Neutral Citation Number: [2011] UKUT 133 (AAC)
Appeal No.  T/2010/89
IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
TRAFFIC COMMISSIONER APPEALS

ON APPEAL from the DECISION of Lester Madrell
Deputy Traffic Commissioner for the 
Western Traffic Area Dated 17 November 2010

Before:
Frances Burton, Judge of the Upper Tribunal
Patricia Steel, Member of the Upper Tribunal
David Yeomans, Member of the Upper Tribunal

Appellant:
			DAVE THOMPSON TOURS LIMITED

	 
Attendances:
For the Appellant:          Paul Carless

Heard at:	Victory House
Date of hearing:	25 February 2011
Date of decision:	24 March 2011

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that this appeal be ALLOWED.  The fleet will be curtailed to 5 vehicles with effect from 30 April 2011, by which date the Appellant will produce to the Traffic Commissioner full up to date financial evidence in support of this authorisation. All the existing undertakings will be continued indefinitely.  A new condition will be added to the licence that Mr D Thompson will not undertake any driving  without the introduction of additional management changes to be approved by the Traffic Commissioner so as to replace Mr Thompson’s management function in the business.  

REASONS FOR DECISION

1.	This was an appeal against the decision of the Deputy Traffic Commissioner for the Western Traffic Area dated 17 November 2010, when he revoked the Operator company’s standard international PSV operators licence under s.17(1) and Schedule 3 of the Public Passenger Vehicles Act 1981 on a finding of loss of repute of both the Operator company and its Transport Manager, David Arthur John Thompson, who was also one of the two Directors of the Operator company.  The DTC also revoked the licence under s.17(1) on a finding of loss of professional competence; and also revoked the licence under s.17(1)a, 17(1)(aa) and 1(c). Under s.28 of the Transport Act 1985 as amended he  disqualified the Operator company for 6 months from 1 January 2011 and disqualified the Director and Transport Manager, David Arthur John Thompson, from obtaining or holding a PSV licence for the same period; and the other Director, Elizabeth Humphrey, for 3 months from the same date of 1 January 2011.
2.	The factual background appears from the documents, the transcript of the public inquiry and the written Decision of the Deputy Traffic Commissioner and is as follows.
(i)	The Operator company had held a standard international PSV licence since 23 October 2002, although the business had apparently started in 1999, and 10 vehicles were authorised. The operator had been called to a public inquiry (for poor maintenance and  prohibitions) and as a result, on 19 January 2009, undertakings had been given on a whole list of key maintenance obligations. These were in respect of pre-planned 6 weekly safety inspections, properly completed and signed off PMI reports retained for at least 2 years, PMI checks before any use of new or hired in vehicles, a nil defect daily driver reporting system, with reports retained for at least 2 years. Also required were involvement of management in these inspections when the vehicles were at base, rolling brake tests every 6 months, with records kept for at least 2 years, pre-MOT inspections with records kept for at least 2 years, and a training programme on driver defect reporting, implemented and completed by 30 April 2009, with records kept for at least 2 years. There was also an obligation to report any failure to observe these undertakings to the office of the Traffic Commissioner without delay, at the same time providing an explanation, if inability to comply with any item was beyond the operator’s control.
(ii)	The Operator was again called to a public inquiry in 2010 following an unsatisfactory maintenance inspection on 18 March 2010, which was in connection with an application to increase the authorised number of vehicles. The Vehicle Examiner, Mr Duncan Lowe,  had found inadequate maintenance facilities, including no undercover maintenance facilities,  only a portable generator for electricity, no air tool provision, excessive PMI intervals (8, 9, 12 and even 17 week intervals), 3 instances of newly acquired vehicles which had not had PMI inspections before use, only partially effective drivers defect reporting systems, inspections omitted from the forward planner and 2 prohibitions issued (for a loose seat belt bolt and a hazardous fuel leak). Also, although the annual test rate had improved some failures were owing to items that a thorough check would have revealed. Mr Lowe concluded “The operator is fully aware of what records to keep and his Driver Defect Reporting System has improved from last time, but he has had an operator’s licence for almost 8 years and we are still having problems with it”.
(iii)	The public inquiry took place on 2 November 2010 at Bristol. The operator company was represented by Mr Paul Carless. Mr Thompson gave evidence in response to the VOSA report on the deficiencies found on the visit. Mrs Humphrey attended but gave no evidence, as Mr Thompson explained she was the Operator company’s secretary, and took no part in management, since he took care of all that section of the work, with a manager and a mechanic. Mr Lowe gave evidence that he had visited the operator 5 times and had been well received. He added that there had been some improvement although some vehicles (those on hire from Scania) were only having 9 week inspections as that was provided for in the contract for those vehicles. He had found that the maintenance facilities were improved, in a new location, and the Driver Defect Reporting system was working properly.  He commented that the records he saw were all completed correctly.
(iv)	Mr Thompson accepted that he had not complied with all the 2009 undertakings, e.g. only the Scania vehicles had rolling brake tests, and no vehicles had pre-test checks, or pre-use PMI checks in the case of newly acquired vehicles. The unqualified (but time served and experienced) Traffic Manager had undertaken the training of drivers in the correct procedures for completing driver defect reports. A fitter had been engaged, who was an automotive engineering graduate aged 39, and Mr Thompson was confident that standards would now be entirely satisfactory. He submitted that if the fleet was curtailed some contracts would be lost but a suspension would be as bad for their business – which was basically transport for holidays abroad and in the UK – as revocation would be. Mr Carless submitted that revocation would be entirely disproportionate as some of the 2009 undertakings had been observed and the prohibitions were not of a dangerous type. 
