Neutral Citation Number: [2014] UKUT 0157 (AAC)		Appeal No.  T/2013/86
IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
TRAFFIC COMMISSIONER APPEALS

ON APPEAL from the DECISION of
Tim Hayden, Deputy Traffic Commissioner for the 
West of England Traffic Area dated 21 November 2013

Before:
Her Honour Judge J Beech, Judge of the Upper Tribunal
Leslie Milliken, Member of the Upper Tribunal
Michael Farmer, Member of the Upper Tribunal

Appellant:

REDSKY WHOLESALERS LIMITED

Attendances:
For the Appellants: James Backhouse of Backhouse Jones Solicitors

Heard at: Field House, 15-25 Bream’s Buildings, London, EC4A 1DZ
Date of hearing: 25 March 2014
Date of decision:    2 April 2014

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that this appeal be ALLOWED. A restricted licence is granted to the Appellant with an authorisation for three vehicles.  The following conditions and undertakings are to be attached to the licence:
a)	Within three months of the date of this decision, the Appellant is to employ a fully qualified Transport Manager who will have responsibility for the vehicles to be operated under the licence.  The appointment of the Transport Manager is to be approved by the Traffic Commissioner;
b)	That the Appellant undertakes that all tachograph analysis is to be undertaken by an external, reputable outside contractor on a monthly basis; 
c)	That the Appellant’s maintenance and compliance systems be fully audited every six months by a trade association for a period of two years, the first audit taking place within six months of this decision; all reports to be served upon the Traffic Commissioner within 14 days of their availability.

SUBJECT MATTER:-  Application for restricted licence; fitness of operator to hold a licence.

CASES REFERRED TO:-  None

REASONS FOR DECISION

1.	This was an appeal from the decision of the Deputy Traffic Commissioner for the West of England Traffic Area (“DTC”) made on 21 November 2013 when he refused the Appellant’s application for a restricted operator’s licence under s.13 of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”). 

2.	The factual background appears from the documents, the transcript and the Deputy Traffic Commissioner’s written decision and is as follows:

