Neutral Citation Number: [2010] UKUT 224 (AAC)

Appeal No.  T/2010/15
IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
TRAFFIC COMMISSIONER APPEALS

ON APPEAL from the DECISION of
Beverley Bell Traffic Commissioner for the 
North Western Traffic Area Dated 27 January 2010

Before:
Hugh Carlisle QC	Judge of the Upper Tribunal
George Inch		Member of the Upper Tribunal
John Robinson		Member of the Upper Tribunal

Appellant:
GAP CONTAINER SERVICES LIMITED
and FREDERICK WILLIAM EVANS  

	 
Attendances:
For the Appellant: James Backhouse, of Backhouse Jones, solicitors for the Appellants

Heard at:	Victory House, 30-34 Kingsway, London.  WC2B 6EX
Date of hearing:	10 May 2010
Date of decision:	25 May 2010

DECISION OF THE UPPER TRIBUNAL
IT IS HEREBY ORDERED that the appeal by the second Appellant, Frederick William Evans, be ALLOWED but that the appeal by the first Appellant be DISMISSED, with termination of the interim licence taking effect at 2359 hours on 8 June 2010	.

REASONS FOR DECISION

1.	This was an appeal from the decision of the Traffic Commissioner for the North Western Traffic Area on 27 January 2010 when she refused the Appellant Company’s application for a standard national operator’s licence on the grounds of lack of repute and of professional competence, contrary to s.13(3) of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”).  

