Neutral Citation Number: [2014] UKUT 0425 (AAC)		Appeal No.  T/2014/58
IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
TRAFFIC COMMISSIONER APPEALS

ON APPEAL from the DECISION of
Richard Turfitt, Traffic Commissioner for the 
East of England Traffic Area dated 25 June 2014

Before:
Her Honour Judge J Beech, Judge of the Upper Tribunal
George Inch, Member of the Upper Tribunal
John Robinson, Member of the Upper Tribunal

Appellants:

ANGUS SMALES trading as
ANGUS SMALES EVENTING

Attendances:
For the Appellant: David Glover of Marshall Glover solicitors

Heard at: Field House, 15-25 Bream’s Buildings, London, EC4A 1DZ
Date of hearing: 16 September 2014
Date of decision:   22 September 2014

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that this appeal be DISMISSED and that the interim licence be terminated forthwith.

SUBJECT MATTER:-  Application for standard international licence; delay in nominating a Transport Manager; the ability of the nominated Transport Manager to exercise continuous and effective management.

CASES REFERRED TO:-  Bradley Fold Travel Ltd & Peter Wright v Secretary of State for Transport (2010) EWCA Civ. 695.

REASONS FOR DECISION

1.	This was an appeal from the decision of the Traffic Commissioner (“TC”) for the East of England Traffic Area made on 25 June 2014 when he refused Mr Smales’ application for a standard international operator’s licence authorising one vehicle under s.13A(2)(d) and s.13A(3) of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”), the TC not being satisfied that Mr Smales as proposed Transport Manager could exercise continuous and effective management of the operation of the vehicle. 
2.	The factual background to the appeal appears from the documents and the Traffic Commissioner’s written decision.  Mr Smales is a professional horse rider and trainer, participating in horse trials and events both in Great Britain and Ireland.  He is highly ranked within the British Events team.  In order to transport the horses he rides, he owns a 17.5 tonne horse transporter (“the vehicle”).  He had previously been granted a restricted operator’s licence for the operation of the vehicle but it transpired that he had been given incorrect advice by a member of the DVSA  staff as to the type of licence he required.  As a result, he was permitted to apply for a standard international licence and the fee for that application (which was made on the15 November 2011) was waived.  The nominated Transport Manager was Maurice Bailey.  An application for an interim licence was also made which was granted on 7 June 2012.  
3.	As a result of environmental objections being received in relation to the proposed operating centre, a public inquiry was held on 14 November 2012.  The Deputy Traffic Commissioner (“DTC”) Elizabeth Perrett found that the operating centre was suitable.  However, she was concerned about the arrangement Mr Smales had made with AAA Logistics Limited pending the application for the interim licence.  The impression he had given at that stage was that the company had taken over the running of the horse box which it had not.  The DTC adjourned the issues of good repute and professional competence pending the submission of further information not least because Mr Bailey, the proposed Transport Manager had failed to attend the hearing and had failed to provide requested information.  It was agreed by Mr Smales that John Potter, Transport Consultant, would undertake an audit of his systems by 31 January 2013.
4.	The public inquiry was reconvened on 11 April 2013.  Mr Bailey again failed to attend the hearing and as a result, the DTC could not be satisfied that Mr Smales was professionally competent or that he could meet the requirement of exercising continuous and effective management of the vehicle.  She did however hear evidence from Mr Potter whose audit had found systems to be wanting.  Mr Smales had contacted Mr Potter on a regular basis for advice and guidance and it had been agreed that a further audit would take place later that year.  Despite reservations about Mr Smales’ evidence concerning the role that AAA Logistics Limited had played in the operation of the vehicle giving rise to serious reservations as to whether a licence should be granted, the DTC was prepared to allow the interim licence to continue for a period of six months without a Transport Manager  having accepted an undertaking that Mr Potter would be retained to keep a “watching brief” by way of monthly visits to Mr Smales.  Upon the nomination and acceptance of a replacement Transport Manager, the full licence would be granted.  Mr Smales was warned that in the event of future problems of ANY kind (the DTC’s emphasis), the licence would be in jeopardy.  
5.	On 22 August 2013, Mr Smales wrote to the Office of the Traffic Commissioner (“OTC”) stating that his commitments in and around the Burghley Horse Trials meant that he would be unable to complete a CPC course and sit the CPC examination within the six month period of grace given to him.  He requested an extension of the period of grace and enclosed confirmation of a booking on a CPC course commencing 20 November 2013 and culminating with the examination on 6 December 2013.
