Upper Tribunal Upholds Decision to Revoke Operator Licenses

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UKUT 0443 (AAC) Appeal No. T/2018/48 IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER TRAFFIC COMMISSIONER APPEALS

IN AN APPEAL FROM THE DECISION OF [NAME], Traffic Commissioner for the West of England dated 23 July 2018

Before: Her Hon. Judge J Beech, Judge of the Upper Tribunal [NAME], Specialist Member of the Upper Tribunal [NAME], Specialist Member of the Upper Tribunal

Appellant:

[redacted] [NAME]

In attendance: [NAME] and [NAME] attended as directors of both companies and on their own behalf

Heard at: Field House, 15-25 Bream’s [ADDRESS], [POSTCODE] Date of hearing: 4 December 2018 Date of decision: 21 December 2018

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that the appeal be DISMISSED

SUBJECT MATTER:- Procedural unfairness; balancing exercise; proportionality

CASES REFERRED TO:- [COMPANY] & [NAME] v Secretary of State for Transport (2010) EWCA Civ. 695.

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REASONS FOR DECISION

1. This is an appeal from the decision of the Traffic Commissioner for the West of England (“the [NAME]”) made on 23 July 2018 when he revoked the operator licences of [COMPANY] (“[NAME]”) and [COMPANY] (“[NAME]”) with effect from 23.59 on 24 August 2018 and disqualified [NAME] and [NAME] and both companies from holding or obtaining an operator’s licence for a period of two years from 24 August 2018. In addition, he found that [NAME] had lost his good repute as a transport manager and ordered that he be disqualified from acting as such for a period of two years with a rehabilitation requirement that he sit and pass the transport manager CPC qualification. The orders were made under ss 26 to 28 of the of the Goods Vehicles (Licensing of Operators) Act 1995 (“the 1995 Act”).

The Background

2. The following background information is relevant to this appeal:

a) [NAME] has held a standard international operator’s licence since 1993. The directors of the company are [NAME] and [NAME]. The transport manager is [NAME]. The [COMPANY] is situated at the Ferns, [ADDRESS], [NAME], Salisbury;

b) [NAME] was called to a public inquiry in November 2011 when its operator licence was curtailed from ten vehicles to six with immediate effect as a result of maintenance shortcomings. It’s trailer authorisation of eight remained unchanged;

c) On 7 March 2014, [NAME] was called to a preliminary hearing before Deputy Traffic Commissioner (“DTC”) Dorrington as a result of an unsatisfactory maintenance investigation and a notice of shortcomings. Whilst the DTC ordered that a public inquiry be convened, the public inquiry did not take place as a result of administrative shortcomings within the Office of Traffic Commissioner (“[NAME]”) at the time;

d) In October 2017, [NAME] attended a meeting with the Senior Team Leader at the [NAME] as a result of an unsatisfactory maintenance investigation which had taken place in June 2017. A formal warning was issued;

e) [NAME] has held a standard international operator’s licence since 1995 authorising six vehicles with six vehicles in possession. It’s [COMPANY] is that of [NAME]. [NAME] and [NAME] are the directors of the company and [NAME] is the transport manager. Company House records show that the company is in fact dormant. Nevertheless, in August 2017, [NAME] submitted a variation application to increase its vehicle authorisation from six to ten vehicles;

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f) [COMPANY] (“[NAME]”) is a freight forwarding company which operates from the same [COMPANY] as [NAME] and [NAME]. Its directors are [NAME] ([NAME]’s son) and [NAME].

3. On 4 April 2017, vehicle [ID] was directed into a check site. It was not displaying an operator’s licence disc. The driver gave [NAME]'s telephone number to Traffic Examiner (“TE”) [NAME] who was told by [NAME] that the vehicle was being operated by [NAME] and that it had just been acquired for selling on. A registered keeper check revealed that the vehicle had been registered to [NAME] since 25 January 2017. A check of the driver’s analogue tacograph charts revealed that he had been driving the vehicle since 15 February 2017 which suggested that the vehicle had been used beyond the permitted period of grace of one month. A check of [NAME]’s operator licence appeared to reveal that it did not have a margin on its vehicle authorisation. The vehicle was eventually specified on the licence of [NAME] on 1 June 2017. During the roadside check, a driver’s hours prohibition was issued to the driver for failing to record periods of other work along with a mechanical prohibition which was “S” marked.

4. On 26 July 2017, Vehicle Examiner (“VE”) [NAME] encountered vehicle registration [ID]. [NAME] had been the registered keeper of the vehicle since 1 February 2017 but it was specified on the licence of [COMPANY] and it was liveried as “[NAME]”. The vehicle was not specified on the licence of [NAME] until 4 August 2017.