2.	The factual background to the appeal appears from the documents and from the written decision of the Traffic Commissioner and is as follows:
(i)	The Appellant Company was incorporated on 20 February 2003.  It supplies containers to the transport industry and has successfully traded for a number of years.  Mr Graeme Eglinton is the sole director.  He was also the sole director of Hi-Way Transport Limited (“HTL”) which had been the holder of a standard national operator’s licence since 12 June 2003, authorising seven vehicles and seven trailers and with an operating centre at premises at Simonswood Industrial Park, Kirkby, Liverpool.
(ii)	HTL was called-up to a public inquiry in 2004 and then received a warning as a result of maintenance failures.  In the period 10 May 2008 to 28 May 2009 12 prohibitions notices were issued against HTL.  Since 2004 HTL had become substantially indebted to HMRC in respect of corporation tax and VAT.
(iii)	The Appellant Company had used HTL as its haulage contractor but as a result of HTL’s problems and of a new contract which did not permit subcontractors Mr Eglinton decided to apply for an operator’s licence in the Appellant Company’s own name.  He did so on 24 February 2009.  This application proposed that the second Appellant, Mr Evans, would be the transport manager.  The accompanying form, signed by both Mr Evans and Mr Eglinton, stated that he would work for the Company for eight hours a day for five days per week.  A contract of employment was also enclosed and this provided that Mr Evans would earn £30,000 pa: the employment was stated to have started on 23 February 2009 and the form had been signed by both men on that date.
(iv)	On 28 May 2009 two vehicle examiners, Mr Fawcett and Mr Barnes, carried out a maintenance investigation into HTL at one hour’s notice.  They found that HTL was now using an operating centre at premises at Hammond Road, Knowsley, Liverpool; this change of operating centre had not be notified to the Traffic Commissioner.  Two delayed prohibition notices were issued and the investigation’s conclusion was that HTL’s maintenance was unsatisfactory by reason of no regular brake testing; no forward planner for the trailers; lack of adherence to declared inspection frequency; lack of detail on driver defect reports; and the new prohibitions.
(v)	During the course of the investigation Mr Fawcett saw both Mr Eglinton and Mr Evans and was assured that “there is a full time CPC qualified transport manager employed by the Company to manage the fleet operation”, as mentioned in the contemporaneous VOSA report dated 3 June 2009.  Mr Fawcett did not oppose the grant of an interim licence to the Appellant Company on maintenance grounds and so informed the Traffic Commissioner.  Accordingly, on 7 June 2009 she granted an interim licence for five vehicles and five trailers.  Mr Eglinton had taken over the drivers and vehicles from HTL, which went into liquidation on 20 July 2009: the insolvency report revealed that large sums of money were owed to HMRC.
(vi)	The results of the investigation were sent to the Appellant Company and it was asked for its comments.  On 13 July 2009 Mr Eglinton replied.  When referring to the need for inspection at agreed intervals he stated:-
	“I can only accept responsibility for the gaps in the agreed inspections intervals.  I find this was due to bad management on my behalf and an understaffed office, which has now been rectified by the Company employing a full-time transport manager.”
(vii)	Both the Appellant Company and HTL were called-up to a public inquiry which took place on 22 January 2010.  VOSA was not represented because the vehicle examiners’ report was not in dispute.  Both Mr Eglinton and Mr Evans gave evidence.  When referring to HTL Mr Eglinton said that his previous transport manager had left and that HTL had “operated without a transport manager for a couple of years”.  During the course of the public inquiry both men admitted that contrary to the documents Mr Evans had not started work for the Appellant Company until September 2009, with part of his work including driving.  Although it was asserted that his earnings had been £30,000 pa. this was not supported by the Company’s bank statements which indicated that he had received the same income as the other drivers.  Eventually both men accepted that Mr Evans had been paid only at drivers’ rates.
(viii)	The Traffic Commissioner reserved her decision and on 27 January 2010 gave it in writing.  After setting out the history and the evidence she found that Mr Eglinton and Mr Evans had not been honest with her:-
	“44.	I find as a fact that both the TM1G and the accompanying statement of employment that were submitted with the licence application for Gap Container Services in February 2009 were submitted for the purpose of intending to mislead my staff and myself into wrongly thinking that Fred Evans was employed as a full time transport manager when in fact he was employed full time elsewhere.  I reject Mr Eglinton’s and Mr Evans’ evidence that there was no intention to mislead and that it was just a “mistake”.
	“45.	I find as a fact that I was misled into granting an interim authority for 5 vehicles and 5 trailers as a direct result of that false information being provided in support of the application.  
	…..
	“47.	I find as a fact that both Graeme Eglinton and Fred Evans were not honest with me when they gave their evidence in support of their application.  By way of example they both told me initially that Fred Evans was paid £30,000 per annum as a transport manager when this was patently untrue and he was being paid £300 per week plus £20 per day when he drove.  It was only in the face of incontrovertible evidence that Fred Evans eventually admitted that he had lied to me and even then Graeme Eglinton did not concede any dishonesty.”
(ix)	The Traffic Commissioner found that HTL, Mr Eglinton and Mr Evans had lost their repute.  She concluded:-
	“53.	I am entirely satisfied that the applicant company Gap Container Service Ltd through both its director and its proposed transport manager (whom I hold equally responsible) cannot be trusted to tell the truth and so cannot be trusted to operate commercial vehicles and employ commercial drivers either safely or in fair competition.
	“54.	I am satisfied, so that I am sure, that neither the applicant operator Gap Container Services Ltd nor the proposed transport manager Fred Evans nor the sole director Graeme Eglinton satisfy the repute requirement and so the application must fail.  Indeed I deem it entirely proportionate that Gap Container Services Ltd should be put out of a business that it has obtained by deception thereby taking work away from legitimate operators who do comply with the licensing regime.
	“55.	I find as a fact that the applicant company Gap Container Services Ltd cannot fulfil the professional competence requirement as a result of the loss of repute of the proposed transport manager Fred Evans.
	“56.	The application is therefore refused and the interim licence now ceases in accordance with section 24(6) of the 1995 Act which states that the interim licence shall terminate on the date on which the application is finally disposed of.”
(x)	The Traffic Commissioner also revoked HTL’s licence pursuant to ss.26(1)(c)(iii), 26(1)(e), 26(1)(f), 26(1)(g), 26(1)(h), 27(1)(a), 27(1)(b) and 27(1)(c) of the Act, with immediate effect. 
(xi)	The Appellant Company consulted Mr Backhouse and in its notice of appeal dated 12 February 2010 it submitted that the Company should have been granted an adjournment, with a new call-up letter then being sent:-
	“The failure to adjourn in this way prevented the Appellants from properly considering their position and having time to prepare their representations to the Traffic Commissioner.  This lead to the Appellants giving evidence in response to serious and new areas of concern on the hoof which, in turn, - the Appellants accept this was wrong – led to them giving answers that they thought the Traffic Commissioner wanted to hear instead of the accurate considered answer.  In doing this they perpetuated the misleading impression that the 2nd Appellant as Transport Manager was receiving £30,000 pa.”
(xii)	When the appeal documents were sent to the Tribunal the Traffic Area Office stated that no transcript was available by reason of a faulty machine.  However, the Traffic Commissioner’s manuscript notes of the hearing were provided, with a typed copy.  