(i)	On 25 October 2010, the Appellant was granted a restricted operator’s licence authorising five vehicles following a public inquiry called as a result of Mr Singh, the director of the Appellant company, failing to disclose a conviction for fly tipping.  An undertaking was attached to the licence that Mr Singh attend a one day operator licensing awareness seminar by no later than 30 November 2010.  This he did not do until March 2011 and as a result, a formal warning letter was issued.
(ii)	The Appellant had one vehicle in possession.  On 20 March 2012, that vehicle was stopped by VOSA and an “S” marked prohibition was issued in respect of two defects arising out of excessive wear of the inner brake pad on a nearside axle resulting in metal to metal contact when the brake was applied.  A VOSA maintenance investigation revealed that there were no forward planned inspections of the vehicle, there had been a change in maintenance contractor without the change being notified to the Traffic Commissioner and the preventative maintenance sheets (“PMI sheets”) did not show that the inspections were taking place at the stated frequency of every ten weeks and some PMI sheets were missing and in particular, not one was available from February 2012 including the sheet for the inspection immediately prior to the issuing of the prohibition.  Inspection of the driver defect reports revealed that on 12 March,16 March and 20 March 2012, the driver reported ABS defects on the vehicle.  There was no record of rectification of the defects prior to the vehicle then being taken out onto public roads.  Further, the tachograph calibration certificate had expired on 31 January 2012 and this was noted by the driver on that day on his driver defect report.  The vehicle failed its MOTon 15 February 2012 with the expired calibration certificate being one of the reasons.  There were other causes for concern in relation to maintenance which we will not rehearse in this decision.  The vehicle examiner concluded that there were “many aspects of the operation that gave serious cause for concern”.
(iii)	By the date of the public inquiry, a second vehicle was in possession; the PMI sheet for the inspection prior to the issuing of the prohibition had not been forwarded to the vehicle examiner.  When asked about it, Mr Singh stated that the missing sheet could not be found.  However, upon inspection of the maintenance records produced by Mr Singh, it became apparent to the DTC that the sheet which was dated 13 March 2012, was filed within the records.  Mr Singh denied “hiding” the sheet. It had not crossed his mind to inform the vehicle examiner that the sheet had been found.  The sheet which recorded that the rear brake pads on the vehicle were low and needed to be changed had been received after the vehicle examiner’s visit.  Mr Singh accepted that he had not attended the operator’s awareness course in accordance with the undertaking given by him when the licence was granted, but rather that he had sent Mr Mathur, who was the general manager of the company with responsibility for the company’s transport (consisting of a fleet of vans in addition to the authorised vehicles).  
(iv)	The DTC found that the licence conditions had been breached; a serious prohibition had been issued; there had been a breach of the statement of expectation and a breach of an undertaking; there had been a material change in the Appellant’s circumstances relating to fitness to hold a restricted licence.  The basis for this last finding was that Mr Singh had given untruthful evidence to the DTC about the inspection sheet dated 13 March 2012, having given two different versions of events concerning the sheet (i.e. that it had not been found and then when located within the records, that it had been received following the VOSA visit).  The DTC revoked the licence with effect from 31 January 2012.  
(v)	By a decision dated 23 April 2013, an appeal to this Tribunal was dismissed (see Appeal T2013/7 Redsky Wholesalers Ltd).  
(vi)	By an application dated 11 May 2013, the Appellant applied for a restricted operator’s licence authorising five vehicles and two trailers.  The application was accompanied with a letter setting out the Appellant’s case in support drafted by Mr Newman, solicitor.  In particular, the letter re-opened the issue of whether Mr Singh had given untruthful evidence before the DTC in 2012, asserting that Mr Singh had been confused and that he had genuinely believed that the PMI sheet was still missing when he gave his evidence.  The letter asserted that had Mr Singh wished to hide the sheet from the DTC, it would not have been included in the maintenance folder which was then handed to the DTC.  It was noted that Mr Singh represented the company at the public inquiry and he was wholly unprepared.  The letter went on to aver that the Appellant was now fit to hold an operator’s licence.  All of the maintenance systems were in place and arrangements had been made for the tachograph records to be analysed by an external company (Tachodisc); PMI intervals had been reduced to six weeks and a new maintenance contractor appointed; a wall planner was now in use; both Mr Singh and Mr Mathur (who would continue to manage the transport) had attended an operator awareness training course; Mr Mathur had absolute authority to authorise all maintenance work and parts required.  The DTC was reminded that the original prohibition was delayed (thus demonstrating that the defects did not present an immediate danger to road users); both the DTC and Upper Tribunal had granted stays following their decisions (although there is no evidence of a stay being granted by the Tribunal in the papers before us); an interim licence was requested with an undertaking that within three months, an independent audit of the Appellant’s maintenance and compliance systems would take place with a copy of the report to be forwarded to the Traffic Commissioner within fourteen days.  
(vii)	The application was heard at public inquiry on 9 October 2013.  Mr Singh and Mr Mathur were in attendance along with the newly appointed marketing director, Keith Lay.  The Appellant was represented by Simon Newman, solicitor.  At the outset, the DTC agreed to hear further evidence concerning the PMI sheet which had caused him to make adverse findings in respect of Mr Singh at the previous public inquiry.  Mr Singh gave evidence.  He told the DTC that he had set up the company in 2004, when he was 23.  It had expanded to 37 staff with a £10 million turn over.  He was the sole director.  He hoped to operate three vehicles under the licence although the application was for an authorisation of five.  He had two LGV drivers in his employment and he would employ a third.  One of the vehicles that had previously been operated was standing in the yard and there were two custom made vehicles in storage with the manufacturers.  Responsibility for the transport operation was shared between himself, Mr Mathur and the warehouse manager.  The company operated a fleet of eight vans but the company was being held back because of its inability to deliver large orders in one vehicle.  He confirmed all of the systems that had been set out in the covering letter to the application.  He confirmed that Tachodisc would train Mr Singh, Mr Mathur and the warehouse manager and he made reference to a schedule for MOT preparation and a software package which assisted in avoiding the overloading of vehicles.  A comprehensive package of procedures and systems was produced to the DTC.  
