Neutral Citation Number: [2010] UKUT 148 (AAC)

Appeal No.  T/2010/2 & T/2010/4
IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
TRAFFIC COMMISSIONER APPEALS

ON APPEAL FROM THE DECISION OF
A.	LESTER MADRELL DEPUTY TRAFFIC COMMISSIONER for the 
NORTH WESTERN TRAFFIC AREA Dated 17 December 2009

Before:
Judge Beech
Leslie Milliken
David Yeomans

Appellants:
(1)	COLIN FLETCHER t/a MCUK HAULAGE &
PAUL FLETCHER
(2)	DAVID DORING t/a DORING TRANSPORT

	 
Attendances:
For the Appellants:  James Backhouse of Backhouse Jones Solicitors appearing on behalf of all Appellants

Heard at:	Victory House, 30-34 Kingsway, London, WC2B 6EX
Date of hearing:	23 March 2010
Date of decision:	15 April 2010

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that the appeals be DISMISSED and that the interim licence of Colin Fletcher be revoked with effect from 23.59 on 4 May 2010

REASONS FOR DECISION

1.	This was an appeal from the decision of the Deputy Traffic Commissioner for the North Western Traffic Area made on 17 December 2009 when he revoked the operator’s licence of Colin Fletcher and Paul Fletcher under s.27(1(a) of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”); refused the application of Colin Fletcher for an operator’s licence under s.13(3(a)&(c) of the Act; found that Paul Fletcher was no longer of good repute as a transport manager; refused the application of David Doring for an operator’s licence under s.13(3)(a) of the Act.  

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

(i)	On 17 August 1999 Paul Fletcher and Colin Fletcher were granted a standard international goods vehicle operator’s licence authorising three vehicles (“the partnership licence”).  Paul Fletcher was also the nominated transport manager.

(ii)	In 2001, the partnership came to an end and Colin Fletcher continued to operate on his own account using the partnership licence.  Paul Fletcher continued as Transport Manager.  The Traffic Commissioner was not told of the changes.

(iii)	In 2004, Colin Fletcher completed the partnership licence review checklist and did not inform the Traffic Commissioner of the changes in the operation of the licence.

(iv)	In March 2008, David Doring (“Mr Doring”), a friend of Colin Fletcher, bought vehicle X635 EFL and Colin Fletcher agreed to authorise the vehicle on the partnership licence as a favour.  Mr Doring operated the vehicle, displaying a partnership licence disc until he was stopped by VOSA in January 2009 at which stage he informed VOSA of the arrangement.  He was advised to cease using the vehicle and to apply for his own operator’s licence, which he did.  He was subsequently prosecuted for operating without an operator’s licence and on 8 September 2009, Mr Doring was fined £557.

(v)	By an application dated 5 February 2009, Mr Doring applied for a standard national operator’s licence authorising one vehicle.  His nominated transport manager was Keith Franey.  An application for an interim licence was refused.

(vi)	By an application dated 7 April 2009, Colin Fletcher applied for a standard national operator’s licence authorising one vehicle and one trailer.  His nominated transport manager was Paul Fletcher.  The application revealed that on 25 January 2008, Colin Fletcher received a fixed penalty notice for using a mobile phone whilst driving a car; he was fined £80 and his licence was endorsed with three points; on 2 October 2008, Paul Fletcher was convicted of speeding and was fined £100 and his licence was endorsed with three points. Neither of these convictions had been notified to the Traffic Commissioner.  

(vii)	On 7 May 2009, Colin Fletcher was granted an interim licence.  

(viii)	By letters dated 20 October 2009, Paul and Colin Fletcher were called to a public inquiry for the Deputy Traffic Commissioner to consider their good repute; Colin Fletcher’s application for an operator’s licence was also to be considered; Mr Doring was called to the same public inquiry for the Deputy Traffic Commissioner to consider his application for an operator’s licence.  All three Appellants were represented by Mark Davies of Backhouse Jones, solicitors.  The chronology as set out above was accepted.

(ix)	 Paul Fletcher told the Deputy Traffic Commissioner that he had originally operated as a sole trader from 1997 (the year in which he obtained his CPC) and that he had then entered into a partnership arrangement with his brother Colin, in 1999.  This came to an end in 2001 when he started driving for somebody else and it was a genuine oversight that neither he nor his brother notified the Traffic Commissioner of the change in relation to the operator’s licence.  Paul Fletcher did however, continue to act as transport manager for the partnership licence and had checked tachographs and maintenance files and had also checked for defects and looked over the vehicles.  He had not seen the checklist completed by his brother in 2004.  His explanation for failing to notify the Traffic Commissioner of his speeding conviction was that when he had taken his CPC examination in 1997, such convictions were not notifiable.  He had not been aware that Mr Doring was using one of the partnership discs until he was told in January 2009.  He had not been told by his brother before then and he thought that this had been a genuine mistake on his brother’s part.  He himself was no longer driving, having moved into property management, although that did not prevent him from undertaking his role as transport manager for his brother.  

