Neutral Citation Number: [2010] UKUT 227 (AAC)

Appeal No. T/2010/22
IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
TRAFFIC COMMISSIONER APPEALS

ON APPEAL from the DECISION of
Sarah Bell Traffic Commissioner for the 
Western Traffic Area Dated 8 February 2010

Before:
Hugh Carlisle QC	Judge of the Upper Tribunal
Patricia Steel		Member of the Upper Tribunal
John Robinson		Member of the Upper Tribunal

Appellant:
COACHMAN TRAVEL LIMITED
and RICHARD SAUNDERS

Attendances:
For the Appellant: The Appellant Saunders appeared in person

Heard at:	Victory House. 30-34 Kingsway, London, WC2B 6EX
Date of hearing:	9 June 2010
Date of decision:	30 June 2010

DECISION OF THE UPPER TRIBUNAL
IT IS HEREBY ORDERED that this appeal by Richard Saunders be ALLOWED and that the matter be remitted to the Traffic Commissioner for her consideration

SUBJECT MATTER:	Disqualification; notice of issues and evidence

CASES REFERRED TO:	2000/6 AJ Cassels & 2009/516 Farooq Ahmed & Haroon Ahmed

REASONS FOR DECISION

1.	This was an appeal from the decision of the Traffic Commissioner for the Western Traffic Area on 8 February 2010 when she revoked the Company’s licence and disqualified its director, Richard Saunders, indefinitely.  This appeal is concerned only with the order of disqualification.