6.	The application for an extension of the period of grace was considered and refused by the TC.  He was concerned that issues concerning professional competence and continuous and effective management of the vehicle operation had been raised at both public inquiries.  He determined that Mr Smales had “left it too late” to notify him that due to his commitments at Burghley (which would have been in his diary for some time), he was unable to sit the CPC examination.  Mr Smales was advised to nominate a suitably qualified Transport Manager by 11 October 2012 and provide a completed TM1 form with supporting documentation, failing which a further public inquiry would be called.  
7.	No further correspondence was received from Mr Smales and on 21 October 2013, a “propose to revoke” letter was sent to him.  On the same day, a TM1 form was received (dated 9 October 2013) nominating Kenneth Lane as Transport Manager (it appears that the form was sent to the incorrect office).  As a result of that form being received, no further action was taken on the “propose to revoke” letter.  However, on 5 November 2013, the OTC wrote to Mr Smales informing him that as Mr Lane’s CPC was acquired through grandfather rights, an Acquired Rights Certificate was needed.  Further, the TC was concerned about the hours Mr Lane already devoted to his Transport Manager duties on other licences.  Details were requested as to his working week and whether Mr Lane had received any Transport Manager refresher training.  Mr Smales was to respond to the letter by 19 November 2013.
8.	On 15 November 2013, Mr Smales made a written request for a further period of grace whilst Mr Lane’s nomination was being considered.  Mr Potter continued to hold a “watching brief” and would continue to perform “mini audits”.  He also provided Mr Smales with free advice.  Mr Smales confirmed that he had a drivers’ defect report book and that he undertook the necessary checks.  He also checked his own tachographs and they would be double checked by Mr Lane.  Mr Smales confirmed that he was to attend the CPC course commencing 20 November 2013 and the requested information from Mr Lane would follow.  
9.	No information was received from Mr Lane and as a result a second “propose to revoke” letter was sent on 2 December 2013.  A written response was requested by 24 December 2013.  A few days before that deadline, Mr Potter telephoned the OTC to enquire whether the licence would be revoked on 24 December 2013.  He indicated that Mr Smales would respond to the letter.  No correspondence was received until 23 January 2014 when the OTC received a TM1 form nominating Mr Smales himself as the proposed Transport Manager.  The letter enclosed his CPC certificate dated 16 January 2014.
10.	Mr Smales was notified that the TC was intending to hold a public inquiry by letter dated 19 May 2014.  An explanation for the long and unsatisfactory delay in calling Mr Smales to that public inquiry is not within the appeal papers.  The letter informed Mr Smales that the TC required to be satisfied that s.13(A)(2) and (3) of the Act were fulfilled.  The letter indicated that the chronology demonstrated that Mr Smales gave priority to his business activities over his licence obligations.  
11.	In response to the call up letter, Mr Glover wrote to the OTC in an unsuccessful attempt to resolve the issues without the need for a public inquiry.  He described the TC’s assessment of Mr Smales as set out in paragraph 10 above as “unduly harsh”; Mr Smales did not prioritise his commercial considerations over licence compliance.  He had engaged the services of a Transport Manager prior to the expiry of the period of grace and had continued to refer to Mr Potter and seek guidance and assistance from him.  He was now in a position to nominate himself as Transport Manager.  The vehicle was not extensively used and by way of example, between 9 October 2013 and 4 February 2014, it had only travelled a distance of 1996 kilometres.  Copies of driver defect report sheets were enclosed.  
12.	At the hearing which took place on 23 June 2014, Mr Glover represented Mr Smales.  The TC and Mr Glover ran through the history of the licence application.  Mr Glover stated that Mr Smales had encountered difficulties finding a suitable Transport Manager because the licence was for one vehicle.  
13.	The TC then went through the preventative maintenance inspection sheets (“PMI” sheets), driver defect reports and tachograph charts produced by Mr Smales.  He was told that the reason why different pens had been used to complete centrefield details on individual tachograph charts was because Mr Smales had a number of different pens in his cab.  It was accepted that Mr Smales was not recording his daily walk-round checks on his tachograph charts and he would rectify the position.  It was accepted that this was not satisfactory bearing in mind that he had only recently qualified as a Transport Manager and had recently completed his CPC driver training.  In relation to a number of PMI sheets which identified defects which should have been picked up on a driver walk round check, Mr Smales indicated that in some instances, he had identified the defects on the day he took the vehicle to be inspected, which would have been the night before.   