(viii)	As for his evidence before the DTC in December 2012, he stated that having changed maintenance providers to a mobile fitter, they had encountered considerable difficulties in obtaining paperwork from him.  Mr Mathur did not receive the PMI sheet dated 13 March 2012 until the end of April when it came attached to an invoice.  The invoice was produced, dated 30 April 2013.  He did not take the invoice to the public inquiry in December 2012 because Mr Singh did not realise that it was important.  He thought that he had misunderstood the DTC’s questions about the PMI sheet.  
(ix)	In answer to questions put by the DTC, Mr Singh confirmed that it would be Mr Mathur’s responsibility to check the daily driver reports and to ensure that the PMI sheets were handed over following inspections.  He stated that since the revocation, some training had taken place.  He clarified this by describing the training as reading all the rules on the internet.  
(x)	Rajesh Mathur then gave evidence confirming that he looks after all of the transport and logistics of the company.  He now checked the fleet of vans in the same manner as one would check an LGV and he had introduced driver defect report books for the drivers.  He would authorise any repairs necessary to keep a vehicle on the road.  He also undertook ad hoc checks on drivers whilst they conducted daily walk round checks.  He signed the driver defect reports before the vehicles left the yard.  Tachodisc would be sent the tachograph data for analysis electronically and the results would be returned within 48 hours.  If there were any discrepancies, the drivers would be warned and sent on a course if required.  He would also receive training.  He would ensure that all PMI sheets were returned with the vehicles and he would check them to ensure that all items were corrected.  In fact, Mr Singh had asked the maintenance contractors to provide a scanned copy of the PMI sheet before a vehicle was returned.  There was also an agreement with a rental company in place in the event that a vehicle needed to be kept off the road for repair.  
(xi)	In answer to questions put by the DTC, Mr Mathur stated that he had been reading up on things on the internet and he had attended a seminar.  He confirmed that he would receive training if the application was granted and that he would keep up to date.  He accepted that he needed training before the licence was granted.  
(xii)	As for the prohibition issued on 20 March 2012, he confirmed that he was in control of the vehicles at the material time and that he had checked the driver defect reports.  He had informed the mobile fitter of the defect report dated 12 March 2012 and a PMI had then taken place on 13 March 2012.  He then did not receive the PMI sheet.  It was his fault that the vehicle had been used on a public road with a defect.  He did not have any formal qualifications in transport and had not received any training since April 2013.  
(xiii)	Mr Singh was then recalled.  He had stated at the previous public inquiry that the problem with the maintenance failures was that the company was growing.  He wished to clarify the position: he had been undertaking every aspect of the business including sales and marketing.  Systems had since changed over the previous twelve to eighteen months and he had employed Mr Lay as a sales and marketing director.  The team were now 100% confident that they could operate a compliant operation because none of them wanted to be at a public inquiry again.  He confirmed that he would send Mr Mathur for further training.  
(xiv)	Keith Lay (who had a very impressive CV) then spoke briefly.  He said that Mr Singh was a man who learnt by his mistakes and was someone who invested in the company.  He wanted to do everything right.  The company was profitable, having made a profit of £450,000 in the previous financial year.  
(xv)	In his closing submissions, Mr Newman acknowledged that the key issue was that of fitness to hold a licence but that the Appellant was now fit to do so.  There had been a positive operating history between April 2012 and May 2013 (the period following the prohibition and up to the Upper Tribunal’s decision).  Three members of the Appellant’s team were now responsible for maintenance and circumstances had changed from the time when Mr Singh was overworked as a director in a rapidly expanding business.  There was a viable and well thought out plan for compliance and the revocation of the original licence had been a great shock to Mr Singh.  Opportunities to be awarded further contracts had been lost.  As a result of the systems that had been put in place along with the offer of independent audits and further training of key members of the team, fitness to hold a licence had been regained and the licence should be granted.
(xvi)	Following the public inquiry, Mr Newman submitted certificates confirming the attendance of Mr Mathur, Mr Singh and the warehouse manager at the RHA Managing Your Operator Licence Training Seminar on 15 October 2013.
(xvii)	In his written decision dated 21 November 2013, the DTC found that the fitness of Mr Singh was indistinguishable with that of the company and that Mr Singh’s assurances could not be trusted.   In the knowledge that there was no requirement for a qualified Transport Manager to be employed to oversee a restricted licence, the DTC looked very closely at the individuals who would be responsible for transport matters.  Whilst Mr Singh stated that he would be primarily responsible for transport, the DTC was not satisfied that this would be the case.  It was Mr Mathur who was to be responsible for maintenance, yet he was the individual who had been responsible for the standard of maintenance in March 2012 and who had been responsible for sending a vehicle out with defective brakes.  But in any event, Mr Singh was not to be trusted.  He had lied to a public inquiry and failed to disclose the PMI sheet to VOSA.  An indication of the priority given to training and compliance was that Mr Singh had not thought it appropriate to undertake training prior to the public inquiry.  The DTC viewed Mr Singh in terms of reliability and future compliance, in exactly the same way as he did in December 2012.  
(xviii)	The DTC concluded that other than a review of the paperwork and a change of maintenance contractor, nothing had changed  and fitness was not secured simply by the effluxion of time.  The DTC was critical of the fact that Mr Singh had not even thought it useful for any training to be provided either for himself or for Mr Mathur when the principle person responsible for maintenance was Mr Mathur.  The DTC appreciated that the “penny might have dropped” at the public inquiry in relation to training and some credit was given for the fact that training had since taken place but the timing indicated the lack of priority that Mr Singh gave to compliance issues.  For those reasons, the Appellant had not demonstrated that it was fit to hold a restricted licence.