5. On 4 October 2017, vehicle registration [ID] was encountered by TE [NAME]. The vehicle was liveried as “[NAME]” and was not displaying an operator’s licence disc. [NAME] spoke to the driver’s contact, [NAME], who said that the vehicle was being operated by [NAME] and that it was a lease vehicle which the company had operated from its initial registration. It was established that the vehicle unit had been locked to the [NAME] company card since 27 May 2017. It was not specified on the licence of [NAME] until 5 October 2017, the day following the encounter.

6. On 31 January 2018, [NAME] and [NAME] encountered vehicle registration [ID]. When [NAME] first approached the vehicle, it was displaying an operator’s licence disc in the name of [NAME]. The vehicle was then directed into a parking bay. By the time that [NAME] had taken over the encounter, the vehicle was displaying an operator’s licence disc in the name of [NAME] and upon closer inspection, [NAME] found three discs in the display holder, two in the name of [NAME], one of which had expired and the [NAME] disc. The driver denied swapping the discs around. He stated that he was working for “[NAME] which do their collections and [NAME], it’s all under one roof”. He confirmed that he was paid by [NAME]. When asked how many vehicles [NAME] operated, he stated “two vans, one 7.5t, five 18t and three artics out of the yard and there is two [NAME] vehicles”.

7. As a result of the encounter described in paragraph 3 above, [NAME] commenced an investigation into [NAME] and attended the [COMPANY] on

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17 July 2017 where he met [NAME]. He told [NAME] that he had just returned from holiday and then declined to assist with [NAME]’s enquiries. He said “why are you picking on us? Sarah Bell is looking into it as you are harassing us. We get fed up with having to dig up paperwork for you all the time”. As a result, [NAME] decided to send s.99ZA production letters to all three companies for the period 1 March to 30 May 2017 with a production date of 25 September 2017. On 21 September 2017, [NAME] requested an extension of time as he had been unwell. An extension of time was given to 29 September 2017.

8. [NAME] made the following observations from the documents produced by [NAME] on that date:

a) A list of all vehicles operated during the period had been requested and a list of six vehicles had been produced, including [ID] which was registered to [NAME]. However, the drivers’ reports showed that six further vehicles had been used by [NAME] during the period for which data was requested which were not present on the list: three were registered to [NAME] and three to [NAME] and in addition, there was vehicle WU17 LVX which bore the [NAME] livery and which had been locked into [NAME]’s company card during the period of data requested;

b) There was no evidence of periodic training for drivers as requested;

c) It was unclear how [NAME] was monitoring working time directive requirements and the records held for one driver contradicted his tachograph charts;

d) Vehicle insurance policy certificates were not produced as requested;

e) Digital data in RAW format was not produced as requested; digital tachograph printouts for drivers and vehicles were not produced as requested;

f) No hire agreements or subcontracting invoices were produced as requested.

As for [NAME], no documents were produced at all nor any explanation proffered for that failure. In respect of [NAME] received a letter from [NAME] stating that no documents could be produced as the company did not operate any vehicles or employ any drivers and that any vehicles that had been owned by the company in the past may have been “borrowed” to another operator without a driver.

9. Having considered all of the evidence, [NAME] concluded that he could not say that there was any distinct line between [NAME] and [NAME] and it appeared that [NAME] was operating vehicles on its curtailed licence, potentially circumventing the curtailment of the licence by utilising the capacity of [NAME], which might explain why [NAME] appeared as a dormant company on the Companies House website.

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10. In the interim, [NAME] had undertaken an investigation into [NAME] as a result of the variation application submitted by [NAME]. His report, which is dated February 2018, was marked as unsatisfactory. He had concerns about the level of control that [NAME] had over the transport operations. By way of example, [NAME] found that two of the [NAME] vehicles were displaying expired operator’s licence discs. He noted that the maintenance of vehicles operated by [NAME] and [NAME] ran “side by side” and that the two companies had been investigated three times in fifteen months with unsatisfactory outcomes. In the circumstances, he could not support the variation application. He proposed that the maintenance shortcomings should be dealt with by way of a warning letter.

The public inquiry

11. The public inquiry commenced on 4 June 2018. [NAME] and [NAME] attended and the companies and the directors were represented by [NAME], solicitor of [NAME].

12. By way of introduction, [NAME] outlined the circumstances of both companies. They had been in existence for over thirty years and were linked by common directors, transport manager and [COMPANY]. As at the date of the hearing, [NAME] had six vehicles in possession (it’s maximum authorisation) and [NAME] had three (leaving a margin of three). It was accepted that that there was no clear separation between [NAME] and [NAME] and as a result, the directors had decided to simplify their operations. The variation application submitted by [NAME] was withdrawn and the [NAME] was informed that [NAME] had made a new application to increase its vehicle authorisation to twelve vehicles which would have the effect of amalgamating the vehicle authorisations of the two companies. As for [NAME], the company was a freight forwarder which subcontracted its work to [NAME] and others. It was accepted that two vehicles had been liveried as [NAME] and that one vehicle had been registered to [NAME] “in error” by [NAME] who had acquired the vehicle. [NAME] had never operated any vehicles.