(x)	Colin Fletcher told the Deputy Traffic Commissioner that he had been driving goods vehicles since before 1999.  When the partnership had come to an end, he had carried on the business with his brother continuing as transport manager.  He was not aware that he should have notified the Traffic Commissioner of the change or that he should have notified the changes on the 2004 checklist.  His failure to notify the Traffic Commissioner of his fixed penalty notice for using a mobile phone whilst driving was not a deliberate deception.  He had known Mr Doring for four or five years as a result of Mr Doring parking in the same yard whilst working for a Welsh haulier.  They had become friends and when Mr Doring had said that he would like to buy his own vehicle, Colin Fletcher agreed to help him out by lending him a disc without any reward for doing so.  The arrangement came into existence in March 2008.  He did not realise that he was not entitled to do that.  Colin Fletcher did not think that he had told his brother of the arrangement and Paul Fletcher did not comment upon it.  Mr Doring looked after his own maintenance and records and found his own work. No one else had used the partnership’s discs.  

(xi)	Colin Fletcher told the Deputy Traffic Commissioner that he had stopped operating and had made an application for his own licence following an interview with VOSA arising out of Mr Doring being stopped.  VOSA looked over his records and his operating centre and were satisfied with his operation.   In the month between his application being submitted and the grant of his interim licence, he had worked as a driver for Sefton Transport.  If he were not granted an operator’s licence he would struggle to find work.  With an operator’s licence, he has work from twelve different companies.  His intention was to be a sole trader and pass the CPC examinations.  He had also engaged the services of Robinson Road Transport Consultants to audit his systems were he to be granted a licence.  There was no longer any link between Colin Fletcher and Mr Doring.

(xii)	Mr Doring told the Deputy Traffic Commissioner that he had been driving goods vehicles since he was 22 years of age.  He had decided to operate a vehicle because he had been offered work if he owned his own vehicle.  He thought that there was nothing wrong with borrowing a disc from Colin Fletcher and did not attempt to hide the situation from VOSA when he was asked about it.  He had borrowed on his mortgage to purchase the vehicle and he was aware that work was still available.  Since he was stopped by VOSA he had been driving for an agency.  He confirmed that he had not paid Colin Fletcher for use of the disc and he had retained his own records.  If he were to be granted a licence, Mr Doring would employ a transport manager at a cost of £200 per month and he would sit the CPC examinations and he too had engaged the services of Mr Robinson in order to undertake audits of his systems.  He accepted that whilst he was using Colin Fletcher’s disc, no one was checking his systems or his paperwork.

(xiii)	At the conclusion of the evidence, the Deputy Traffic Commissioner stated that he was now facing a very different situation to that which he thought he was facing at the outset of the hearing and that he would not “overlook” the frankness of the three Appellants although matters were very serious.

(xiv)	In his closing submissions, Mr Davies stated that all three Appellants had acted naively and had been open and honest in relation to the circumstances giving rise to the use of the partnership licence by Colin Fletcher and the use of the partnership’s disc by Mr Doring.  As soon as Colin Fletcher and Mr Doring were advised to stop operating and apply for a licence that is what they did.  They had both used the services of Mr Robinson in order to ensure that all of their systems were appropriate and compliant.  It followed that there should be no reason why both Appellants could not be trusted to run a compliant operation in the future.  

(xv)	In his written decision dated 17 December 2009, the Deputy Traffic Commissioner found that the only issue with which he was concerned was good repute and that he should have regard to the failure on the part of Colin and Paul Fletcher to notify the Traffic Commissioner of the change in circumstances relating to the partnership licence and the unlawful offering and use of the partnership licence disc.  He stated “I consider it right to do so in this case because what has occurred strikes at the very root of the operator licence system and made a mockery of those who do order their affairs as to comply with the law.  Persons who use schemes to enable them to operate large goods vehicles when they are not entitled to do gain an unfair commercial advantage over the compliant”.  Upon the evidence he found that Paul Fletcher was performing his duties as a transport manager and was regularly involved with Colin Fletcher’s operation.  The Deputy Traffic Commissioner did not accept that Paul Fletcher had not been told about the arrangement with Mr Doring or was not aware of it.  The evidence to that effect stretched credibility beyond breaking point.  Paul Fletcher therefore knew about the arrangement and condoned it and he would have known that it was illegal.  To find otherwise would mean that Colin Fletcher had not told his brother about the arrangement because he knew that it was illegal and that Paul Fletcher had failed in the most fundamental aspect of his duties as a transport manager, namely to know what vehicles were specified on the licence.  Save for this aspect of the evidence, the Deputy Traffic Commissioner found that all three Appellants were frank about what had occurred and had not attempted to hide the position from VOSA although their evidence about lack of knowledge of the illegality of the arrangement was unconvincing.  

