Neutral Citation Number: [2013] UKUT 0194 (AAC)                            Appeal No: T/2013/07

IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
(TRAFFIC COMMISSIONER APPEALS)

ON APPEAL FROM THE DECISION OF T G HAYDEN, 
DEPUTY TRAFFIC COMMISSIONER for the WESTERN TRAFFIC AREA, 
DATED 20 DECEMBER 2012

Before:
Judge M Hinchliffe, Deputy Chamber President (HESC); Judge of the Upper Tribunal.
Mr L Milliken, Member of the Upper Tribunal.
Mr M Farmer, Member of the Upper Tribunal.

Appellant:
REDSKY WHOLESALERS LTD

Attendance:
For the Appellant: 	Mr S Newman, Solicitor

Appeal heard at: 	Victory House, Kingsway, London
Date of hearing: 	27 March 2013
Date of decision: 	23 April 2013

DECISION OF THE UPPER TRIBUNAL:

IT IS HEREBY ORDERED that the appeal be dismissed

Subject matter:	
Restricted Licence. Comparison of “fitness” with “good repute”. Whether the “Priority Freight” and “Bryan Haulage” questions have any relevance to a restricted licence. 

Cases referred to:
2009/225 Priority Freight Ltd & Paul Williams
217/2002 Bryan Haulage Ltd (No. 2)
Paul Coleman t/a Coach UK Travel [2011] UKUT 359 (AAC)

REASONS FOR DECISION:

1)	This was an appeal from the decision of the Deputy Traffic Commissioner (DTC) for the Western Traffic Area made on 20 December 2012 when, under S.26(1) of the Goods Vehicles (Licensing of Operators) Act 1995 (and following a public inquiry convened after the issue of an “S” marked prohibition and an unsatisfactory maintenance investigation) he revoked the operator’s restricted operator’s licence, which had authorised four vehicles and two trailers. At the time of the maintenance investigation, the operator had one vehicle and no trailers in possession.

2)	The DTC found against the operator in relation to:
•	Contravention of conditions - S.26(1)(b)
•	Prohibition Notices - S.26(1)(c)(iii)
•	Breach of statement of expectation - S.26(1)(e)
•	Breach of undertakings - S.26(1)(f)
•	Material change in circumstances relating to fitness to hold a restricted operator’s licence - S.26(1)(h)

3)	The factual background to this appeal appears from the documents, the transcript and the DTC’s decision and is as follows:
(i)	The appellant is the holder of a restricted operator’s licence, authorising four vehicles and two trailers.
(ii)	The licence had been granted following a public inquiry held on 25 October 2010. At that time, the Traffic Commissioner had determined that the licence could be granted with an undertaking attached that the director of the company, Mr Singh, attend a one-day operator licensing awareness seminar by no later than 30 November 2010. The undertaking was not complied with until March 2011, and the operator was issued with a formal warning for this matter.
(iii)	On 20/3/2012 authorised vehicle FN56BBU was stopped by VOSA and, following inspection, was issued with an “S” marked prohibition for two defects arising from the fact that the inner brake pad on a nearside axle was excessively worn, with pad material so thin that application of the brake produced metal to metal contact. The “S” marking showed that the defect was a consequence of a significant failure in maintenance.
(iv)	Subsequently, Mr Hurdle, a VOSA Vehicle Examiner (VE), undertook a maintenance investigation. In a report dated 3/5/2012, the VE noted that planned inspections were supposed to be contracted out to Transwheel Ltd and that the stated inspection interval was 10 weeks. It transpired, however, that Transwheel Ltd had ceased trading in April 2010 and the current provider was a mobile fitter who carried out inspections on site. The change of provider had not been notified to the Traffic Commissioner. Further, the records produced did not show that safety inspections were taking place at the stated frequencies.
(v)	In relation to the safety inspection records, some were missing from May to August 2011 and none were available from February 2012. The inspection sheet immediately prior to the issue of the “S” marked prohibition was missing, so it was not possible to see if the brake defect had been identified at this safety inspection, and such inspection sheets as were available had no record of satisfactory brake tests, and signatures were missing.
(vi)	In relation to the driver defect-reporting system, the VE found that an ABS defect had been noted on 12/3/2012 and again on 16/3/2012. The defect was noted again on 20/3 2012, which was the date of the “S” marked prohibition. There was no record of rectification. As such, the driver took a defective vehicle onto the highway.
(vii)	The tachograph calibration certificate had expired by 31/1/2012. A driver on 31/1/2012 had noted this. The vehicle then failed its MOT on 15/2/2012, with this failure still not rectified.
(viii)	The VE found that there was no satisfactory forward planning system in place.
(ix)	Since the granting of the licence there had been two annual tests, resulting in one pass and one fail. The failure had been for items that were easily detectable, and should have been corrected had the vehicle been properly prepared, prior to test. These items included a restricted driver’s view of the road, expired tachograph calibration, and a defective exhaust.
(x)	The VE noted, in conclusion, that there were “many aspects of the operation of the licence that gave serious cause for concern” - most notable of which was the issue of an “S” marked prohibition for significant brake defects.
(xi)	By the time of the public inquiry, a second vehicle had been added to the vehicles in possession. Mr Singh told the DTC that the evidence of the VE was not disputed. He explained that the company also operated a small fleet of vans, which did not require authorisation under an operator’s licence. In relation to the operation of authorised vehicles, an employee, Mr Mathur, was responsible for everything. He was a General Manager. Mr Singh said that he had sent Mr Mathur on a VOSA course that was a two-day course. When pressed, Mr Singh subsequently said it had been a one-day seminar.