13. [NAME] was then called. He confirmed that having perused the maintenance records produced that morning for both companies, he could find little fault with them save that tyre tread depth and roller brake testing results were not recorded. A transport manager who was spending twenty to twenty five hours a week (the hours declared by [NAME] in his TM1 form for [NAME]) should have noticed the errors. [NAME] concluded that there was no separation between [NAME] and [NAME] as the maintenance records were filed together and all of the records were in the name of [NAME] and that during the previous three visits to the [COMPANY], the same problems were found. The [NAME] records were kept at [NAME]’s home and it had been “quite tricky” gaining access to all of the vehicle records. He had never met [NAME] during the maintenance investigations despite the DVSA visits having been pre-arranged. It was possible that [NAME] had been at the [COMPANY] earlier on the morning of his last visit and that he

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had left prior to his arrival. He accepted that he had been told by [NAME] that [NAME] had left because he was not feeling well.

14. [NAME] was then called and adopted his public inquiry statements. He had been unable to complete a Traffic Examiner Operator’s Report because he had not been provided with the documentation required in the s.99ZA letters. As for the encounter with vehicle [ID] on 4 April 2017, he elaborated on his public inquiry statement. The vehicle was in fact displaying a tax disc for an unrelated vehicle which belonged to [COMPANY] and [NAME] suspected that there had been an intent to deceive in displaying the disc but he did not pursue it. There was also a large crack in its windscreen. When advised of this, [NAME] had stated on the telephone “I don’t drive the thing but that isn’t a problem”. The driver did not have his driver defect report book with him and he told [NAME] that he did not use one. It was therefore impossible to say whether the cracked windscreen had been reported prior to 4 April 2017. It was put to [NAME] that on 4 April 2017, there were only four vehicles specified on the [NAME] licence and that the company had evidence to show that the [NAME] had been notified by a fax and a telephone call of the specification of vehicle [ID] on the licence. Indeed, this was the case for each of the vehicles that had been stopped. The [NAME] then expressed his concern that this information had not been produced by [NAME] prior to the hearing and as a result, called a brief adjournment for the [NAME] records to be checked. It transpired that on 4 April 2017, only four vehicles were specified on the licence. However, [NAME] was satisfied that the vehicle encountered on that day was being operated by [NAME] and that had been so since early February 2017 and that the [NAME] operator’s licence had the maximum of six vehicles specified on it. [NAME] denied that it could be assumed that the reason why the vehicle was not specified on the licence on 4 April 2017 was because of an error on the part of the Central Licensing Unit (“[NAME]”). Having considered the documents handed to the [NAME] by [NAME], he concluded that in the absence of any confirmation receipt to go with the fax, he could not draw any conclusions based upon the documents.

15. [NAME] accepted on behalf of [NAME] that vehicles [ID] and [ID] were not specified on the [NAME] licence when they were stopped and that they had all been in possession for more than one month. [NAME] accepted that if the [NAME] had been notified of the vehicles at the time of the encounters, then HX05 would have been the fifth vehicle specified and the remaining two would have been the sixth at the time of stopping. [NAME] then indicated that since the beginning of 2018, [NAME] had specified every vehicle via the VOL system and [NAME] accepted that was better than using faxes.

16. [NAME] then gave evidence. He explained that [NAME] had been in operation for thirty seven years. His father started the company and [NAME] became transport manager (an entitlement he held through grandfather rights). [NAME] was incorporated when [NAME] was awarded a contract for transporting fireworks which fell within the ADR provisions. They now sub-

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contracted that work to other operators. The directors now wanted to operate the [NAME] vehicles on the [NAME] licence.

17. [NAME] told the [NAME] that he had recently attended a transport manager refresher course and he was responsible for overseeing all vehicle operations. [NAME] ran the transport side on a day to day basis and it was proposed that he would sit his transport manager CPC in September 2018. He would then be added to the [NAME] licence as a transport manager. [NAME] confirmed that whilst the results were not recorded, all vehicles underwent roller brake testing and tyre depths were checked.

