Neutral Citation Number: [2014] UKUT 0436 (AAC)                     Appeal No: T/2014/40 - 41

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

ON APPEAL FROM THE DECISION OF NICHOLAS JONES, 
TRAFFIC COMMISSIONER for the WEST MIDLANDSTRAFFIC AREA, 
DATED 9 MAY 2014

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

Appellants:
C G CARGO LTD (Operator)

and

SUKHWINDER SINGH SANDHU (Director)

Attendance:
For the Appellants: 	Mr S Newman, Solicitor

Appeal heard at: 	Field House, Breams Buildings, London
Date of hearing: 	3 September 2014
Date of decision: 	30 September 2014

DECISIONS OF THE UPPER TRIBUNAL:

IT IS HEREBY ORDERED that the appeals be dismissed.

Subject matter:	
Operation without a Transport Manager. Deception of Traffic Commissioner.
Length of disqualification of Director.

Cases referred to:
David Finch t/a David Finch Haulage [2010] UKUT 284 (AAC)

REASONS FOR DECISIONS:

1)	This was an appeal from the decision of the Traffic Commissioner for the West Midlands Traffic Area made on 9 May 2014 when he revoked the operator’s standard national operator’s licence on grounds of not satisfying the requirements to be of good repute and to have professional competence. He also disqualified the company’s (then) sole director, Sukhwinder Singh Sandhu, from holding or applying for an operator’s licence in any traffic area for a period of five years.

2)	The factual background to this appeal appears from the documents, the transcript and the Traffic Commissioner’s decision and is as follows:
(i)	CG Cargo Ltd was the holder of a standard national operator’s licence, granted in April 2013, with authority for eight vehicles and ten trailers. When the licence was granted Mr Sandhu was the sole director, and a Mr David Hilton was the nominated transport manager.
(ii)	On 16/12/2013 the Traffic Commissioner’s office received a letter from Mr Hilton, dated 11/12/2013, in which he informed the Traffic Commissioner that he had never undertaken any work as the transport manager for the company. Mr Hilton said that he only became aware that he was recorded on the licence as a transport manager when applying to be the nominated transport manager for a different company.
(iii)	Mr Hilton explained that in March 2013 he was approached by Mr Sandhu, who asked Mr Hilton to assist him in applying for an operator’s licence. He also asked Mr Hilton to become transport manager for the proposed operator, CG Cargo Ltd. Mr Sandhu explained that he was not quite ready to send off the forms, as he needed to purchase the vehicles.
(iv)	Mr Hilton said that he helped Mr Sandhu to complete the forms and he gave Mr Sandhu his (Mr Hilton’s) Certificate of Professional Competence – because the original is always needed to support such an application.
(v)	Mr Hilton said that he has not received his CPC back and, because of this, he presumed that Mr Sandhu had not gone ahead with the application. Mr Hilton made numerous attempts to contact Mr Sandhu without success. Indeed, he has not been in touch since.
(vi)	Mr Hilton said that he had not undertaken any work as transport manager and he asked that his name be removed as transport manager from the operator’s licence for CG Cargo Ltd - “as I feel he has obtained this fraudulently from the traffic office”.
(vii)	Following receipt of this letter the Central Licensing Office wrote to the appellant operator asking for details of their nominated transport manager because it appeared that the company was operating without a person acting as transport manager. This letter requested that details of the nominated transport manager be supplied by 7/2/2014. No reply was received. A further letter dated 21/2/2014 was sent to the company, again without direct response. Instead, an application was received to nominate Mr Gavin John Charlesworth as transport manager.
(viii)	By a call-up letter dated 4/3/2014 the operator, and Mr Sandhu as director, were called to public inquiry. The material issues of concern were that the operator had breached the condition of its licence, namely to notify the Traffic Commissioner of events which affected professional competence, had apparently operated without a transport manager exerting effective and continuous control, and had breached the undertaking to inform the Traffic Commissioner immediately of changes affecting the licence. These matters also went to the question of good repute and professional competence.
(ix)	The call-up letter added that the Traffic Commissioner intended to consider whether Mr Charlesworth, described in the call-up letter as “the company’s proposed transport manager” would be able to carry out his duties, having regard to his other transport manager responsibilities.
(x)	The public inquiry took place on 10/4/2014. Mr Sandhu was present, as were Mr Hilton and Mr Charlesworth. Mr Hilton confirmed in evidence that he had never acted as a transport manager and he had mistakenly assumed that the application had not progressed because his CPC had not been returned to him by the Traffic Commissioner’s office. Mr Hilton said that Mr Sandhu had paid him one sum of £450 in return for Mr Hilton helping Mr Sandhu to complete all the paperwork and make the application, after which Mr Hilton had never seen or heard from Mr Sandhu again, despite efforts by Mr Hilton to make contact (if only to retrieve his CPC).
(xi)	In contrast, Mr Sandhu told the Traffic Commissioner in evidence that he gave Mr Hilton money every three months, and this was paid in cash. Mr Sandhu said that after three months he would have paid Mr Hilton £1600. He had asked Mr Hilton for receipts but he did not get any. In the end Mr Sandhu said that he paid £2,400 to Mr Hilton by way of three instalments of £800. The Traffic Commissioner pointed out that the operator was a limited company and for tax reasons (if no other) would have to keep a record of monies paid. However, when Mr Sandhu was pressed by the Traffic Commissioner for some evidence to support the suggestion that cash had been paid to Mr Hilton, Mr Sandhu said, “Money is paid in cash, that’s it”. 
(xii)	Mr Sandhu claimed that, in return for these payments, Mr Hilton came to the operator’s premises, “once a week or once a fortnight for 10 to 15 minutes” and he insisted, despite Mr Hilton’s complete denial, that Mr Hilton did undertake some duties as transport manager although he had no paperwork of any sort to prove this. The Traffic Commissioner then spent some time with Mr Sandhu, going through the various activities of a transport manager that would, in the normal course of events, involve some evidence that the transport manager existed, such as signatures, memos and other documentation. In due course the Traffic Commissioner said, “So far you have not produced a shred of evidence to substantiate what you are saying, but even if it was true, even if what you say was true, you would not have had a transport manager with continuous and effective management…”
(xiii)	The Traffic Commissioner reserved his decision and issued a written judgement dated 9/5/2014. The Traffic Commissioner found that this was not a case where the two different versions of events could possibly be explained by a misunderstanding. On the evidence it was clear to the Traffic Commissioner that either Mr Sandhu, or Mr Hilton, were not telling the truth and were attempting to mislead the Traffic Commissioner.
(xiv)	Having had an opportunity of watching, and listening to, the witnesses give evidence, and having considered the total absence of any corroborative paperwork, the Traffic Commissioner concluded that Mr Hilton had been entirely open and honest, and that Mr Sandhu had not been truthful. In reaching this conclusion the Traffic Commissioner noted the Mr Sandhu had been given plenty of opportunity to provide some tangible evidence of Mr Hilton’s involvement and, indeed, of the payments allegedly made. The Traffic Commissioner also considered that Mr Hilton had nothing to gain by making allegations against Mr Sandhu.
(xv)	The Traffic Commissioner concluded that Mr Sandhu had gained a competitive advantage by cheating the system and operating without a transport manager in place, and he decided that the operator’s licence held by CG Cargo Ltd deserved to be revoked at the earliest opportunity.
(xvi)	The Traffic Commissioner further found that Mr Sandhu ought to be kept out of the operator licensing system for a substantial period of time. Indeed, he added “there is no place for rogues like him in the operating system”. The Traffic Commissioner had regard to the Senior Traffic Commissioner’s Statutory Document Number 10, and concluded that there were a number of aggravating features. These including the sustained and calculated deceit by Mr Sandhu of the Traffic Commissioner’s office when the application for an operator’s licence was first made, the failure to have a transport manager for most of 2013, and the attempt to deceive the Traffic Commissioner at public inquiry whilst, at the same time, seeking to ruin an innocent individual’s livelihood. The Traffic Commissioner decided that Mr Sandhu’s conduct as a director merited disqualification for at least five years.