3.	At the hearing of this appeal, the Appellant was represented by Mr Backhouse who submitted a skeleton argument for which we were grateful.  His first point was that the DTC was considering a new application from a company whose restricted licence he had revoked nine months before without making any orders of disqualification in respect of either Mr Singh or the company itself.  Mr Backhouse submitted that the inference to be drawn from the absence of such orders was that this was not the worst of cases in 2012 and that it was envisaged by the DTC that the Appellant could properly be considered for a new licence within a relatively short period of time.  Mr Backhouse agreed that the approach taken by Mr Singh in respect of this new application was ill advised and unhelpful.  Whilst it was clear that he held a sense of grievance that the DTC had previously determined that he had lied to him, Mr Singh considered that at most, there had been a misunderstanding by him during the course of the original hearing, although he accepted that the DTC had been misled by his answers.  Mr Backhouse accepted that no attempt should have been made to revisit the DTC’s findings but rather to concentrate on the positive aspects of the Appellant’s application which could then be weighed in the balance against the DTC’s previous findings.  The course that Mr Singh took on behalf of the company meant that the issue of whether he lied to the DTC became the central issue in the hearing (this Tribunal likened it to “scratching an old wound”).  It served no useful purpose apart from to concentrate the DTC’s mind upon an issue which he had previously determined and as a result undue weight was put upon the issue at the expense of the other positive features of the Appellant’s case.  
4.	Mr Backhouse submitted that had the position been accepted by Mr Singh, then the outcome of the application would have been very different.  The hearing would not have been dominated by an issue which had already been determined nine months before and the DTC would have placed weight upon the fact that during the operating history of the company, there had only been only one delayed prohibition (albeit “S” marked); that following the issuing of that prohibition, maintenance contractors had been changed (albeit that the mobile fitters that had been used were not the maintenance contractors specified on the licence); that whilst the maintenance systems were not being effectively enforced or followed at the time of the prohibition, that between April 2012 and the Upper Tribunal decision in May 2013 (the Appellant having had the benefit of a stay up to that time), that the Appellant’s had continued to operate with two vehicles in an exemplary fashion.  The Appellant’s systems at the time of the public inquiry were faultless and when taken together with a relatively long period of blemish free operation, the fact that two of the three vehicles which were intended to be operated were brand new and that undertakings had been offered concerning external tachograph analysis and audits of the maintenance systems by a trade association, the DTC should have stood back from determining that Mr Singh was still unfit to be involved in a restricted licence.  Mr Backhouse disagreed with the Tribunal that this was a case where there was a need for someone with the equivalent experience and qualifications as a Transport Manager to be employed firstly, to remove Mr Mathur from having primary responsibility for the vehicles and secondly to give the DTC some assurance as to future compliance and trustworthiness of the transport operation. He disagreed that the DTC should have taken such a negative stance with regard to the failure of Mr Singh to provide further training to Mr Mathur at the very least prior to the application for the licence being made.  The fact that training was then undertaken after the public inquiry should not have resulted in such negative findings.  
5.	Mr Backhouse made the following proposals by way of disposal of the appeal:
a)	That either a full or an interim licence be granted for five vehicles or fewer, depending upon the Tribunal’s view;
b)	That the Appellant undertake that Mr Mathur attend a continuation training course within six months;
c)	That the Appellant undertakes that all tachographs be analysed by reputable outside contractors; 
d)	That the Appellant’s maintenance and compliance systems be fully audited every six months by a trade association, the first audit taking place within six months of this decision; all reports to be available on request for a period of two years.