18. It was [NAME]’s responsibility to add and remove vehicles from the licence and he had done so for the last thirty seven years. The system they had always used was notification by fax which was followed up with a telephone call. He believed that when [NAME] had visited the [COMPANY], he had been shown the faxes that [NAME] had sent to the [NAME]. They now dealt with vehicle specification on-line. On the day of [NAME]’s visit, [NAME] had been at the office from 8.00am and had left at 9.00 or 9.30am, having assumed that [NAME] was not going to attend. [NAME] would be happy for the [NAME] to order an FTA audit for six months hence. He had never seen a section 99AZ letter addressed to [NAME] despite the fact that the recorded delivery notification was signed by [NAME]. There had not been any reason why the documentation would not have been sent because it was the same as that for [NAME]. He had been unaware that the documentation provided in respect of [NAME] was incomplete. In respect of the RAW drivers’ hours data, he did not think that they had any. He had assumed that the correct list of vehicles had been sent. The insurance policies were definitely in the box as were the driver card downloads. When asked what a driver download was, [NAME] accepted that he did not know what one was. As for hire agreements, [NAME] did not enter into many of those because [NAME] and [NAME] were both owned by [NAME] and [NAME]. [NAME] did not hire vehicles from [NAME] as the vehicles liveried as [NAME] were in fact owned by [NAME]. He could not say why [NAME] had not produced the digital data requested. The vehicle maintenance records were kept at [NAME]’s house for safety despite the fact that the address of the establishment was the [COMPANY].

19. It was put to [NAME] by the [NAME] that vehicle [ID] had been locked into the [NAME] company card since 27 May 2017. It was then stopped on 4th October 2017 and so it followed that the vehicle had been on the road without an operator’s licence disc for four and a half months. [NAME] considered that [NAME] was at fault because they had not chased the disc from the [NAME]. He also accepted that vehicle [ID] had been without an operator’s licence disc for six months. It was put to [NAME] that when [NAME] was stopped, the vehicle would have been the seventh in possession for [NAME]. He nodded his head but did not answer.

20. [NAME] told the [NAME] that it was his job to specify vehicles. The system he had always used was to write the changes on a piece of paper and then fax it to the [NAME]. He would then follow the fax up with a telephone call and he

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would also post a notification of the change. He had always specified vehicles in this way and once he had notified the [NAME] he would chase the discs. On the occasions that the [NAME] was considering, the chasing of discs must have slipped his mind.

21. [NAME] accepted that he should have been more polite to [NAME] when he visited the [COMPANY] but said that the [NAME] had told him that examiners should always announce their visits. [NAME] had complained to the [NAME] about [NAME]’s visit but had then calmed down. He did not have any involvement in collating the [NAME] documentation in response to the section 99ZA letter apart from the maintenance records as he was the director who was responsible for maintenance. He had not received any operator licence training because he was not the holder of the licence although he had arranged to attend a course on 6 June 2018. As for being in possession of seven vehicles, he had telephoned the [NAME] and he had been told that it was fine to specify the vehicles he had. The [NAME] then went through his calculation which led to the conclusion that seven vehicles had been operated by [NAME]. [NAME] stated that [ID] (the vehicle registered to [NAME]) was in fact used for storage and was not used very often. He then clarified his evidence by stating that vehicle was not used.

22. The [NAME] asked [NAME] when he had started to use the VOL service to specify vehicles. Mr [NAME]’s response was that he started using it in the early part of 2018. The [NAME] then produced a history of the company’s on-line access to the VOL service which revealed that [NAME] had been specifying and removing vehicles from the licence using the VOL service since 2011. The [NAME] asked Mr [NAME] whether he had been lying to him about the method he used for specifying vehicles. Mr [NAME]’s answer was that he had been lying. The [NAME] then gave the directors and [NAME] time to consider the VOL print out and then adjourned the hearing to another date so that a full history of VOL access could be provided to [NAME] along with a further call up letter.

23. The date of the reconvened hearing was 21 June 2018 at 3.00pm, the date being fixed to take account of [NAME]’s availability. On 12 June 2018, [NAME] wrote to the [NAME] requesting an adjournment. [NAME] was unavailable as a result of personal circumstances and [NAME] had been admitted to hospital. The working diagnosis was set out in the letter; it is unnecessary for the Tribunal to include that personal information in this decision. The [NAME] refused the application. He was aware of [NAME]’s personal circumstances and was “genuinely sympathetic” towards her position but another representative could, with the benefit of a transcript, continue with the hearing. The [NAME] was mindful of the new evidence heard at the previous hearing which pointed towards a finding that the operator had lied at the public inquiry and that more vehicles had been operated than were authorised. There were two directors of both companies. If the operator intended to argue that one director was unable to represent the interests of the companies, then it followed that one director was incapable of properly managing the transport operations and it therefore may been in order to suspend the licences. The [NAME] indicated that until evidence of illness was

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provided, he would not consider an adjournment to allow [NAME] to attend.