Q. Was it an invitation to you to attend a new operator’s seminar?
A. I think so
Q. You sent him instead?
A. I sent him, yes.
Mr Singh went on to say that he sent Mr Mathur on the course because he, Mr Singh, had already attended a seminar. 
(xii)	The DTC asked Mr Singh about the safety inspection sheets issued around the time of the “S” marked prohibition. Mr Singh said that he just had a sheet dated 23/3/2012, which was after the prohibition. The DTC specifically asked Mr Singh if he had located any other sheets, but Mr Singh said that he did not think so: “because we had it all the sheets, somehow, in our office, we couldn’t find, at the time when Mr Hurdle came in and still we couldn’t find those sheets” (our underlining).
(xiii)	The call-up letter required the operator to bring all documentary evidence relating to the vehicle maintenance system for the previous nine months to the public inquiry. Among the documents produced was found a maintenance inspection sheet dated 13/3/2012 - exactly one week before the issue of the “S” marked prohibition. The VE maintained that this had not been shown to him and the DTC noted that there was specific mention in the VE report that the safety inspection sheet prior to the prohibition was missing. The sheet, completed by Mr Ward, the mobile fitter, noted that the rear brake pads were low and needed to be changed.
(xiv)	Mr Singh then suggested that the inspection sheet been provided by the mobile fitter a month after Mr Hurdle’s visit had taken place, which is why he was unable to provide a copy of the sheet to Mr Hurdle. The DTC reminded Mr Singh that he had previously stated that the record was still missing. The DTC asked:

