Neutral Citation Number: [2012] UKUT 422 (AAC)

Appeal No.  T/2012/50

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

 

ON APPEAL from the DECISION of Patrick Mulvenna DEPUTY TRAFFIC COMMISSIONER for the North Western Traffic Area

Dated 9 August 2012

 

 

 

Before:

H. H. Michael Brodrick, Judge of the Upper Tribunal

Leslie Milliken Member of the Upper Tribunal

George Inch Member of the Upper Tribunal

 

 

Appellant:

CHARLIE ROBERTS Ltd. t/a MAN EURO

 

 

 

 

Attendances:

For the Appellant: The Appellant invited the Tribunal to hear and determine the appeal in his absence.

 

 

Heard at: Victory House, 30-34 Kingsway, London

Date of hearing: 9 November 2012

Date of decision: 23 November 2012

 

 

DECISION OF THE UPPER TRIBUNAL

 

IT IS HEREBY ORDERED that this appeal be DISMISSED.

 

 

SUBJECT MATTER:- Repute, fitness to hold a licence; Professional Competence; Financial Standing.

 

CASES REFERRED TO:- JC Stephenson & TE Turner (Trading as J&T Transport) & Thomas McHugh and the Department of the Environment, Transport and the Regions Appeals 9/2000 & 10/2000.

 

REASONS FOR DECISION

 

 

1.           This is an appeal from the decision of the Deputy Traffic Commissioner for the North Western Traffic Area to refuse the Appellant’s application for a standard national goods vehicle operator’s licence.

2.          The factual background to this appeal appears from the documents and the Traffic Commissioner’s decision and is as follows:-

(i)                   On 19 July 2010 the Appellant was notified that its application for a standard national goods vehicle operator’s licence would be considered at a Public Inquiry on 23 August 2010.  The nominated Transport Manager was required to attend.  The letter explained that the Traffic Commissioner was concerned that the Appellant did not meet the requirement to be of good repute, due to undisclosed convictions, [see paragraph 2(iii) & (iv) below], and that it did not meet the requirement to be professionally competent, due to the commitments of the nominated Transport Manager.

(ii)                 On 24 August 2010 the Appellant’s application for a standard national operator’s licence was refused on the ground that the convictions of the sole Director of the Appellant company, Norman Charles Roberts, (“Mr Roberts”), which had not been notified, were relevant convictions and that his previous conduct related to the Appellant company’s fitness to hold a licence.  The decision of the Deputy Traffic Commissioner concluded with these words:

“The operator will have to establish a period of sustained rehabilitation before repute can be regained.  I take the opportunity to stress that there might well come a time in the future where notwithstanding the convictions, it might be possible for the applicant company to show that it was of good repute despite the convictions of its director”.

(iii)                On 20 March 2012 the appellant made a second application for a standard national goods vehicle operator’s licence authorising one vehicle and one trailer.  The application stated that the sole director of the Appellant company remained Mr Roberts and that on 21 February 2008 he had been convicted before Manchester Crown Court of an unspecified offence in respect of which he received 9 months imprisonment, which was suspended.

(iv)                In a letter also dated 20 March 2012 Mr Roberts gave further information about the conviction.  He said that he had been charged with failing to notify the Department of Health and Social Security of a change in circumstances.  He said that he had been unemployed and in receipt of income support and that the offence arose when a relative died and left him some money, which he failed to declare.  The sentence of 9 months imprisonment was suspended for 2 years.  In addition he was ordered to pay £250 towards the costs.  He added that he was of good character before this conviction and had not been in trouble since.

(v)                 On about 6 April 2012 a linked application was made to add David Brian Reeves as the Transport Manager on the Appellant’s licence, (if granted).

(vi)                The Appellant applied for an Interim Licence.  On 4 May 2012 the OTC wrote to the Appellant explaining that a decision on the application for an Interim Licence had been deferred pending receipt of outstanding information, in particular, financial information, a maintenance contract, further details from the proposed Transport Manager and evidence of a fresh advertisement.

(vii)              On 30 May 2012 the OTC wrote to the Appellant as a ‘final attempt’ to resolve the outstanding issues by correspondence.  The Appellant was requested to submit the outstanding material by 13 June 2012.

(viii)             On 8 June 2012 the Appellant replied.  He enclosed a new advertisement and a maintenance contract.  He said that Mr Reeves would provide a breakdown of his working week, (which he did), and that he had £2,000 available through his wife and £1,400 available through a credit card to contribute to the financial requirement.

(ix)                On 26 June 2012 the OTC notified the Appellant that its application for an Interim Licence had been refused.

(x)                 On 9 July 2012 the Office of the Traffic Commissioner, (“OTC”), notified the Appellant that the Traffic Commissioner intended to hold a Public Inquiry on 8 August 2012 at which the Appellant’s application would be considered.  The letter went on to explain that the Traffic Commissioner was particularly concerned as to whether the Appellant met the requirements to be of good repute and professional competence.  The letter set out the evidence, which the Traffic Commissioner would consider at the Public Inquiry, it also explained that the Appellant would need to show that a sum of approximately £7,700 was readily available in order to satisfy the requirement to be of appropriate financial standing.