24. Immediately prior to the hearing being reconvened at 3p.m. on 21 June 2018, a number of photographs of [NAME]’s leg were sent to the [NAME] along with some clinical contact sheets. The first, dated 15 June 2018, noted that [NAME] was feeling better although he was advised to rest. A review appointment was made on 21 June 2018. The second, dated 19 June 2018, noted that [NAME] was feeling well and that he was advised to continue with his medication. His next review was booked for 9.00am on 21 June 2018. The third, dated 21 June 2018 (the date of the reconvened hearing) noted that [NAME] was feeling well in himself and that he was able to weight bear and walk for a long distance. The documentation provided to the [NAME] did not establish that [NAME] was medically unfit to attend the reconvened public inquiry.

25. At the outset of the reconvened hearing, [NAME] confirmed that the company had not produced any evidence from either a consultant or a doctor stating that [NAME] was unable to attend the hearing by reason of him being medically unfit to do so. The outcome of the review that morning was that [NAME] should rest and keep his leg elevated. She did not renew the application for an adjournment to allow [NAME] to attend although she did state that his absence left [NAME] in some difficulties because neither [NAME] or [NAME] who were attending on behalf of the companies could deal with the issue of the use of the VOL system. [NAME] accepted that [NAME] could have provided a witness statement to deal with the documentation produced by the [NAME] at the last hearing, however, the company hoped that it had identified a way forward. [NAME] accepted on behalf of the company that on 27 May 2017, [NAME] had seven vehicles in possession although it was denied that seven vehicles had been operated at any one time. Vehicle [ID] had been the subject of a [ADDRESS] notice which had been within the box of documents produced pursuant to the section 99ZA letter. The document concerned was a [NAME] record dated 10 April 2017 which recorded that the vehicle was off the road from that date following an MOT on that date. [NAME] accepted that this was the case but noted that the vehicle was not specified on the licence when it was used on 4 April 2017 and that it did not become specified until 1 June 2017. There was no analogue data produced for this vehicle by [NAME] although it was clear that the vehicle had been used when it was supposed to be parked in the yard for storage. [NAME] relied upon [NAME]’s maintenance investigation report arising from his visit on 16 June 2017 to the [COMPANY] (and referred to in paragraph 2(d) above) during which he had noted the odometer reading of the vehicle was 881,300 kms which was 5,300 kms more than the odometer reading taken on 4 April 2017 (876,012 kms). It followed that, contrary to the company’s position that the vehicle was not used, it had been.

26. The [NAME] then asked for the identity of the operator of the vehicles. [NAME] confirmed that [NAME] was the employer of all of the drivers and that

[NAME] did not have any employees.. It had always been that way. The problem was that the position had only recently become apparent.

27. In her closing submissions, [NAME] accepted that [NAME] had “got himself into a bit of a pickle” whilst giving evidence during the first hearing. It was nevertheless the case that his preferred method of changing vehicles was by fax and that his evidence was that he had used this method with the vehicles identified by the enforcement officers but those notifications had been missed by the [NAME] (the [NAME] expressed doubt that the [NAME] would have missed faxes sent by the company). [NAME] submitted that in any event it was the intention of the company that [NAME] stood down as a director of [NAME] because of his ill health and that [NAME] and [NAME] would be appointed directors in his place. The company offered an undertaking that [NAME] would not play any role in the management of [NAME]. That succession plan had already commenced and it would be escalated with [NAME] to be added as a transport manager once he had obtained his CPC. The company had also taken on another office member, [NAME], who was a driver. It was hoped that he too would obtain his CPC. [NAME] asked the [NAME] to accept that [NAME] had not lied to him during the first hearing nor was he trying to mislead the [NAME]. He had panicked under pressure and had not explained himself properly. She asked the [NAME] to allow the companies to amalgamate their fleets by increasing the [NAME] authorisation to twelve although the company did not intend operating more than nine vehicles. She asked the [NAME] to step back from revocation as that would be a disproportionate response in all of the circumstances.

The Traffic Commissioner’s decision

28. The [NAME] found first of all, that [NAME] had operated more vehicles than authorised in two respects:

a) By operating seven vehicles on its own licence in and around 27 May 2018. In coming to that determination, the [NAME] found that vehicle WU17 LVX had been used between 10 April 2017 and 27 May 2017. Six vehicles had already been specified as in possession at that time The operator contended that [ID] whilst specified, was only used for storage in the yard at this time. The [NAME] rejected [NAME]’s assertion and relied upon relied upon the DVSA evidence that the vehicle had covered 5,300kms in the ten-week period between 4 April and 16 June 2017 and the type of vehicle was such that it would have been used for more local runs;

b) By unlawfully using the [NAME] licence in order to operate vehicles in excess of its own authorisation. [NAME] did not have any employees and it did not even employ a transport manager. This was in breach of s.6 of the 1995 Act.