Q. Why have you kept it hidden in your file?
A. No, we didn’t hide it, sir. If I did hide it, I would –
Q. It has not reached Mr Hurdle, has it?
A. No it didn’t reach, but we didn’t hide it, sir. I’m not here to hide anything.
(xv)	The DTC asked Mr Singh what arrangements existed to ensure that the rules on driver’s hours and tachographs were being complied with. Mr Singh said:  “... they’re not brand-new drivers. They know their working hours and everything… I mean, we told them to take breaks, whatever the times are, everything…”
(xvi)	The DTC asked Mr Singh if it had crossed his mind to tell Mr Hurdle that he had found the safety inspection sheet issued shortly before the prohibition. Mr Singh said that he it had not.
(xvii)	The DTC then asked Mr Singh if there was anything else that he would wish to say about his maintenance systems. Mr Singh made a submission before the DTC retired for a short time. In due course, having given the matter some thought, the DTC decided to reserve his decision. Further discussion then took place and the operator said: 
“Sir, I mean, before you make any decision, sir, I would like to bring to your attention that a licence is very important for our business because the company is growing 40 to 50% annual growth. All the beer companies you know, the other breweries, they are operating by the lorries. With the vans, we can’t operate it any more, but the size that we are, we are doing a turnover of £10 million and the weight of the goods are quite heavy. That is the reason we got already two lorries and we have placed, well, two brand new lorries are going to be delivered end of January to us. The order has been placed, £45,000 each lorry has been ordered”.
(xviii)	Mr Singh referred, subsequently, to the jobs his business had created and, in a further submission, he attempted to reassure the DTC that the company had learnt its lesson. Mr Singh also explained why he wished to focus on lorry operation, rather than reliance upon vans. The operator concluded by saying: “I do apologise again, you know. Whatever has happened has happened, and we learnt our lesson. We won’t do it again”.
(xix)	In his written decision the DTC summarised the evidence and found that the operator had failed to comply with its undertaking that motor vehicles would be kept fit and serviceable, and had failed to comply with the undertaking to keep records of all safety inspections and repairs to vehicles. It was also found that the operator had failed to comply with the condition that the Traffic Commissioner be informed within 28 days of changes in the maintenance and safety arrangements.
(xx)	The DTC thought that the failures in maintenance and record keeping were serious and significant, resulting in the issue of an “S” marked prohibition. The DTC considered that the vehicle had been used in a dangerous condition.
(xxi)	On the positive side the DTC noted that there had been no further prohibitions and that he had received assurances from Mr Singh as to future adherence to his obligations re maintenance records and systems. Mr Singh told the DTC that advisory notices had been issued to drivers, but the DTC did not regard this as a positive step. It was of concern that such notices had been necessary in the first place.
(xxii)	The DTC concluded that the operator was not fit to hold a licence and he also found that Mr Singh’s evidence in relation to the maintenance inspection sheet of 13/3/2012, particularly the evidence that the inspection sheet had never been found, was untrue. When confronted with it, Mr Singh then gave a wholly different version of events, namely that he had requested it and received it after the VE visit, but he had not then thought to send it on to the VE. The DTC found that this was clearly a significant and damaging document that showed that the vehicle had been operated for a period of time with serious brake defects.
(xxiii)	The DTC then considered how likely it was that the operator would, in future, operate in compliance of the operator licensing regime, and he found that it was unlikely. The DTC then asked whether the operator ought to be put out of business. In considering this matter, the DTC was unclear whether revocation of this restricted operator’s licence would actually put the operator out of business - because the operator had built a successful business and the transport arrangements primarily involved vans, which are not covered by the operator licensing regime. The DTC concluded, nevertheless, that the conduct of the operator was such that it should not continue to hold the licence. He considered revocation to be proportionate in the circumstances.

4)	At the hearing of this appeal, the appellant was represented by Mr Newman who submitted a skeleton argument for which we were grateful.

5)	The first point made was that the DTC’s decision did not specify which subsections of Section 26 had been relied on, and it was not clear from the decision whether consideration had been given to each of the statutory grounds.

6)	We find no merit to this ground of appeal. The basis of the DTC’s approach is very clear from his decision and, if necessary, cross-reference to the call-up letter would lead to identification of the specific statutory provisions. In our view the appellant can be in no doubt as to the reasons for the revocation of the operator’s licence.

7)	Mr Newman’s next point was that the DTC was wrong with regard to his findings on the severity of the defects of the brakes. The “S” marked prohibition had been a delayed prohibition that, according to VOSA guidelines, would suggest that the defects were not such that further driving of the vehicle would involve a serious risk.

8)	We regard this ground of appeal as misconceived. The nature of the defect, involving metal on metal braking, clearly involved danger to a significant degree. The judgement of the VE on the day was that it was not necessary to prevent the vehicle from moving at all, and that the prohibition could be delayed. This did not mean that the defect was not serious, or that it did not represent a significant failure in maintenance (clearly, it did), and the delayed nature of the prohibition did not mean that the defect was not potentially dangerous. It simply meant that, in the opinion of the VE, the defects on the vehicle were not such that further driving of it would involve risk of injury to people.

9)	The next point was that the DTC had failed to take account of the evidence that maintenance records since the VOSA maintenance investigation were satisfactory. A shorter cycle of safety inspections had been introduced, and a new maintenance contractor had been employed. This was relevant to the question of whether the operator was likely to be compliant in the future.