6.	We agree with Mr Backhouse that the issue of whether Mr Singh had lied to the DTC in December 2012 should not have been revisited and that as a result of it being revisited, the hearing before the DTC was dominated by the issue.  We agree that the issue over-shadowed what would otherwise have been a positive application in many respects.  That is not to say that the DTC was not entitled to be concerned firstly by the fact that only nine months had passed since the original revocation of the licence although in the circumstances of this case, it should not have been fatal to the Appellant’s application; secondly that Mr Singh had asserted that he was to be primarily concerned with transport when the reality was, that as a sole director of a company with a turnover of £10million, he simply would not have had the time to undertake that role and when he was inadequately trained to do so in any event; thirdly that Mr Mathur was to continue in the role which he had undertaken so badly in 2012 when the very serious maintenance issues had arisen.  He had after all, consciously sent out a vehicle with brake defects.  

7.	We are mindful of the test which we should apply within our jurisdiction and which is set out by the Court of Appeal in the case of Bradley Fold Travel Ltd and Peter Wright v Secretary of State for Transport (2010) EWCA Civ 695 namely, does reason or law impel us to take a different view from that of the DTC? We are satisfied that in this case, reason does cause us to do so.  We agree with Mr Backhouse that this was a case in which further conditions and undertakings along the lines as those set out in paragraph 5 above should have been considered to allay the DTC’s concerns about whether Mr Singh could be trusted and whether Mr Mathur was capable of operating a compliant operation.  However one looks at the Appellant company, it is a very successful and growing operation and whilst the licence application was for a restricted licence which did not require the employment of a fully qualified Transport Manager, the employment of a Transport Manager in this case, was in our view, the appropriate condition to impose upon this licence along with the other proposals made, including a reduced authorisation of three vehicles.

8.	It follows that this appeal is allowed.  A restricted licence is granted with an authorisation for three vehicles.  The following conditions and undertakings are to be attached to the licence:
a)	Within three months of the date of this decision, the Appellant is to employ a fully qualified Transport Manager who will have responsibility for the vehicles to be operated under the licence.  The appointment of the Transport Manager is to be approved by the Traffic Commissioner;
b)	That the Appellant undertakes that all tachograph analysis is to be undertaken by an external, reputable outside contractor on a monthly basis; 
c)	That the Appellant’s maintenance and compliance systems be fully audited every six months by a trade association for a period of two years, the first audit taking place within six months of this decision; all reports to be served upon the Traffic Commissioner within 14 days of their availability.

Her Honour Judge J Beech
 2 April 2014