaving in a way which requires them to have an operator’s licence of their own. In other words it deprives the Traffic Commissioner of the right to control an “operator”, when Parliament has said that such an entity should be within his or her jurisdiction”.

The starting point for consideration of the issue of “fronting” is s.58(2) of the Act which provides that:

“For the purposes of this Act, [NAME_18] of a vehicle, if it belongs to him or is in his possession under an agreement for hire, hire-purchase or loan, and in any other case the person whose servant or agent [NAME_18] is, shall be deemed to be the person using the vehicle, and references to using a vehicle shall be construed accordingly”.

[NAME_9] further referred to the Court of Appeal authority of Interlink Express Parcels Limited v Night Trunkers Ltd & Anor (2001) EWCA Civ 360 which confirmed that the correct test to be applied was: who had control or the right to control [NAME_18] of the vehicle in question. [NAME_9] submitted that the TC had fallen into error because he had failed to apply this test and as a result his decision could not be regarded as safe and should not be allowed to stand.

46. We are satisfied that there is nothing in this point. The TC made it abundantly clear as to what he meant by the word “front” and spelt out that he considered that [NAME_8] operator’s licence was being used by [NAME_5] in the first instance to operate vehicles in excess of its authorisation and then, once its licence had been revoked, it had continued to use the licence to continue to operate all of its vehicles. The TC’s decision could not be clearer and upon his analysis, the conduct amounted to “fronting”. And if there was any doubt about it, we have noted that as early as May 2015, [NAME_40], [NAME_5]’s in house maintenance provider, was completing [NAME_21] records in the name of [NAME_8] for vehicles which were registered to and insured by [NAME_5]. At that stage, [NAME_8] did not have any vehicles specified on its licence and [NAME_6] was not its director. It is implicit in the TC’s analysis of the evidence (and the absence of it) that [NAME_8] was not the operator of the vehicles but rather that [NAME_5] was and that accordingly, it was [NAME_5] and [NAME_4] who was controlling the drivers whether by himself or through his staff. The absence of any evidence that [NAME_6] operated the vehicles or employed the staff who had purportedly transferred to [NAME_8] was

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striking and could only have led to one conclusion which is the one that the TC in fact came to.

47. [NAME_9]’s next point was that the TC failed to undertake any or sufficient analysis of the issues in order to come to the findings he did upon the issue of [NAME_8] being a “front”. [NAME_9] accepted from the outset that the arrangement which [NAME_4] and [NAME_6] purportedly entered into was “over casual” in that it lacked formality and documentation. Even accepting that there was a lack of funds going into the [NAME_8] bank account, that there was an absence of any evidence that the vehicle finance agreements had been transferred (or indeed were in the process of being transferred), that one vehicle was still locked into [NAME_5]’s system, that there was no evidence of “TUPE” transfer of undertaking letters relating to the staff who had purportedly transferred (and we add, that the vehicles remained insured by [NAME_5]), these matters did not mean that the informal arrangement was not a genuine one. The real issue was whether, in early August 2015, [NAME_5] drivers were being controlled by [NAME_8] or its staff and directors. There was only one piece of third party evidence about the true position and that was the statement of [NAME_46] which recorded that [NAME_18] stopped on 4 August 2015 had said that he was driving for [NAME_8]. This was an important piece of evidence as it was the only evidence that went to the issue of “who controlled the drivers?”. There was no evidence at all that [NAME_5] was the operator of the vehicles despite [NAME_18]’s assertion that it was “[NAME_39]” who gave him instructions. [NAME_9] submitted that the Tribunal should reflect upon the issue. Despite any scepticism it may have about the arrangement between [NAME_4] and [NAME_6], it was in fact a perfectly legal arrangement and it was conceivable that two good friends, who were directors of two different companies, could come to an arrangement similar to the one that [NAME_4] and [NAME_6] had come to and that one of them would transfer assets to the other without the “usual formalities”. [NAME_9] accepted that “all aspects” of the arrangement would give rise to “suspicions” but it was capable of being lawful. [NAME_4] had to deal with the vehicles which [NAME_5] had operated in excess of its licence margin and it was perfectly appropriate for the company to divest itself of excess vehicles. If a director in those circumstances, had a friend who was also a director of a company with a licence, then why not make those vehicles available to him? The alternative explanation was that [NAME_4] and [NAME_6] had been too informal in their arrangement and that they had then been confronted with legal problems (such as the vehicle lease agreements) which they had not anticipated. The TC had “jumped” from having been suspicious about the arrangements to a finding that [NAME_8] was a “front”.

48. We cannot agree that this ground of appeal should succeed. There was little, if anything, apart from the oral evidence of [NAME_4] and [NAME_6], upon which the TC could properly conclude that despite the very material irregularities in [NAME_8] “set up”, that it was capable

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of being genuine. The TC did not find [NAME_4] or [NAME_6] to be credible or reliable witnesses and the Tribunal does not lightly interfere with findings concerning witnesses when the TC was in the best position to assess those witnesses and determine what to make of them. The Tribunal has struggled to find any positive feature that the TC could have taken into account to weigh in the balance against the overwhelming evidence that [NAME_8] was a “front”. We have no doubt that the TC undertook the appropriate analysis of the evidence and came to the correct conclusion upon it.