29. Secondly, he found that prohibitions had been issued on 4 April 2017 which were in addition to four previous mechanical prohibitions and an overloading

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conviction. As for [NAME], five mechanical prohibitions, three drivers’ hours prohibitions and two overloading prohibitions had been issued. It followed that s.26(1)(c)(iii) was made out along with s.26(10(f) in relation to both licences.

30. [NAME] had allowed its licence to be used by [NAME] and [NAME] had operated more vehicles than authorised. S.26(1)(h) was made out.

31. [NAME] appeared to largely run the operation. He had been rude to [NAME] and had failed to co-operate with his investigation. He had also lied to the [NAME] about his use of the VOL system to specify vehicles. His account about using faxes to do so was one which had been fabricated in advance of the public inquiry for the sole purpose of misleading the [NAME]. He then failed to attend the second hearing without any supporting medical evidence of his inability to do so and that failure demonstrated that he wished to avoid further scrutiny. He was not a man in whom the [NAME] could have confidence. There were positives in the maintenance improvements that the [NAME] had heard about in evidence, but his concerns were more fundamental. [NAME] was “simply totally untrustworthy”.

32. As for [NAME], his role in the operation concerned the [NAME]. He had never met [NAME] having failed to attend any of the three pre-arranged maintenance investigations. He had told the [NAME] that in relation to the response to the s.99ZA letter sent to [NAME], he had assumed that all of the information that was required had been delivered in a box to the DVSA’s Poole office. It was not. More serious still, was the failure to respond to the s.99ZA letter sent to [NAME]. [NAME] stated that he was unaware that this letter had been received even though it had been signed for by “[NAME]”, which the [NAME] took to be [NAME] who was now offered to the [NAME] as a “clean director and transport manager”. The [NAME] found that it was more likely than not that [NAME] had actual knowledge of the production letter sent to [NAME] or in the alternative, as director and transport manager, he was reckless in not making reasonable enquiries and having in place effective systems for “knowing”.

33. Further, [NAME] had supported the fabricated story given to the [NAME] by his brother in relation to the way in which vehicles were specified on the licence. As transport manager, he was required to ensure that the licence was properly managed and by failing to respond to the production letter addressed to [NAME], his good repute was forfeited as transport manager. His position was worsened by the failure to produce tachograph data and other information for [NAME] and by the lies told and supported at the public inquiry.

34. When undertaking the balancing exercise, the [NAME] categorised all of the above save for the maintenance improvements as negative features. He found the operator’s conduct was deliberate and reckless and there had been a wilful failure to provide fundamental drivers’ hours information and raw data and an attempt to deceive. The starting point for action was “severe”. In answer to the [NAME] question, the [NAME] found that it was “very unlikely” that [NAME] could be trusted to run in compliance with the regulatory regime in the future.

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As for the [NAME] question, he was satisfied that the two companies should be put out of business. He did not know how many vehicles had been operated and the operators had refused to allow their drivers’ hours compliance to be assessed. Those who evaded proper scrutiny had no place within the licensing regime; they posed a road safety risk and it was unfair on all those operators who worked hard to cooperate and comply. The two directors and the two companies had lost their good repute.

35. As for disqualification, the [NAME]’s balancing exercise considered the same matters as considered for revocation of the licences: “The lack of anything approaching honesty on the part of these operators and their directors and transport manager mean that it is necessary for them to have a period of reflection before any attempt to re-enter the industry. In the positive, this is not a case where operators have deliberately put life at risk and I take account of this in setting the disqualification period.” The [NAME] then went on to make the order set out in paragraph 1 above.

36. The Appeal

37. At the hearing of the appeal, [NAME] attended and represented themselves and [NAME]. They accepted that whilst the appeal included [NAME] as an Appellant, they “did not need it” and so the appeal was withdrawn.

38. The Govers’ relied upon the grounds of appeal previously filed by [NAME] and agreed that the twenty four paragraphs contained in that document, could in fact be distilled into four grounds of appeal. The first was that the [NAME] had erred in failing to adjourn the hearing of 21 June 2018 in the absence of [NAME] and that the [NAME], in finding that [NAME] was expected to be fully well by 21 June 2018 had misunderstood or misdirected himself as to the content of the clinical contact notes produced by [NAME]. The [NAME] should have adjourned the hearing, particularly in view of the [NAME]’s determination that [NAME] had mislead him and had lied. The Govers’ added to this ground by stating that the reason for appealing the [NAME]’s decision was that [NAME] could not attend the second hearing because he was in agonising pain and unfit to do so and whilst he had attended a review appointment at 9.00am on the morning of 21 June 2018, he could not have travelled to Bristol for the adjourned hearing scheduled for 3pm that afternoon. Whilst the contact notes recorded his appointment as lasting less than an hour, [NAME] maintained that he did not leave hospital until 11.45am.