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

4)	Mr Newman withdrew a number of the grounds of appeal originally raised, leaving two grounds for consideration. Loss of repute and revocation were not challenged.

5)	The first ground of appeal put forward was that the Traffic Commissioner was wrong to find that CG Cargo Ltd did not have professional competence at the date of the public inquiry. The Traffic Commissioner had said at paragraph 25 of his decision that, from 26/2/2014, Mr Charlesworth had been on the licence as nominated transport manager for the appellant operator. Although the call-up letter had raised some issues as to whether or not Mr Charlesworth would be able to exert continuous an effective management and control, the Traffic Commissioner did not hear evidence from Mr Charlesworth at the public inquiry - which suggested that this was not an issue that the Traffic Commissioner wished to pursue. Indeed, at one point during the public inquiry, the Traffic Commissioner said “I do not have an interest in what the position is now”.

6)	We find nothing in this point. Pages 34 to 39 of the tribunal bundle show a copy of Form TM1, “Application to add a Transport Manager to a licence”. This form was completed by Mr Charlesworth, and the licence on which he was applying to be a transport manager is stated to be “CG Cargo Ltd”. The application form is dated 26/2/2014 (received 27/2/2014). The call–up letter dated 4/3/2014 refers to Mr Charlesworth as “proposed transport manager”, sets out Mr Charlesworth’s other known appointments, and raises the question of how Mr Charlesworth intended to carry out his duties and have effective and continuous control of the transport activities of the undertaking holding the operator’s licence.

7)	The statutory definition of transport manager in section 58 of the Goods Vehicles (Licensing of Operators) Act 1995, now amended by Regulation (EC) 1071/2009, means a natural person employed by an undertaking … who effectively and continuously manages the transport activities of that undertaking. Article 4.1 of Regulation (EC) 1071/2009 refers to that person having a genuine link to the undertaking, such as being an employee, director, owner or shareholder or administering it.