2.	The factual background to the appeal appears from the documents, the transcript of the public inquiries and the written decision and is as follows:
(i)	The Company was the holder of a standard national PSV operator’s licence for eight vehicles with two in possession.  Since 5 July 2008 Mr Saunders was the sole director of the Company.  Mr Anthony Berry was the secretary and the transport manager since 2009: the earlier transport manager was Mr Mark Westcott.  
(ii)	Concerns were raised that the changes in the Company’s directorships had not been notified to the Traffic Commissioner and that it did not possess the necessary financial standing.  In addition, it was alleged that the two vehicles with discs had been lent out to other operators.  Accordingly, the Company was called-up to a public inquiry on 7 September 2009.  Although the call-up letter refers to ss.17(1) and 17(3)(b) of the Public Passenger Vehicles Act 1981 (“the Act”) the letter is in short form and the details of the concerns mentioned is lacking: whereas detail is frequently given in an annex it appears that the only annex on this occasion was a “guide to inquiries and directions”.  The concerns set out above are taken from a submission with the brief for the public inquiry prepared for the Traffic Commissioner and it is not clear whether this document was enclosed with the letter.  However, it must be stated that the letter did warn of the possibility of disqualification.  
(iii)	The first hearing of the public inquiry took place on 6 October 2009.  It was undisputed that the Company lacked finance and that revocation on this ground was inevitable.  Mr Westcott gave evidence that he had been transport manager until 18 May 2008 when he had resigned through ill health.  He spoke to a letter which he  had written to the Traffic Commissioner on 27 September 2009 and in which he made numerous allegations against Mr Saunders and Mr A Berry.  He stated that both were under investigation by the police for theft of assets and also that Mr A Berry had lent the two Company discs to named coach operators.
(iv)	In answer to questions from the Traffic Commissioner Mr Westcott accepted that although he thought that he had resigned in May 2008 this information had not reached the Traffic Commissioner.  Mr Edward Berry was his father-in-law and had ceased to be a director of the Company in 2005, after a falling out with his brother, Mr A Berry.  Mr Westcott had himself become a director but he said that the Company was dormant, with business being carried out in partnership with Mr A Berry.  Mr Westcott had not realised that he needed to notify change of directors in a dormant company.  He had also been transport manager of the partnership but this had been dissolved in May 2008.  He was not sure what had happened to the discs because he had been unwell.  His evidence that Mr Saunders was under investigation by the police was challenged by Mr Miles, who appeared for the Company and Mr Saunders.  In answer Mr Westcott said that he had been told this by the police.
(v)	The position of Mr Saunders was explained by Mr Miles.  He said that Mr Saunders currently runs taxis.  He was thinking of moving into operating mini-buses as well.  He had acquired what he believed to be a dormant company.  He had been told that although it had a PSV licence no discs had been issued.  Subsequently he heard rumours that discs had been issued and he had spoken to Mr Miles about his concerns in July 2009.  A few days before the public inquiry Mr Miles had been handed a file by Mr A Berry and he then knew that there were problems.  Mr Saunders saw Mr A Berry regularly on a social basis and had not previously realised that there were difficulties.
(vi)	The Traffic Commissioner then referred to the evidence of Mr Westcott:-	
	“The Traffic Commissioner:	Well, I summarised Mr Westcott’s evidence, which was so far as he was concerned the limited  company was always dormant, yes there were licences and discs because they had always intended to run as a limited company at some point, but upon accountant’s advice they never had, that the licence and discs were in a filing cabinet in his office, but at all times they have traded as a partnership and the partnership dissolved in May 2008 and things got nasty.
	“Mr Miles:	Yes, we would agree that.  A point that we would like to bring up from Mr Westcott’s letter was point 7 about Mr Berry and Mr Saunders being under investigation by several police forces … or a couple of police forces.  Mr Saunders did phone the constabularies in question and ask them and he’s not ... they couldn’t answer for Mr Berry obviously, but he’s not under investigation.”
(vii)	Mr Saunders told the Traffic Commissioner that he had been asked by Mr A Berry to fund the licence renewal for the Company and had done so in July 2009.  He had understood that this was for the licence only and not for any discs.  He was asked what he knew about operator licensing:-	
	“Mr Saunders:	I’ve got a ... I’ve got a PSV, so I know a bit about it, not a great deal.
	“The Traffic Commissioner:	What a muddle you’ve got yourself in to.”
(viii)	Mr Miles explained to the Traffic Commissioner that he had found out that there were effectively three licences with 20 discs between them and these were being operated by Mr A Berry and Mr E Berry.  Mr Saunders had got caught up in this and he, Mr Miles, had advised him to extricate himself.  There was then a discussion about the identities of the other operators and their licences.  None of those present wanted to add anything when asked and the Traffic Commissioner then concluded:-	
	“The Traffic Commissioner:	I have to remind myself to use judicious language … good grief.  Well, upon the basis that no finance has been nor can it be produced because Coachman Travel Ltd. Is now no longer a legal entity as such, it’s still before me because it still has a licence but … I can make a finding under Section 17(1)(b) that it’s no longer of appropriate financial standing, but I’m not in a position to make a final decision today in relation to good repute of those involved, which are effectively actually Mr Saunders and Mr Westcott, because I just need to go away and have a think about this.
	“But also it may be that I have calls for further enquiries to be made.  And if the licence is suspended pending further investigation and/or a written decision, I’ve to think about it, if it’s a written decision you’ll have it within 28 days.  I suspect it will involve a direction in relation to the involvement of Mr Anthony Berry in future in operator licensing.
	“But apart from that I’m not in a position to deal with this now.
	“My head hurts.