(v)	The Deputy Traffic Commissioner gave credit for lack of convictions, recent improvements and for other factors (such as Mr Thompson’s willingness to go on an Operator Awareness Course) but said in his decision that, having observed Mr Thompson and heard from him at the public inquiry, he had no confidence that he would do what he said he would, because he had failed “over a sustained period” to observe both undertakings and his responsibilities as a Director of the Operator company and as Transport Manager. The DTC concluded that this conduct was “so bad” that, on the basis of the principle in Bryan Haulage, the operator deserved to be put out of business.  He then made the orders referred to in paragraph 1 above.
3.	At the hearing of the appeal the Appellant was again represented by Mr Carless, who submitted that there were inconsistencies in the Decision. He said that the Decision did not reflect the condition of the operator on the day of the PI. In cross-examination at that hearing much had emerged indicating the presence of improvements, such as in the annual test results, the prohibitions were not “S” endorsed, and apart from the fuel leak the only other item had been the seat belt bolt. He took exception to the fact that the Vehicle Examiner had not examined any vehicles on his visit which had been the subject of the VOSA report because, apparently, his manager “had to get back to another appointment”. He said he had never seen such a comment in a VE’s report before. He submitted that Mr Thompson had relied on the fitter for observation of some of the undertakings and that he should not lose his licence for this, as some lesser action would have been appropriate. In any case, he submitted, there was now the new highly qualified and experienced fitter (already in post at the PI) and there was also a new workshop which he considered should at least have “given the DTC pause”  (ie for thought about the appropriate disposal).
4.	Mr Carless also submitted that it was wrong of the DTC to dismiss all prospect of Mr Thompson’s rehabilitation. He was only 57, in Mr Carless’ view, not “57 and unlikely to change” which was the DTC’s perspective. He had made considerable efforts to comply, and his problem had been an incompetent fitter, although the DTC had criticised him for blaming the fitter. Mr Carless also submitted that the DTC had made too much of his “surprise” that Mr Thompson himself drove 2-3 days a week, although Mr Carless had in submissions acknowledged that this was not ideal management practice in an operator, but the DTC had not in fact pursued this point (whatever his precise objection to it was as he had not articulated that at the PI or in his Decision). He submitted that the Decision overall was too harsh and disproportionate. There was now a new Transport Manager in post and the fleet could have been cut to 5 vehicles. He queried whether it was really necessary to take away Mr Thompson’s repute as Transport Manger and whether requiring him to go on a course would have achieved anything as perhaps a period of reflection on the achievements that had been reached and those improvements which still needed to be achieved might have been more appropriate. What was really required was to give him a chance to show what he could do with a smaller fleet and the new facilities and fitter.
5.	We noted that there were no pictures of the new workshop in our file and were surprised that the DTC had apparently not had such useful evidence before him, either in connection with the VE’s report or the VOSA PI evidence or elsewhere.  As a result we could not be clear that he had taken this evidence into account from the sole source of the VE’s comments. We were also surprised that the DTC’s Decision states that the VE’s failure to inspect any vehicles on his visit to make the Report which led to the PI would be resolved “in favour of the Company”. We were unclear what this meant. We also did not understand why the DTC did not trust the Appellant, i.e. in this case Mr Thompson, the Operator company’s effective Director, and distrusted him to the extent that he feared Mr Thompson was “a risk” likely to cause “actual danger or worse” unless put out of business.
6.	We noted that the financial evidence, heard in camera as is usual, would have justified a fleet of 5 vehicles, and that Mr Carless had proposed a condition on the licence, if the Appellant company had retained it, that Mr Thompson should not drive but remain at base able to deliver hands on management. 
7.	In coming to our decision we took into account that at the date of the pubic inquiry the following had been undertaken: the employment of a new Transport Manager, the training of drivers by the experienced Traffic Manager, Mr Neil Williamson, in completion of defect reports, a new covered workshop was in use and a fully qualified fitter had been employed.  We also noted that there had been no convictions and that the defects reported were not “S” marked.  
8.	In the circumstances we consider the revocation and disqualification would have been appropriate if no progress had been made by the date of the pubic inquiry.  In view of the position in October and the DTC’s determination that the fact that no maintenance inspection had been carried on the VOSA visit should be counted in favour of the operator, we feel the decision did not meet the Byan Haulage test in establishing that the company should be put out of business.  We allow the appeal but substitute our own decision in place of those orders which we consider inappropriate. 
9.	The fleet will be curtailed to 5 authorised vehicles, all the undertakings will be continued indefinitely, and a new condition added that Mr Thompson undertakes no driving at all without the introduction of further management changes, to be approved by the Traffic Commissioner, so as to ensure his management presence at base for the whole working week until further notice.  The repute of Mr Thompson as Transport Manager is in our judgment tarnished. Further, the Tribunal requests that there shall be another VOSA inspection within 6 months of our Decision and the Appellant is to produce up-to-date financial evidence to the Traffic Commissioner by 30 April 2011.  The Tribunal recognises that trust between the operator and the Traffic Commissioner has been questioned, and its Decision is intended to enable the operator to show clearly to the Traffic Commissioner that the company can meet the required standard in future.

Frances Burton
	Judge of the Upper Tribunal
	24 March 2011