Neutral Citation Number:  [2013] UKUT 0185 (AAC)	Appeal No.  T/2012/72

IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
TRAFFIC COMMISSIONER APPEALS

ON APPEAL FROM THE DECISION OF SIMON EVANS,
DEPUTY TRAFFIC COMMISSIONER for the NORTH WESTERN TRAFFIC AREA 
DATED:  4 December 2012

Before:	Judge Alan Gamble, Judge of the Upper Tribunal
		George Inch, Member of the Upper Tribunal
		John Robinson, Member of the Upper Tribunal

Appellant:	WALTON  COACH  HIRE  LIMITED

Attendances:     
For the Appellant:	Mr T Sasse, Barrister

Heard at: Victory House, 30-34 Kingsway, London
Date of hearing: 15 March 2013	
Date of decision: 15 April 2013

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that the appeal is ALLOWED to the extent that:
The Condition that was recorded at the Public Enquiry will be amended as follows: “The Condition on the licence that relates to fleet size varied by a reduction from 20 vehicles to 17 vehicles with effect from 23.59 on 9 May 2013. This reduction will remain in force until 15 March 2014 at the earliest.”
The first sentence of the second Undertaking that was recorded at the Public Enquiry will be amended as follows: “Maintenance systems, maintenance documentation and vehicle inspections will be audited by a transport  consultant of repute in June 2013 and December 2013.”
An additional Undertaking will be added to the effect that: “In twelve months from 15 March 2013 a further  inspection of the Company’s maintenance arrangements will be carried out by VOSA.”

The Traffic Commissioner’s decision in respect of the appellant is otherwise confirmed.

REASONS FOR DECISION

1.	This is an appeal by the appellant company, (the Company), against the decision of the Deputy Traffic Commissioner for the North Western Traffic Area dated 4 December 2012.  By that decision the Deputy Traffic Commissioner varied the condition in the Company’s  Standard International Public Service Vehicle Licence relating to fleet size by reducing it from twenty vehicles to fifteen vehicles for an indefinite period.  In addition the following undertakings by the Company were recorded:

1.	The operator will undertake a random audit of at least one driver per week to ensure the drivers are undertaking their walkround checks correctly.  The findings will be recorded and made available to staff from VOSA or the Office of the Traffic Commissioner on request. 

2.	Maintenance Systems, maintenance documentation and vehicle inspections will be audited by a Traffic Consultant of repute in December 2012 and June 2013.  Audit Reports will be prepared, acted upon and retained for at least two years.  A copy of the Report will be forwarded to the Traffic Area Office within fourteen days of its receipt together with the operator’s proposals for implementing its recommendations. 

3.	Mrs Jill Atherton to be added as an additional Transport Manager within thirty days.  

2.	At the hearing the company was represented by Mr T Sasse, Barrister.  Mr P J Walton, a Director of the Company and Mrs M E Walton also a Director of the Company and its Transport Manager were present. 

3.	In his written confirmation of his oral decision, the Deputy Traffic Commissioner founds his decision on the issue of two prohibitions one of them marked S at a school bus check on 11 June 2012 along with the results of an unsatisfactory  VOSA investigation of the Company’s maintenance arrangements which was carried out between 13 July 2012 and 19 July 2012 leading to the issue of seven prohibitions for fourteen prohibitable items of which two were marked S.  There was thus a total of nine prohibitions, three marked S.  The VOSA investigation also showed shortcomings in the administration of the Appellant’s preventive maintenance systems. The Appellant did not challenge VOSA’s evidence at the Public enquiry although the operator did not agree with all the findings.

4.	Mr Sasse’s submission was restricted to the question of the extent of the reduction of the appellant’s fleet size.  He did not dispute the matters narrated in paragraph 3 above nor that some reduction of fleet size by the Deputy Traffic Commissioner was justified in all the circumstances.  

5.	We take the view that the Deputy Traffic Commissioner’s decision restricting the permitted size of the appellant’s fleet to fifteen vehicles for an indefinite period was disproportionate in all the circumstances. It failed to take account of the Company’s  previous satisfactory regulatory history since November 2003; the financial implications of a curtailment of this size; and the steps that had been put in place by the date of the Public Enquiry to arrest the sudden and dramatic deterioration in its maintenance standards. However, we have concluded that it would be inappropriate for the Appellant to be allowed to operate more than it’s current daily average of some 17 vehicles until it has been able to show that the various alterations in its maintenance arrangements have bedded down and are operating satisfactorily. These alterations include the appointment of an additional transport manager, a new maintenance contractor to undertake preventive maintenance inspections, and an in-house vehicle fitter together with refresher training of drivers on the importance of their daily walk-round checks and written defect reports. We have decided  that, given the significance and magnitude of these alteration, the curtailment should remain in place until 15 March 2014 before any application could be made to increase the size of the Company’s fleet. Indeed we consider that to a degree it moved beyond the realm of regulation to that of the imposition of a penalty on the Company.  Having carefully read the transcript of the Public Inquiry and having regard to the written and oral submissions made by Mr Sasse, we are satisfied that although the company can run twenty buses the actual daily average of buses which they operate is seventeen.  They have seventeen permanent drivers.  A fleet of seventeen buses is the fleet size require to underpin the profitability of the Company.  We thus consider that the appropriate course is for us to substitute our own decision for that of the Deputy Traffic Commissioner and restrict the curtailment of the company’s fleet to seventeen buses rather than fifteen.  That restriction is in our view a more proportionate regulatory response than that made by the Deputy Traffic Commissioner in his decision.  Our decision therefore is to restrict the fleet of buses permitted to the Company by their Standard International Public Service Vehicle Licence to seventeen  in place of twenty.  That restriction will take effect from 10 May 2013.  

6.	We have also carefully considered the undertakings narrated in paragraph 1 above.  We are content to confirm those with the following alterations.  In undertaking 2 we delete the words “and June 2013” substituting “June 2013 and December 2013”.  The effect of that alteration is to require the Company to undertake a further internal audit of their maintenance systems, maintenance documentation and vehicle inspections.   We also add a further undertaking:

	“In twelve months from 15 March 2013 an inspection of the Company’s maintenance arrangements will be carried out by VOSA.”

7.	The appeal is therefore allowed to the extent indicated in this decision.  The Deputy Traffic Commissioner’s decision is revised to that extent.

		A J GAMBLE
		Judge of the Upper Tribunal
		Date: 15 April 2013