39. The Tribunal asked the Govers’ to consider the email sent by the [NAME] in response to the written application for an adjournment dated 12 June 2018 which stated that he would not consider an adjournment in the absence of medical evidence. We asked why [NAME] did not provide such evidence to the [NAME]. [NAME] maintained that he could have obtained such evidence from a medical professional but [NAME] did not ask him to do so. Neither was he asked to provide a witness statement to be relied upon in his absence.

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40. Our starting point on this ground of appeal is that our jurisdiction is one of review and it is our function to consider the decision of the [NAME] upon the basis of the evidence that he had before him. We are in no doubt that his decision to refuse the application to adjourn the second hearing in the absence of any medical evidence as to [NAME]’s fitness to attend was plainly right. The [NAME] had adjourned the first hearing because [NAME] had admitted to lying to him and in fairness, he wanted to provide [NAME] and his brother with an opportunity to consider the full history of VOL use that the [NAME] had produced at the first hearing. The evidence of untruthfulness placed [NAME] in an extremely serious position. It was inevitable that the [NAME] would be suspicious of an application to adjourn on medical grounds without any medical evidence in support. He did however, properly highlight that he would consider such an application with appropriate evidence in support in his email of 12 June 2018. What is striking about this aspect of the case is that when the hearing of 21 June 2018 commenced, whilst the [NAME] was provided with the clinical contact notes and a number of photographs to support those notes, there was no renewed application to adjourn the hearing so that [NAME] could attend. Rather, it was accepted that the appropriate medical evidence had not been obtained and it was submitted that [NAME] had “found a way forward”. In all of the circumstances, it is unsustainable to argue that the [NAME] should have adjourned the hearing of 21 June 2018 either upon the basis of the application made on 12 June 2018 or at the outset of the hearing of 21 June 2018 when the application had not been renewed. We therefore reject this ground of appeal.

41. Grounds two and three concern the balancing exercise that the [NAME] undertook prior to determining that the Govers’ and the companies had lost their good repute and that revocation was a proportionate response. The first criticism was that the [NAME] had failed to take account of the long history of regulatory compliance of both companies. [NAME] told the Tribunal that with regard to [NAME], as the licence was no longer needed, he and his brother were “happy” for the licence to remain revoked. However, the position was different with [NAME]. It had been running for 34 years with “hardly any problems” in relation to compliance. He had been in transport for 45 years and in that time [NAME] had serviced a number of blue-chip companies such as Interserve and P&O Cruises. It was wrong for the [NAME] to simply take away his good repute in view of that background. He and [NAME] had operated their transport operation as they best could and they had employed young people in their warehouse and ensured that all employees attended all the relevant courses. He characterised the [NAME]’s decision as being “a little unfair for such trivial issues”. In answer to questions about the failure of [NAME] to produce any documents in answer to the s.99ZA letter, [NAME] stated that the failure was not important as they had made the decision to close the company in any event. The main objective was to keep [NAME] operating and he recognised that there were grounds for revoking the licence of [NAME]. He accepted that he was transport manager for [NAME]. [NAME] was taken through the case summary included in the appeal papers (summarised in paragraphs 2 and 3 above). [NAME] and [NAME] then accepted that the operating history of both companies had not been

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unblemished. As for [NAME] using the operator’s licence of [NAME], both directors thought that this was appropriate because both companies were “under one hat”. In hindsight, [NAME] should have applied to increase its authorisation prior to the DVSA investigations taking place thus making the [NAME] licence superfluous. [NAME] had to accept however, that had [NAME] applied for an increase in authorisation, it was unlikely that such an application would have been successful against the background of the curtailment in 2011 and the unsatisfactory maintenance investigations. As for the [NAME]’s conclusion that [NAME] had operated seven vehicles during the relevant period, both directors insisted that this was not the case as vehicle [ID] was used for storage and had only been used on two or three occasions during the relevant period, although the directors accepted that the vehicle should have been specified on the [NAME] licence prior to that use. The Tribunal took the directors through the evidence of [NAME] and the reference he made to the findings of [NAME] in his maintenance investigation in June 2017 (a copy of which was not included in the public inquiry papers). [NAME] did not accept that the vehicle had travelled 5,300kms between 10th April 2017 and [NAME]’s examination of the vehicle on 16 June 2017. [NAME] must have incorrectly recorded the odometer reading of the vehicle during his investigation.