	“What I will probably do, and I’m just thinking aloud now, is have calls to send a letter to Mr Anthony Berry saying in light of the information before me I am minded to make a direction with regards to his future involvement in operator licensing and give him the opportunity to come back.  In which case we may end up all coming back or I’ll come back and anyone else who want to come back can.
	“I need to go away and think about it.
	“But thank you all very much indeed for attending here today.  In case we don’t meet again, Mr Saunders, all I’d say to you is if you do want to get involved in operator licensing again, regardless of my decision, for goodness sake go on a seminar first.
	“Mr Miles:	It’s already been organised for him, Ma’am.
	“M Saunders:	Yes Ma’am.  I’m going through the right channels now, Ma’am.
	“The Traffic Commissioner: 	Well, it may be, Mr Miles bearing in mind my decision remains outstanding, you could always send in some written representations in that regard, and I will take it into account.”
(ix)	The public inquiry was reconvened on 18 December 2009 and letters to this effect were sent out.  However, the letters did not state that at the new hearing the licences of the other operators (Mr E Berry and Mr A Berry, Mr Westcott and Mr A Berry, and Mr Januszkiewicz) would also be considered.  On 7 December it was recorded by the Traffic Area Office that in a telephone call Mr Miles indicated that neither Mr Saunders nor Mr A Berry nor Mr Januszkiewicz wished to attend.  On 15 December and on 17 December it was recorded that Mr Westcott did not feel well enough to attend.  During each conversation the staff member from the Traffic Area Office said that if written submissions were sent in these would be put before the Traffic Commissioner.
(x)	At the reconvened hearing Mr E Berry attended with his daughter, Mrs Westcott, the wife of Mr Mark Westcott.  Mr E Berry gave evidence about his operating history.  During this he was highly critical of his brother, Mr A Berry, and Mr Saunders.  He said that Mr Saunders was his cousin.  He had been removed as a director of the Company by his brother but Mr Saunders had been involved:-	
	“Mr Berry:	Mr Saunders was the one who was loading the … loading the gun and my brother was firing the bullets.  That’s what it boiled down to.
	“The Traffic Commissioner:	Even in 2005?
	“Mr Berry:	Yes.”
	Mr E Berry alleged that Mr Saunders was “operating two 16-seater mini-buses ….. illegally”.  He said that VOSA had been after him “for a long time but they never catch him”.  He said that “Mr Saunders is very good at telling what he wants you to know: he’s very good at manipulating people”.
(xi)	The Traffic Commissioner said that it was Mr E Berry who had alerted the Traffic Area Office and he said that he could see that the Company “was going into bad hands”.  He had been sent a copy of the transcript of the first hearing and was asked what he thought of Mr Saunders’ evidence:-	
	“Mr Berry:	To me it’s nothing but a load of … it’s a load of lies from word go.  It’s a load of garbage.
	“The Traffic Commissioner:	I don’t recall anybody mentioning last time that Mr Anthony Berry and Mr Saunders were cousins.  Is it something they try and keep quiet?”
	Mr E Berry then said that he had recently spoken to Mr Miles who had advised him not to attend the public inquiry.  Mr Miles had said that Mr Berry could “stir up a lot of trouble for us”:-
	“The Traffic Commissioner:	So it’s when you mentioned that Mr Saunders was a cousin Mr Miles said this could stir up trouble?
	“Mr Berry:	Yes, he said don’t mention that, he said it could stir up trouble.  I said, well, no, I haven’t said anything.
	“The Traffic Commissioner:	Is he a direct cousin or?
	“Mr Berry:	Yes, he’s a first cousin.
	“The Traffic Commissioner:	On your father or your mother’s side?
	“Mr Berry:	My father’s side.”
	Mr E Berry later said that he thought that the Company’s discs had been lent out to other operators “but that’s only hearsay”.
(xii)	Mrs Westcott asked if she could say something and then made allegations about Mr Saunders’ personal conduct.  
(xiii)	The Traffic Commissioner gave a written decision dated 8 February 2010.  When considering the evidence she stated:-		
	“I found both Mr Edward Berry and Mr Westcott to be credible witnesses and I accept their evidence in its entirety.  Having made that finding, I have real concerns over the veracity of the evidence of Mr Saunders and the role of Mr Miles.  Neither gentleman was at the Public Inquiry on 18 December 2009 to answer any questions but they were aware who was called to the Hearing on that date and chose not to attend.  Having found Mr Edward Berry and Mr Westcott credible witnesses, it follows that Mr Saunders, Mr Anthony Berry and potentially Mr Miles have consequences to face.
	“Mr Saunders in his evidence set out his connection with Mr A Berry as one of “social”.  He failed to disclose the close family connection, namely that they were first cousins.  Mr Saunders put it to me throughout his evidence that the relationship was at arms length.  Clearly it was not so and there has been a material non-disclosure.  Further, it is alleged Mr Miles encouraged Mr Edward Berry not to make that disclosure on 18 December 2009.  In my judgment this is a serious matter.  Where transport consultants represent clients at Public Inquiry they do not have the same professional ethics as those who are legally qualified, but there is a position of trust as between the transport consultant and the Traffic Commissioner.  Mr Miles shall be written to under separate cover to clarify has position.”
	She went on to find that Mr Westcott had lost his repute but made no directions adverse to him.  The Company’s licence was revoked under s.17(1) of the Act but the only basis for this in the decision is the reference to “the Company being no longer of the appropriate financial standing”.  Save as set out below, there is no reference to loss of repute by the Company or by Messrs A Berry or Saunders, although it may be that this should be inferred.  The Traffic Commissioner concluded:-	
	“In light of my findings, in my judgment, it is appropriate and proportionate that Mr A Berry and Mr Saunders are disqualified indefinitely pursuant to Section 28 of the 1995 Act (sic).  Whilst it is open to them to apply for the disqualification to be lifted they will face a high hurdle in persuading a Traffic Commissioner that their repute has been regained.”
	At the end of the decision she added an addendum:-	
	“I am grateful to Mr Edward Berry for the clarity of his evidence and his reputation remains very much intact.”
(xiv)	In his notice of appeal dated 11 March 2010 Mr Saunders alleged that Mr E Berry’s evidence was “a complete fabrication and completely false”.  He had understood at the public inquiry on 6 October that he did not need to attend the reconvened hearing.  