(xi)                The Public Inquiry took place before the Deputy Traffic Commissioner on 8 August 2012.  Mr Roberts was present on behalf of the Appellant and he gave evidence.  In answer to the Deputy Traffic Commissioner he explained the circumstances of the conviction, which we have summarised above.  He added that he had pleaded guilty and that he had successfully completed the 200 hours community service, which formed part of the sentence.  He said that he had not disclosed this conviction on the first application for an operator’s licence because he thought that it was a ‘civil matter’ because the Police had not been involved.  However he went on to say that it had “definitely opened my eyes to things”.  He added that his only experience of the transport industry was as a driver and a vehicle fitter.  He acknowledged that he had failed a CPC course two years earlier.  He admitted that he was “not too familiar with the laws of being an operator, that’s why I have employed the services of a CPC holder to oversee anything that I do and that needs to be done”.

(xii)               The Deputy Traffic Commissioner asked him about some bank statements, which did not name the account holder.  He said that they were the bank statements for an account in the name of the Appellant.  Mr Roberts explained that the account received his wages from an agency and that it was used for personal expenditure as well as paying ‘business’ bills.  Further questioning established that it was not clear how much of the money belonged to the Appellant company and how much to Mr Roberts personally, though Mr Roberts did say that the company did not receive income from any other source.  He denied that the use of a company was a device to avoid tax.

(xiii)             The Deputy Traffic Commissioner gave a written decision dated 9 August 2012.  He summarised the background and the evidence, which we have set out above.  He then gave a full explanation of the relevant legislation and statutory guidance in relation to good repute, Transport Managers and financial standing before turning to an assessment of the evidence.

(xiv)             In relation to Mr Roberts the Deputy Traffic Commissioner concluded that he had an imperfect understanding of the nature of a limited company, of his role as the sole director of such a company and of the fact that he and the company were separate legal entities.  He went on to decide that while Mr Roberts had not deliberately misled him his evidence had to be treated with some reserve in view of the fact that he could not understand the different roles of a company on the one hand and an individual on the other.

(xv)              The Deputy Traffic Commissioner then considered whether the Appellant was of good repute and whether information as to the previous conduct of Mr Roberts appeared to relate to the Appellant’s fitness to hold a licence.  In reaching his decision that the Appellant was not of good repute and not fit to hold an operator’s licence the Deputy Traffic Commissioner took into account the convictions set out at paragraph 2(iii) & (iv) and his assessment that there was a high likelihood of non-compliance with the undertakings set out on the application for an operator’s licence.

(xvi)             Turning to the Transport Manager and the requirement to demonstrate professional competence the Deputy Traffic Commissioner pointed out that one of the possible Transport Managers lived and worked in Lincolnshire, a significant distance from the proposed operating centre at Salford, and that he proposed to carry out his duties ‘in the evenings or in spare time at weekends’, adding that he would be available on the telephone at all times.  Without making any judgment on this possible Transport Manager’s competence or repute the Deputy Traffic Commissioner concluded that he would be unable to devote enough time to the business to discharge his responsibility to provide continuous and effective responsibility for the transport activities of the Appellant.  The Deputy Traffic Commissioner concluded that he was unable to substitute the alternative Transport Manager put forward by the Appellant because he had not completed form TM1 and had not provided any other evidence on the basis of which his competence, suitability and availability could be assessed.

(xvii)            The Deputy Traffic Commissioner concluded that: “in the absence of sustainable evidence that there will be continuous and effective management of the vehicles on a day to day basis, I find that the Applicant Company does not satisfy the requirement as to professional competence under s. 13A(3)(d) of the Act”, in other words the Goods Vehicles (Licensing of Operators) Act 1995, ["the 1995 Act"]”.

(xviii)          In an unpublished Appendix to his decision the Deputy Traffic Commissioner set out his reasons for concluding that the Appellant did not meet the requirement to be of appropriate financial standing.  In general terms he had three concerns.  The first was that the financial evidence put forward covered a limited period, the second was that it was not clearly linked to the Appellant and the third was that it demonstrated an unacceptable mixing of private and company funds.

(xix)             On 30 August 2012 the Appellant filed a Notice of Appeal.  In essence he advanced two grounds of appeal.  The first was that he should not have been questioned at the second Public Inquiry about matters, such as the conviction, which were raised at the first Public Inquiry.  The second was that he must have been rehabilitated, at least to some extent, in the period between the 2010 and 2012 Public Inquiries.

3.           On 2 November 2012 the Appellant wrote to the Tribunal.  He acknowledged receipt of the Appeal bundle and invited the Tribunal to hear and determine the appeal in his absence, explaining that he could not be present because of work commitments and the cost.  In the light of this request we have considered all the material available to us.  Given that the Appellant was neither present nor represented we have not only considered his grounds of appeal but have also reviewed the evidence before the Deputy Traffic Commissioner and the reasons for the decision, which he reached.