3.	At the hearing of the appeal Mr Backhouse represented the Appellants.  He made three points on their behalf.  First, that Mr Evans as transport manager had not received notice that his repute was in issue.  Second, that the lack of a transcript was fundamental and prevented the Tribunal from carrying out a proper review.  And, third, that the call-up letter had not properly referred to the issues.

4.	As to the lack of notice to Mr Evans, Mr Backhouse referred us to paragraph 15(1), Schedule 3 of the Act:-
	“15(1)	A traffic commissioner shall not in any proceedings under this Act make a finding that a transport manager is not of good repute or is not professionally competent unless the commissioner is satisfied that the transport manager has been served with a notice –
	(a)	stating that the question whether he is of good repute or (as the case may be) professionally competent is an issue in the proceedings;
	(b)	setting out the nature of the allegations against him; and
	(c)	stating that he entitled to make representations under this paragraph within 28 days …..”
	The papers do not contain a notice sent to Mr Evans.  The call-up letter to the Appellant Company refers to him where it states that Mr Evans is “requested” to attend the public inquiry because he may be required to give evidence.  There is no suggestion anywhere that he was personally on risk of an adverse finding.  If this matter had been raised at the public inquiry by the Traffic Commissioner and if the need for formal notice had been mentioned it may be that Mr Evans would have been content for the proceedings to have continued; but in this event we would have expected this transaction to have been referred to in the written decision.  In the result the finding made against the second Appellant is set aside and the appeal by him is allowed.  It follows that we also set aside the order made against the Appellant Company in respect of loss of professional competence.  

5.	(We note that in the footnote to her written decision the Traffic Commissioner directed that the licence held by Mr Evans in his own right “be called to public inquiry unless Mr Evans wishes to surrender the licence” …..  In the light of our conclusions it is open to the Traffic Commissioner now to call Mr Evans to a public inquiry and to put his repute in issue, with all the matters considered at the public inquiry on 22 January 2010 being raised, both in respect of his own licence and of his conduct as transport manager of the Appellant Company.)

6.	We deal with Mr Backhouse’s other points together.  He submitted that the way in which the hearing before the Traffic Commissioner unfolded required that she should have granted an adjournment of her own volition.  She was dealing with both the Appellant Company and HTL and had to consider them separately.  Mr Backhouse accepted that the Appellant Company’s position was one of an applicant for a licence, where the burden of proof remained on the applicant throughout, but submitted that the way in which the case had developed had put his clients under unreasonable pressure.  He accepted that the various documents mentioned were listed in the call-up letter and that the Traffic Commissioner’s findings all arose from the evidence given at the hearing but submitted that an adjournment should have been ordered once the position adverse to the applicants had arisen.  He said that it was the witnesses’ underlying frankness which had been used against them: this was unfair and they ought to have had the opportunity to have taken stock of the situation.  He said that it was not possible properly to review what had occurred or to consider proportionality without a transcript.  In the circumstances its absence was fundamental.  

7.	We do not think that Mr Backhouse went so far as to submit that a transcript was essential in every appeal and we note that the Tribunal Procedure (Upper Tribunal) Rules 2008 repeat the previous provision by which the Traffic Commissioner is required to provide his notes of the public inquiry if no transcript is produced (see para.3, Schedule 1, 2008 Rules).  Although there may be appeals where the absence of a transcript is fundamental we are satisfied that this is not such a case.  The written decision was made shortly after the hearing when all matters were in the Traffic Commissioner’s mind and it fully sets out the issues and analyses the evidence.  The evidence given by Mr Eglinton and Mr Evans is not in dispute, with it being accepted that this was given “on the hoof”.  The Traffic Commissioner had to evaluate this evidence and to come to her conclusions.  She has done so with clarity and we have to say that any other result would have been surprising.  We think that the finding of lack of repute was fully made out.  Accordingly, the appeal against the finding of lack of repute by the Appellant Company is dismissed.  Insofar as Mr Eglinton appealed personally that appeal is also dismissed.

8.	The interim licence granted to the Appellant Company will terminate on the date on which the application is finally disposed of (see s.24(6) of the Act).  In view of the circumstances in which the interim licence was obtained we direct that our orders shall take effect at 2359 hours on 8 June 2010.  

Hugh Carlisle QC
Judge of the Upper Tribunal
25 May 2009