Some defects would develop on the journey.  He would then discuss the defects with Mr Nibloe, his maintenance contractor.  As the vehicle was taken in the night before the inspection, there would be no driver defect report for the date of the inspection itself.  He accepted that in some instances, he had missed defects during his checks and that he had failed to sign off defects as rectified. The TC was concerned about repeated reference to some corrosion on the running board of the vehicle.  Mr Smales advised that the corrosion did not require immediate attention and that he had been advised to keep an eye on it.  The vehicle passed its MOT test the following week.  The TC was concerned about the maintenance contractor’s use of out of date PMI sheets which might indicate that he was not following the guidance in the Guide to Maintaining Roadworthiness.   This gave rise to a concern about Mr Smales’ ability to monitor the work of his maintenance contractor.  As for his tachograph charts, the TC found them to be badly damaged in some instances (a puppy had gained access to them) with storage in a plastic box (according to Mr Potter who gave evidence) contributing to their poor state.  Envelopes were required.  The TC further identified that Mr Smales had failed to keep a record of his weekly working time under the Working Time Directive provisions, he being under the impression that he was not required to do so as a result of a relaxation of the rules concerning the recording of other work on tachograph charts if the driver could be categorised as occasional. 
14.	John Potter told the TC that he had been advising Mr Smales since November 2012.  Mr Smales visited him once a month to show him his tachographs (he produced a schedule for the TC) and they discussed any other matters which Mr Smales raised.  He also called Mr Potter when he felt it necessary to do so.  Mr Potter described Mr Smales as “honest without anything to hide”.  It was Mr Potter who had provided Mr Smales with his driver CPC training during which they discussed daily walk round checks and routines.  The vehicle was little used.  From 13 April 2014 to the date of the hearing, the vehicle had been used for 59 days and on 28 of those days, it had travelled less than 100kms.  It was taken to Ireland once a year.  The tachograph charts were all in order.  He was able to confirm that other operators used Mr Nebloe as a maintenance contractor although he accepted that there needed to be dialogue with him.  The vehicle always passed its MOT on the first attempt.  What Mr Smales needed was a report sheet to give to the contractor which highlighted all of the defects found immediately leading up to the inspection.  Mr Potter considered that Mr Smales wanted to learn and was attending a new operators’ awareness course.  He confirmed that Mr Smales had been advised by the DVSA in April 2013 that as he was only an occasional driver, he did not need to keep records of other work under the drivers hours rules although he did need to keep a record under the working time directive provisions.
15.	In his closing submissions, Mr Glover submitted that Mr Smales had made great efforts to be in the position that he was in and that whilst there were shortfalls in his systems, they were not fatal to his application.  He was willing to learn and continued to have access to experienced advice from Mr Potter.  He was professionally competent and of good repute.  
16.	 In his written decision dated 25 June 2014, the TC noted DTC Perrett’s reservations about granting a licence to Mr Smales but she had allowed the interim licence to continue with an undertaking that Mr Potter hold a “watching brief”.  The DTC found that Mr Smales good repute was tarnished.  
17.	The TC noted Mr Potter’s assessment of Mr Smales that he wanted to “get things right”.  However, he left it late in the day to notify the TC of his problems in identifying a suitable Transport Manager, referring to other business concerns.  The period of grace could not be extended which left Mr Smales with four weeks to find a Transport Manager and when an application was submitted it was and remained incomplete.  Mr Smales’ decision to continue without a suitable Transport Manager raised questions about his ability to act as his own Transport Manager.
18.	The evidence the TC heard gave him cause for further concern.  Mr Smales had been acting as Transport Manager from January 2014 although not accepted on the licence.  As at the date of the public inquiry, the licence failed to meet the mandatory and continuing requirements.  The TC reminded himself of the wording of Article 4 of Regulation (EC) No. 1071/2009 which requires a Transport Manager to be a natural person who is of good repute, holding a formal qualification and who effectively and continuously manages the transport activities.  The TC reminded himself of the matters set out in paragraph 13 above and paragraph 26 of the Senior Traffic Commissioner’s Statutory Document No.3 on Transport Managers which stated that “Persons who control an entity which operates heavy goods or public service vehicles must have sufficient knowledge to exercise proper oversight”.  Mr Smales had failed to establish professional competence during the period of grace and thereafter, and whilst Mr Smales was now himself professionally competent the TC was not satisfied that he was capable of meeting the statutory requirement.  It was a pity that he had not availed himself of an opportunity to work with an experienced Transport Manager and he had failed to take a series of steps whereby he could demonstrate his ability to ensure compliance on the interim licence.  He had further demonstrated obvious hesitancy and confusion during the course of the hearing.  As a result, the TC concluded that Mr Smales had failed to satisfy him that he was able to exercise continuous and effective management of his vehicle operation and his application for a standard licence was refused.