10)	Having read the entire transcript and the written decision, and looking at the matter in the round, we are satisfied that the DTC took all relevant matters into account, and conducted an appropriate balancing exercise. Since the maintenance investigation, no further in-depth analysis of the maintenance arrangements has been undertaken although some documents were produced at the public inquiry. In and amongst these documents was the preventative maintenance inspection sheet that Mr Singh had initially said had never been found, and which he then said had been sent to him after the VE investigation - although it had not been subsequently disclosed to the VE. The crucial issue was whether or not the DTC felt able to accept the evidence and the assurances given by Mr Singh in relation to claimed improvements to the maintenance records and systems, since the maintenance investigation had taken place. For the reasons that he gave in his decision, the DTC was not persuaded that he could rely upon Mr Singh’s assurances. We consider that the DTC was right to be sceptical having regard to the history of poor compliance and, in particular, the contradictory evidence in relation to the missing safety inspection sheet.

11)	Mr Newman contended that the DTC was not justified in reaching the negative conclusions he did in relation to Mr Singh’s honesty, and in relation to the documents produced at public inquiry.

12)	We disagree, and find that the DTC was entitled to reach the conclusions that he did, having regard to the inconsistent evidence given, and the manner in which the documentary evidence emerged. The safety inspection sheet identified the defect with regard to the brakes that should, on any view, have been repaired as soon as possible, and before an “S” marked prohibition had to be issued. There can be no criticism of the DTC’s disapproval of this situation. This was a damaging document that emerged by chance – it was not formally presented to the VE or to the DTC by way of purposeful and knowing disclosure. 

13)	Mr Newman complained that the DTC had not given Mr Singh notice that there would be questions over his integrity.

14)	Again, we regard this ground of appeal to be lacking in merit. As the tribunal has regularly stated, evidence at a public inquiry is fluid and matters often arise that have not been anticipated. Sometimes, this may require an adjournment for the operator to prepare a response - but not necessarily so, especially if the new issue emerges from the operator’s own evidence, or from documentation produced by the operator.

15)	It is, in our view, good practice for a Traffic Commissioner to personally examine documents handed in at a public inquiry, even though such documents are frequently in some disarray and it may transpire that the operator has not checked what, exactly, is being handed in. A Traffic Commissioner may retire for a short time in order to examine closely the documents submitted, and this is also good practice. As a result, it is not unusual for matters to arise from the documents produced that require further questions – and which may then lead to relevant conclusions being drawn. But this would generally only require the Traffic Commissioner to put the emerging issues to the operator in evidence, and to seek his explanation. Accordingly if, as a consequence of documentary evidence produced, or inconsistencies in the oral evidence, a Traffic Commissioner (having raised his concerns) concludes that the witness cannot be trusted - then, in our view, he is entitled to form that conclusion, and to set out his reasons in his decision, without more ado. This is one of the fundamental purposes of the public inquiry, and it is why this tribunal will rarely interfere with a Traffic Commissioner’s assessment as to the veracity and reliability of the oral evidence given, or the witnesses heard.

16)	Moreover, in the present case the DTC specifically raised the possibility that Mr Singh had attempted to hide the missing safety inspection sheet and gave Mr Singh an opportunity to respond. The DTC did not accept as credible the answers given. This was entirely a matter for the DTC to assess on the day.

17)	Mr Newman next submitted that the DTC had been wrong to ask himself the “Priority Freight” and “Bryan Haulage” questions to arrive at an assessment of the appellant’s fitness. These related to repute, not fitness, and fitness was a lower standard.

18)	We disagree that, in this case, the “Priority Freight” and “Bryan Haulage” questions were inappropriate. In our view, they were helpful. Although the “Priority Freight” and “Bryan Haulage” cases relate to repute, the fundamental analysis arises from the fact that an operator’s licence (whether restricted or standard) is a possession and, as a matter of compliance with ECHR, a proportionate approach is required, and consideration of the likelihood of future compliance should inform the approach taken. 