(xvi)	The Deputy Traffic Commissioner concluded that the conduct of Colin and Paul Fletcher was so serious that they should lose their good repute and that accordingly, their partnership licence must be revoked, Paul Fletcher could no longer act as a transport manager and the application of Colin Fletcher for an operator’s licence must be refused. As for Mr Doring, as he was knowingly a party to the arrangement for financial gain, he had failed to establish his good repute and his application for a licence was refused.  

(xvii)	The Deputy Traffic Commissioner considered that the Appellants will have learnt their lesson as a result of the events leading to the public inquiry and by reason of the public inquiry and his decisions.  Paul and Colin Fletcher should demonstrate some months of blame-free activity and willingness to familiarise or re-familiarise themselves with the law relating to operator licensing before they had some prospects of convincing a Traffic Commissioner that they could be trusted.

3.	 At the hearing of this appeal, the Appellants were represented by James Backhouse, solicitor, who submitted a skeleton argument for which we were grateful.  His first point was that the good repute of Paul Fletcher as transport manager had not been raised in the call up letter and that accordingly, the Deputy Traffic Commissioner had no jurisdiction to make a determination on that matter.  Mr Backhouse did however accept that having been called up as a licence holder along with his brother, Paul Fletcher’s good repute had been raised and that the loss of repute as an individual inevitably had adverse consequences on his repute as a transport manager.  Further, Paul Fletcher was legally represented and no request for an adjournment was made. Accordingly, there is nothing of substance in this point.

4.	Mr Backhouse submitted that the evidence that was before the Deputy Traffic Commissioner did not justify the conclusions to which he came.  “Very good evidence” is required to justify a determination that the Appellants colluded in an unlawful arrangement.  Such evidence was absent in this case. The Appellants had been honest and forthright not only with VOSA but with the Deputy Traffic Commissioner.  There had been no attempt at obfuscation and the circumstances in which Mr Doring had used one of the partnership’s discs were not such that they indicated any attempt to obscure any greater criminality other than the wrongful use of a disc by those who did not consider such an arrangement to be unlawful and there was no evidence that Colin Fletcher or Mr Doring did believe that their arrangement was unlawful.  Further, as Mr Doring had only been charged with an offence of unlawful operation rather than an offence of using a licence disc with intent to deceive, that indicated that VOSA considered Mr Doring to be an honest but naive individual.  This opinion is carried through to the Deputy Traffic Commissioner’s description of all three Appellants as being “frank”.   There was no motive for the unlawful arrangement.  As soon as Colin Fletcher and Mr Doring were advised that their arrangement was unlawful and that in the case of Colin Fletcher, that he could not operate vehicles on the partnership’s licence, both Appellants ceased operating their vehicles, made applications for new licences and have subsequently “ticked all of the boxes” in relation to those applications.  In relation to Mr Doring, the only gain in not obtaining his own licence in the first place was the savings made in not employing a transport manager.  He had in every other respect, during his ten months of unlawful operation, operated his vehicle compliantly.  

5.	Mr Backhouse submitted that the decision of the Deputy Traffic Commissioner in relation to Mr Doring was particularly hard. It had taken ten months for his application to be considered at the public inquiry during which time, he had not operated his vehicle because, unlike Colin Fletcher, he had not been granted an interim licence.  He had also engaged the services of Mr Robinson, Transport Consultant to monitor his operation in the event that he was to be granted a licence and he was sitting the CPC examinations.  The Deputy Traffic Commissioner failed to take these matters into consideration when judging Mr Doring’s good repute as at the date of the public inquiry.  

6.	As for Colin Fletcher’s use of the partnership licence once the partnership had come to an end, that was another example of naivety on his part along with the return of the 2004 check list without notifying the relevant changes.  His failures in relation to this licence along with the unlawful arrangement that he had with Mr Doring should be weighed in the balance against his blemish free operating history since 1999 and his compliant operation under an interim licence since May 2009.  Mr Backhouse did however accept that Colin Fletcher was in a more difficult position than Mr Doring as he was the licence holder and that unlawful arrangements such as that with which this appeal is concerned do strike at the heart of the licensing system.  Be that as it may, for all of the above reasons, Mr Backhouse submitted that the Deputy Traffic Commissioner’s decisions in respect of all three Appellants should be set aside, the applications for operator’s licences by Colin Fletcher and Mr Doring should be granted and Paul Fletcher should be found to be of good repute.