8)	The Traffic Commissioner had specifically raised questions about whether Mr Charlesworth would actually be able to serve as a transport manager as defined above, and we consider that the Traffic Commissioner was entitled to undertake an inquiry, should he wish. If such questions are formally raised then, unless the Traffic Commissioner is satisfied that the nominated CPC holder will be able to undertake continuous and effective control of the undertaking’s transport activities, the nominated person remains as described in the call-up letter – a proposed transport manager.

9)	In the event, the Traffic Commissioner focussed at the public inquiry upon the operator’s past failing to have a transport manager, and the operator’s attempted deception of the Traffic Commissioner and his office about the true position. We are not surprised that the Traffic Commissioner ultimately decided that he did not need to hear evidence about Mr Charlesworth since, as the evidence unfolded, it was clear that such an inquiry would only be worthwhile if the operator’s licence continued.

10)	Mr Newman’s second ground of appeal related to the period of disqualification imposed upon Mr Sandhu as director, which (he said) was too long, and disproportionate.

11)	Mr Newman invited the tribunal to consider the decision of David Finch t/a David Finch Haulage [2010] UKUT 284 (AAC) in which the Upper Tribunal had said that, “a three-year disqualification following a first public inquiry allows for little light at the end of the tunnel and effectively prevents an operator from hanging onto any aspects of the operation. It was towards the top end of fixed term disqualifications.” Moreover, said Mr Newman, the Traffic Commissioner should have taken into account that Mr Charlesworth had been put forward as a replacement transport manager, which showed that Mr Sandhu had, belatedly, recognised the error of his ways.

12)	The tribunal decision in David Finch pre-dates the issue of the Senior Traffic Commissioner’s Statutory Documents. The Traffic Commissioner was right to refer to the Statutory Documents and, in particular, to Document No 10.Here the Senior Traffic Commissioner states:

“74. Taking account of the guidance from the Upper Tribunal that each case must be looked at on its merits, Traffic Commissioners may wish to use as a starting point for a first public inquiry consideration of a disqualification period of between 1 and 3 years, but serious cases, where, for example, the operator deliberately puts life at risk and/or knowingly operates unsafe vehicles or allows drivers to falsify records, may merit disqualification of between 5 to 10 years or in certain cases for an indefinite period. It is always open to a disqualified person to make application for removal or reduction of the order. Unless there are exceptional circumstances, a disqualification of less than two years will not normally be reduced, and disqualification for longer or indefinite periods will not normally be reviewed, until half the period or 5 years of the disqualification have elapsed as applies.”

13)	In addition, the Statutory Document indicates that Traffic Commissioners will consider conduct generally in the context of a regulatory starting point ranging from ‘Low’ at the bottom end, up to ‘Severe’ at the top end:

CONDUCT 	REGULATORY STARTING POINT 	
Any conduct designed to strike at the relationship of trust between traffic commissioners and operators 	SEVERE 	
Deliberate acts or omissions that compromise road safety and/or result in the operator gaining a commercial advantage 	SEVERE to SERIOUS 	
Any conduct designed to mislead an enforcement agency or the Office of the Traffic Commissioner 	SEVERE to SERIOUS 	

14)	It is clear to us that the Senior Traffic Commissioner, following appropriate consultation with colleagues and the industries, has decided that there can be severe cases where, instead of an indefinite disqualification, a fixed term disqualification of 5 to 10 years is justified. Therefore, in the light of the Statutory Document, we consider that the decision in David Finch should not now be relied upon to criticise fixed term disqualifications of more than three years if, at a first public inquiry, the facts are such as to put the case into one or more of the categories referred to.

15)	In our view, the conduct of this operator, as found by the Traffic Commissioner, engages the ‘severe’ starting point in all three of the above categories. This was a bad case. The Traffic Commissioner found that Mr Sandhu never had any intention of utilising Mr Hilton’s services once he had obtained his operator’s licence. Then, when the matter was raised with Mr Sandhu, he attempted to claim that Mr Hilton had served as transport manager despite there being not a shred of evidence to show that he had done anything, or received any regular payments. Mr Sandhu’s evidence was, rightly, regarded as totally implausible and dishonest. Further, in an effort to exculpate himself, it was clear that Mr Sandhu was willing to try and damage Mr Hilton’s professional reputation. On the evidence, it is hard to impugn these conclusions. Consequently, we find no grounds to interfere with the Traffic Commissioner’s decision to disqualify Mr Sandhu, the sole director of the operator, for a period of five years.

16)	Finally, Mr Newman sought to draw comparisons with another case - which related to three different operators, two different transport managers, and featured Mr Sandhu as a driver. Amongst other things, that case involved tachograph issues and unauthorised use of operating centres. Mr Newman considered that the issues in that case were more serious than in the present case, and yet the action taken was less severe.

17)	We do not think it helpful to raise comparisons between cases where the facts are manifestly different, especially where the case raised for comparison is a first-instance decision, determined on its own facts, and not intended to set any precedents. In any event, all that such a comparison might prove is that the other case was decided with undue leniency. 

18)	The appeals of the operator, and of its director, are dismissed.

Judge Mark Hinchliffe, DCP
30 September 2014