49. [NAME_9]’s next point was that the approach of the TC during the public inquiry and his subsequent findings in his decision were contradictory. The TC made repeated references to [NAME_8] having “operated” vehicles not only during the hearing but also in his decision. These references were at odds with the TC’s ultimate decision. [NAME_9] took the Tribunal to some relevant passages. In stating that [NAME_8] had been “operating” the vehicles, the TC then later contradicted himself by finding that [NAME_8] was not the operator of the vehicles.

50. The Tribunal indicated to [NAME_9] during the course of his submissions that we did not consider that his point was made out. The TC’s comments during the public inquiry had to be read in context. The TC’s role in a public inquiry is, by necessity, inquisitorial. He was bound to refer to [NAME_8] as “operating” vehicles whilst asking relevant questions and it would have been wrong for him to do otherwise. Such references do not preclude the TC from coming to the decision that he ultimately did, which was inevitable in the circumstances.

51. [NAME_9]’s final point in relation to [NAME_8] was that [NAME_6] was not given fair and reasonable notice about an important issue to be considered at the [NAME_8] public inquiry, namely, whether [NAME_8] was operating as a “front” for [NAME_5]. This omission from the call up letter was too serious to be overlooked. [NAME_9] went through the correspondence. The original call up letter set out issues of concern and then went onto identify the evidence that was to be considered: a copy of [NAME_46]’s statement and a copy of the TC’s decision in the [NAME_5] case. It was indicated that [NAME_4] had been called to the public inquiry as well. The second call up letter then highlighted that the TC was going to consider “possible links” with [NAME_5]. [NAME_9] took the Tribunal to the Tribunal case T/2009/517 [NAME_14] & Haroom [NAME_14] in which it was held that a call up letter lacked fairness in that at its highest, the call up letter merely mentioned the “apparent connection” with another company. Further, when [NAME_6] was giving evidence, the TC did not put his suspicions to [NAME_6]. The failure of the TC to properly identify the issue of “fronting” in the call up letters and his failure to put his suspicions to [NAME_6] were so serious that the overall decision could not be regarded as safe.

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52. We are again satisfied that there is nothing in this point. The TC’s decision in relation to [NAME_5] was enclosed with the first call up letter. Paragraph 27 of that decision could not have been clearer about the reasons why [NAME_8] was being called to a public inquiry. [NAME_16] represented [NAME_5] in that public inquiry and he represented [NAME_6] and [NAME_8]. It is not suggested that he did not appreciate the reasons why [NAME_8] was being called to a public inquiry. He is after all, a former Senior Traffic Commissioner for England and Wales. The two call up letters along with the decision in [NAME_5] and the report of [NAME_46], when taken together, made it plain and obvious that the TC was concerned that [NAME_8] was a device being used by [NAME_5] to operate more vehicles than it was authorised to do and then latterly continued to operate vehicles when it had no authority to do so. As for the submission that the TC failed to put his suspicions to [NAME_6], it is clear from pg 510 of the Transcript that the TC set out his stall as to the suspicions he had. If [NAME_6] had been in any doubt about it, then [NAME_16] would have been in the best position to advise him as to the issue and [NAME_16] would have been in the best possible position to obtain instructions and to adduce the relevant evidence to dispel the TC’s concerns. He did not do so.

53. To conclude in relation to [NAME_8] and [NAME_6], we are satisfied that neither the facts or the law impel us to allow this appeal as per the test in [COMPANY_11] & [NAME_12] v Secretary of State for Transport (2010) EWCA Civ. 695 . Neither are we satisfied that [NAME_6]’s disqualification for a period of two years was either wrong or disproportionate. This is a bad case of deceit perpetrated against the TC so as to undermine his regulatory regime. For the reasons given by the TC, an order of two years was appropriate and proportionate.

54. Turning then to [NAME_4]’s period of disqualification for three years, we agree with the TC that [NAME_4]’s wrong doing justified a lengthy period of disqualification and that three years is neither wrong nor disproportionate. However, we also agree with [NAME_9] that the TC’s approach as to when that period of disqualification commenced was in error. In his decision dated 13 August 2015, the TC determined that he would reserve his decision as to “whether” he would disqualify [NAME_4] until the conclusion of the public inquiry into [NAME_8]. He had not therefore ordered a period of disqualification for [NAME_4] at that stage. Some correspondence then passed between [NAME_16] and the TC on this subject and the TC indicated that he would “back date” any period of disqualification to the date of the revocation of [NAME_5]’s licence. We observe (and this is subject to there being full argument on the point at some future date) that there is no statutory power provided by s.28 of the Act to enable TCs to make an interim disqualification order (not that the TC purported to do so in this case). Neither does that section enable a TC to order that a period of disqualification be back dated. In any event, to hold otherwise would be in breach of the rules of natural justice. Whilst we sympathise with

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the position that the TC found himself in, rightly suspecting as he did, that [NAME_4] was using [NAME_8] as a “front” and in the circumstances wishing to defer his decision on disqualification to take account of the outcome of the [NAME_8] public inquiry, he should have disqualified [NAME_4] from the date of the second decision rather than back dating the order of disqualification. It is however clear that the TC did not intend for [NAME_4] to serve a period of disqualification for three years commencing later than 13 September 2015. In the circumstances, we are satisfied that the proportionate approach should be for the Tribunal to order that the period of disqualification of [NAME_4] be reduced by a period of two months to a period of two years, ten months and to that limited extent his appeal is allowed.

55. Save for the limited findings in paragraph 54 above, these appeals are dismissed.

Her Honour Judge J Beech 18 February 2016