7.	Mr Backhouse’s concession that the facilitation of unlawful operation of goods vehicles strikes at the heart of the licensing system was properly made.  In this case, whilst only one vehicle was involved, Mr Doring was able to operate outside the regulatory system for ten months.  We do not agree that the only benefit to him of such unlawful operation was the financial saving incidental to not having a nominated transport manager.  In failing to apply for an operator’s licence from the outset, he avoided the need to satisfy the Traffic Commissioner of all the matters set out in s.13 of the 1995 Act and in particular, the requirement to be of appropriate financial standing.  

8.	We do not accept that there was no evidence upon which the Deputy Traffic Commissioner could conclude that Paul Fletcher must have known about the arrangement and that all three Appellants must have known that the arrangement was unlawful.  The Deputy Traffic Commissioner’s reasons for his conclusions are set out in paragraph 2(xv)) above and are well made out.  Further, the Deputy Traffic Commissioner relied upon his assessment of the Appellants as they gave evidence and he concluded that all three Appellants were unconvincing as witnesses “especially as respects the fundamental issue of knowledge of the illegality of what was on going on and, in Paul Fletcher’s case, as respect whether Paul knew of it at all”.   He was in the best position to assess the credibility of the witnesses and this he clearly did.  In those circumstances, the Deputy Traffic Commissioner was entitled to come to the view that the Appellants had acted illegally in the facilitation and use of a disc by Mr Doring for a period covering ten months.  That unlawful activity only came to an end when Mr Doring was stopped by VOSA.  Whilst he and the other Appellants were honest and frank about the arrangement, that does not detract from the seriousness of the unlawful activity.  It simply means that attempted deception after the event did not feature as an aggravating feature.  The Deputy Traffic Commissioner did make the assessment of whether good repute was lost and remained so by considering the Appellants’ position as at the date of the public inquiry and we are satisfied that his determination that the conduct of Colin Fletcher and Paul Fletcher was so serious that the determination that their repute was lost cannot be criticised.  They facilitated the unlawful conduct and permitted it to continue.  The fact that Colin Fletcher (surprisingly in the circumstances) had been granted an interim licence in May 2009 and had operated compliantly since that time, whilst a matter to be taken into account, was not sufficient in the circumstances, for either brother to have regained his good repute.  In the circumstances, the appeals in respect of Paul Fletcher and Colin Fletcher fail and the interim licence held by Colin Fletcher is revoked.

9.	Mr Doring is in a different position.  He had never held an operator’s licence, although we do not accept Mr Backhouse’s submissions that he was unaware of the requirements of operator regulation.  He has driven commercial vehicles since the age of 22 and had been able to operate his vehicle for some ten months compliantly, other than having a licence and a transport manager.  His compliance indicates a greater degree of knowledge of the regulatory system than Mr Backhouse asserts.  As we have already stated, we are not satisfied that the Deputy Traffic Commissioner’s decision in respect of Mr Doring’s knowledge of unlawful activity is one which can be criticised.  However, we do consider his position to be less serious than that of Paul and Colin Fletcher and whilst his repute remained lost as at the date of the public inquiry, the fact that Mr Doring has not operated his vehicle since January 2009, a period of some fifteen months, we are satisfied that this will have acted as a salutary lesson, one which Colin Fletcher had not had.  We consider that an early re-assessment of Mr Doring’s good repute may well result in a more favourable outcome than that arising out of the public inquiry, held some eleven months after Mr Doring ceased to operate.  We consider that the Deputy Traffic Commissioner’s advice to Paul and Colin Fletcher that if they were to demonstrate some months of blame-free activity and willingness to familiarise or re-familiarise themselves with the laws relating to operator licensing, may well apply to Mr Doring now that fifteen months has passed without him coming to the attention of VOSA.  Whilst we would not wish to “tie the hands” of any Traffic Commissioner, Mr Doring may well be able now to demonstrate that he can be trusted within the haulage industry.  As we are concerned with the propriety of the Deputy Traffic Commissioner’s decision as at 17 December 2009, we are unable to make that assessment ourselves at this stage, so in the circumstances, Mr Doring’s appeal also fails.  It will be for Mr Doring and his advisors to determine when a fresh application for a licence should be made.

Her Honour Judge Beech
15 April 2010