19.	At the hearing of this appeal, Mr Glover appeared on behalf of Mr Smales and provided us with a skeleton argument for which we were grateful.  He took the Tribunal through the main points concerning the paperwork produced by Mr Smales at the public inquiry.  He submitted that the TC’s negative assessment of the shortfalls in the paperwork was wrong.  The TC had indicated at the conclusion of the public inquiry in his oral decision that he was not so concerned about the issue of good repute.  He went on “.. you left the nomination of a Transport Manager far too late.  There has been no Transport Manager on this interim licence since October, but I don’t view that as absolutely fatal, albeit it doesn’t help you.  But my main concern is this (sic) ability to exercise effective and continuous management”.  Mr Glover submitted that given those observations, the TC’s determination that Mr Smales could not exercise continuous and effective management was not supported by the evidence.  Mr Glover acknowledged that the Tribunal does not lightly interfere with findings of fact made by a TC but such interference was required in this case. The positive features of the evidence were that Mr Smales did write to the OTC in August 2013 to inform the TC of his difficulties with professional competence and he did then nominate Mr Lane.  He was in contact with his maintenance contractor and was now a qualified Transport Manager.  Whilst Mr Smales acknowledged that all was not perfect, the problems identified with the paperwork were not sufficient to justify the finding made and the appeal should be allowed.  
20.	The Tribunal is satisfied that the decision of the TC was based on the history of the interim licence and its lack of professional competence and the TC’s assessment of whether Mr Smales had satisfied him at the date of the public inquiry that he could exercise continuous and effective management.  The history of the licence on its own was not fatal to the application but weighed heavily into the balance in the TC’s assessment at the date of the public inquiry.  We accept that the deficiencies in the paperwork were not the worst that we have seen.  However, those deficiencies and the TC’s unease over Mr Smales’ ability to effectively scrutinise the work of his maintenance contractor were rightly put into the balance.  It is clear that Mr Smales did not leave the TC with the impression that he had either the knowledge or the confidence to manage his operation, although he did accept that Mr Smales was willing to learn.  
21.	We have frequently stated that we will not lightly interfere with assessments made of operators by TC’s who have had the benefit of seeing them give evidence at a public inquiry.  Neither will we lightly interfere with findings of fact unless it can be stated that those findings were either disproportionate or plainly wrong.  Whilst Mr Glover submitted that this is a case where the Tribunal should find that the TC’s findings were either disproportionate or plainly wrong, we disagree.  The combination of the history of operation when the licence lacked professional competence, Mr Smales’ lack of pro-activity in relation to professional competence, the shortfalls in his paperwork whilst he was acting his own Transport Manager entitled the TC to come to the decision that he did. We cannot find that we are impelled by reason of fact or law to interfere with the decision as per the test set out in Bradley Fold (supra).  It is of course open to Mr Smales to re-apply for a licence immediately along with an application for an interim licence.  He should only make such applications when he is confident that he is able to demonstrate that he has addressed all the deficiencies in his systems, he has received and implemented the appropriate advice in relation to working time records and is able to demonstrate that his maintenance contractor is maintaining his vehicle in accordance with the Guide to Maintaining Roadworthiness.  Of course as a CPC holder, professional competence of itself will be satisfied.  However, the issue will be whether, having experienced three public inquiries and an appeal to this Tribunal, Mr Smales has become sufficiently focused on the responsibilities he has as a Transport Manager and can confidently  show that he is able to exercise continuous and effective management of his operation.
22.	The appeal is dismissed.  It follows that the interim licence is terminated forthwith under s.29(2) of the Act.

Her Honour Judge J Beech
22 September 2014