3.	At the hearing of the appeal Mr Saunders appeared in person.  He repeated that he had understood that his attendance at the second hearing was unnecessary.  He had paid Mr Miles his fee for helping him at the first hearing and Mr Miles was not acting for him thereafter: he could not understand the reference to “my client” in the note of the telephone call of 17 December.  He said that it was nonsense for Mr E Berry to say that Mr Saunders was his cousin.  He was not a first cousin nor even a fourth cousin.  It was not correct that he had lied.  He had never seen any discs issued in the Company’s name.  

4.	Mr Saunders told us that he was unaware that Mr E Berry was likely to give evidence at the second hearing.  He had thought that the Traffic Commissioner had been sympathetic to him at the first hearing and that he had indicated that he intended to go on a day’s course to familiarise himself with operating requirements.  He told us that the Traffic Commissioner’s finding that Mr E Berry’s repute was intact made him “wild” since he thought that Mr E Berry had previously had a licence revoked.

5.	Our first comment about this case is that we think that the original call-up letter was inadequate in that it failed to give notice of the allegations which were to be the subject matter of the public inquiry.  However, no point on this was taken at the time and the allegations did become apparent.

6.	The Traffic Commissioner’s comments at the end of the first hearing were indicative of her then state of mind.  It is noteworthy that she mentioned that she might disqualify Mr A Berry and that it would be necessary to send a warning letter to him.  As far as we know, this warning was not sent although she did eventually make an order against him.  As can be seen, her attitude towards Mr Saunders was different and we think that he could reasonably have thought, if the subject was in his mind at all, that an order for disqualification against him was unlikely.  

7.	We have only briefly mentioned the evidence at the second hearing but it is apparent both that this constituted a detailed attack on Mr Saunders and that Mr E Berry made a favourable impression on the Traffic Commissioner.  We have no quarrel with any of this so far as it went, subject to the point that Mr E Berry’s evidence was not tested by cross-examination, but have to say that in the light of the history it was necessary for Mr Saunders (and for that matter Mr A Berry, if it were not done) to be given notice of the evidence and of the Traffic Commissioner’s intention to consider disqualification before she went on to make the order itself.  The best course would have been to sent out a transcript of the second hearing but a summary of the evidence would have been sufficient.  Representations should have been invited, together with an opportunity for oral evidence if requested.

8.	As the Tribunal stated in 2000/6 AJ Cassels “an order of disqualification is a significant infringement of rights and the Tribunal has repeatedly stated that the procedures must be properly addressed”.  There are similarities with the recent case 2009/516 Farooq Ahmed & Haroon Ahmed in which the Tribunal stated that “essentially the position is one of fairness”.  We think that Mr Saunders’ reaction as made to us is a good indicator of the position.  We emphasise that we express no view on the merits but we are satisfied that the decision cannot stand.  Accordingly, we allow the appeal and set aside the order of disqualification.  The case is remitted to the Traffic Commissioner for her consideration.  If she is minded to pursue the matter we direct that a fresh call-up letter  be sent, with clear allegations, and that the hearing itself be conducted by a different traffic commissioner or deputy.

Hugh Carlisle QC
Judge of the Upper Tribunal
30 June 2010