42. We are satisfied that there is nothing in this point. [NAME] appear to have little understanding of the seriousness of the adverse compliance findings relating to maintenance shortcomings and the operation of unauthorised vehicles. Their lack of appreciation of [NAME]’s position may result from their uninformed view that they were entitled to operate [NAME] vehicles on the [NAME] licence as they owned both companies. However, [NAME] at the very least, as transport manager, should have been aware of the position. Further, to describe the compliance failings of both companies as “trivial” again demonstrates the lack of understanding of the importance of regulatory compliance. This was a bad case of blatant unauthorised use of vehicles owned by one limited company by another and we are satisfied that the [NAME] was entitled to conclude that the position was serious and that the starting point for regulatory action was “severe”. As for the use of vehicle [ID], the [NAME] clearly took the view that the odometer reading taken by [NAME] on 16 June 2017 was likely to be correct and it was not seriously challenged during the course of the second hearing. The evidence pointed to the use of seven vehicles during the relevant period but even if the [NAME] was wrong about that, the unlawful use of [NAME] vehicles was so serious that such use justified the ultimate determinations of the [NAME] in any event.

43. The second criticism of the [NAME]’s balancing exercise was that he failed to take account of the fact that [NAME] had already embarked upon a restructuring programme and consolidation of the two companies along with new directors and transport managers with [NAME] taking a back seat. The decision to amalgamate the two operator’s licences had followed legal advice but in any event, [NAME] was now proposing to reduce the total fleet to six vehicles and it followed that no amalgamation was required. Even if the application to increase the [NAME] licence had been unsuccessful, the [NAME] licence

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would have been surrendered and the transport operation would have used sub-contractors. The changes proposed should have been sufficient to cause the [NAME] to stand back from finding a loss of repute of the company and the inevitable revocation of the licence.

44. Whilst the Tribunal accepts that the [NAME] did not make any reference to the proposed re-structuring of the two companies when undertaking his balancing exercise, that failure is unsurprising against the background of this case and in any event, the proposals did not withstand close scrutiny. At the heart of the reorganisation was [NAME] who would remain as a director and a transport manager. The [NAME]’s finding that he had lost his good repute as a result of the regulatory failings of both companies and his support of [NAME]’s untruthful account about the specification of vehicles by fax is unassailable. In the course of the appeal hearing, [NAME] accepted he had lied to the [NAME] about that. In addition, as part of the restruturing plan, [NAME] was to become a director along with [NAME] who had registered a vehicle as belonging to [NAME] (and which was liveried as such) in “error”. [NAME] had signed for the s.99ZA letter addressed to [NAME] which, according to [NAME] had not been put before him as transport manager for [NAME]. Those features of the evidence do not instil confidence that the proposed restructuring would result in a fresh, compliant approach to the operation of LGVs in the future. We are satisfied that had the [NAME] included the proposed restructuring in his balancing exercise, his final determinations would have been the same.

45. The fourth ground of appeal concerned the overall proportionality of the [NAME]’s determinations. Both directors accepted that they had lied to the [NAME] about the specification of vehicles although [NAME] stated that he had not done so intentionally. He had not understood the importance of the issue. As for [NAME] he stated that he accepted that he was “getting too old” which was why the directors were “getting young people in”. The livelihood of thirty people was at stake but that most of them had already been laid off. [NAME] apologised for what he had done and both directors were “gutted” by the result.

46. We have no hesitation in finding that the [NAME]’s determinations on the issue of loss of good repute and the inevitable revocation of the licences flowing from are not open to criticism, neither is the implicit rejection of the re-structuring proposals put forward by [NAME]. It is difficult to envisage any circumstances in which the good repute of company directors and transport managers will be retained once it is accepted that lies have been told to the [NAME] (or indeed to DVSA enforcement officers). The regulatory position of transport operations is based upon trust and the premeditated fabrication of an account to avoid adverse findings involving directors and a transport manager so fundamentally undermines that trust that it is inevitable that a significant and serious regulatory response will result. It is suggested in the grounds of appeal that the [NAME] erred in failing to consider any alternative regulatory action short of revocation. We disagree. Loss of repute was inevitable and the [NAME] answered the [NAME] and the [NAME] questions in the only way he could

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in the circumstances. The period of disqualification of two years also cannot be categorised as disproportionate.

47. It follows that we are satisfied that the [NAME]’s approach to the issues of good repute, revocation and disqualification was neither plainly wrong nor disproportionate. Further, we are not satisfied that this is a case where either the law or the facts impel us to interfere with the [NAME]’s decision as per the Court of Appeal decision in [COMPANY] & [NAME] v Secretary of State for Transport (2010) EWCA Civ. 695 . The appeal is dismissed.

Her Honour Judge Beech 21 December 2018