19)	Although, in the absence of argument on the point, we draw back from holding that the “Priority Freight” approach is a requirement when considering the question of fitness to hold a restricted operator’s licence, we consider that the DTC’s approach was not inappropriate in the circumstances of this case. In particular, the “Priority Freight” question concerning future compliance (or otherwise) is very likely to be relevant to fitness in most cases. We do not think that fitness is a significantly lower hurdle than the requirement to be of good repute, it is simply a different requirement. An operator putting badly maintained vehicles on the road represents an equal menace to public safety, whether or not they hold a restricted licence or a standard licence. If an operator (even a restricted licence holder) cannot be trusted to comply in future, we do not see how any such operator can hope to be regarded as fit to hold an operator’s licence.

20)	So far as the “Bryan Haulage” question is concerned, many holders of a restricted operator’s licence will not go out of business if their operator’s licence is revoked, so this aspect may have less relevance to a restricted licence holder than to a commercial haulier. Moreover, it can be very difficult to accurately assess the likely consequences to a business of particular regulatory action - especially as operator assertions of dire and devastating consequences are easily made and generally unsupported by persuasive or objective evidence. In our view, having asked the “Priority Freight” question relating to future compliance, a Traffic Commissioner cannot be criticised for asking himself, in the context of assessing fitness, whether an operator’s conduct is such that they deserve to lose their restricted operator’s licence, whatever the consequences. 

21)	There is no suggestion in the DTC’s decision that he was unaware of the discretionary nature of his section 26 powers. As we read the decision, he analysed the evidence carefully, reached viable conclusions upon it and, when considering his discretion, found himself unable to countenance the continuation of this licence. In our view, that was a reasonable finding on the evidence, and neither law nor reason provide a proper basis upon which we should interfere.

22)	Mr Newman’s next point was that the DTC had made a negative point out of a positive point by not attaching weight to Mr Singh’s remedial notices to drivers.

23)	We consider that this submission lacks substance. The DTC was entitled to decide what weight, if any, to attach to any particular piece of evidence. Here, he had been given some assurances from a witness whom he did not trust, but against that was the overriding point that there had been a serious failure to have proper arrangements in place to achieve proper standards of maintenance and to ensure vehicle and public safety. What the DTC was saying was that the notices did not attract weight when set against the failings.

24)	Mr Newman’s next point was that the DTC failed to enquire as to the effect on the appellant’s business if the licence was revoked.

25)	We do not find merit in this submission. First, the appellant specifically addressed the DTC on the point. Second, the DTC specifically addressed the question in his decision. And third, the factual findings were such that the DTC concluded that the operator deserved to lose its restricted operator’s licence, whatever the consequences. In these circumstances, the DTC was perfectly entitled, on his findings of fact, to conclude that the operator was not fit to hold an operator’s licence, and further analysis becomes unnecessary. Having found that the operator could not be trusted to be compliant in the future, there was no logical basis for a detailed exploration of the possibility of reducing the authorisation or suspending the licence.

26)	Finally, Mr Newman submitted that the DTC did not give the appellant an opportunity to address him by way of closing submissions.

27)	In our view, the DTC, rightly, adapted his procedures flexibly to reflect the fact that Mr Singh was unrepresented and had some difficulty adhering to a rigidly structured process. It is clear from the transcript that Mr Singh was given every opportunity to put his case. Mr Newman did not put to the tribunal a single point that Mr Singh had failed to say to the DTC that would, or could, have made the slightest difference. We see no reason, in a case such as this, to require the DTC to adopt an overly formal approach. We easily distinguish this case from that of Paul Coleman t/a Coach UK Travel [2011] UKUT 359 (AAC) simply by reference to the transcript. Whether or not the DTC formally said words to the effect of: “and now I invite you to make a closing submission”, there can be no doubt that Mr Singh made one, if not more than one, and said all that could be said on his own behalf. In any event, the case turned upon the company’s maintenance systems and the DTC specifically asked Mr Singh to address him about this before he retired. Consequently, this ground of appeal also fails.

28)	In summary, we are satisfied that the conduct of the public inquiry was fair, and the DTC’s approach was appropriate. We find no reason to interfere with his findings or with his conclusion. The appeal is dismissed.

Judge Mark Hinchliffe, DCP
23 April 2013