4.           This was an application for a standard national goods vehicle operator’s licence.  The starting point for any determination of such an application is s.13 of the 1995 Act.  For the purposes of this appeal it is only necessary to refer to s.13(1) & (5), which provide as follows:-

“13 – (1) On an application for a standard licence a traffic commissioner must consider-

(a) whether the requirements of sections 13A and 13C are satisfied, and

(b) if the commissioner thinks fit , whether the requirement of section 13D is satisfied.

(5) If the traffic commissioner determines that any of the requirements that the commissioner has taken into consideration in accordance with subsection (1) …. are not satisfied, the commissioner must refuse the application”.

Two points need to be stressed in relation to these provisions.  First, the use of the words ‘must consider’, in s.13(1), mean that the Traffic Commissioner has no option or discretion in relation to the requirements of s. 13A and 13C, he is simply obliged to decide whether or not these requirements are satisfied.  By contrast the use of the expression ‘if the commissioner thinks fit’, in s. 13(1)(b) means that it is for the Traffic Commissioner to decide, in each case, whether or not there is any need for the requirement set out in s.13D to the met.  In this respect he does have discretion.  Second, the Traffic Commissioner is obliged to refuse the application if any of the requirements, which he has taken into consideration, are not met.  Again he is given no option or discretion in the matter.

5.           The requirements with which the Deputy Traffic Commissioner was principally concerned are those set out in s.13A (2) & (3) the material parts of which provide that:-

“13A- ….

(2) The first requirement is that the traffic commissioner is satisfied that the applicant-

(a) has an effective and stable establishment in Great Britain …

(b) is of good repute (as determined in accordance with paragraphs 1-5 of Schedule 3),

(c) has appropriate financial standing (as determined in accordance with Article 7 of the 2009 Regulations), and

(d) is professionally competent (as determined in accordance with paragraphs 8 to 13 of Schedule 3).

(3) The second requirement is that the traffic commissioner is satisfied that the applicant has designated a transport manager in accordance with Article 4 of the 2009 Regulation who-

(a) is of good repute (as determined in accordance with paragraphs 1-5 of Schedule 3),

(b) is professionally competent (as determined in accordance with paragraph 13 of Schedule 3), and

(c) …”.

The use of the expression ‘is satisfied’ in each of these sub-sections shows that it is for the applicant to produce evidence from which the Traffic Commissioner can determine that each requirement had been met. 

6.          In relation to good repute the Deputy Traffic Commissioner was required by paragraph 1(2) of Schedule 3 to the 1995 Act to: “have regard to all the material evidence including, in particular, any relevant convictions of the company, any of its officers, servants or agents”.  As a director of the Appellant company Mr Roberts was an officer of the company.  The Deputy Traffic Commissioner took the view that the convictions were not only relevant but for ‘serious offences’, as defined in paragraph 3 of Schedule 3 to the 1995 Act, and that loss of good repute was therefore mandatory because Mr Roberts had been convicted of more than one serious offence.  In the cases of JC Stephenson & TE Turner (Trading as J&T Transport) & Thomas McHugh and the Department of the Environment, Transport and the Regions Appeals 9/2000 & 10/2000 the Tribunal considered the meaning of this expression, with the assistance of submissions from the Department.  Part way through paragraph 8 of its decision the Tribunal said this:-

“The words ‘serious offence’ are to be construed in accordance with para. 3 of Schedule 3.  The words ‘more than one conviction’ mean what they say.  They do not require different incidents or different days of commission or of hearing in court”. 

Having set out examples of how that principle operated in that particular case, the Tribunal went on:-

“We think it immaterial that the convictions were on the same day at the same court.  On any view the second conviction indicates a repetition of wrong-doing which properly affects the issue of general good repute”.

7.           It follows, in our view that the first ground of appeal fails.  In our view the Deputy Traffic Commissioner was required by the terms of the 1995 Act to have regard to these convictions, notwithstanding that they had already been considered in the earlier Public Inquiry.  Having rightly concluded that the convictions were relevant the Deputy Traffic Commissioner, correctly, went on to consider the extent to which Mr Roberts could be considered to be rehabilitated, which is the second matter raised in the grounds of appeal. 

8.           When the Deputy Traffic Commissioner considered the question of rehabilitation he had very much in mind that Mr Roberts had been convicted of offences of dishonesty.  He also had in mind that compliance with the operator’s licencing regime is based on trust because Traffic Commissioners, VOSA and the Police do not have the resources to keep a check on operator’s 24 hours a day over the 365 days in each year.  Instead Traffic Commissioners must be able to trust operator’s to operate in compliance with the regulatory regime and operators’ must be able to trust their competitors to operate fairly and to comply with the regulatory regime.  It follows, in our view that the Deputy Traffic Commissioner was entitled to take into account the fact that these were convictions for dishonesty.

9.           In assessing whether or not Mr Roberts was sufficiently rehabilitated the Deputy Traffic Commissioner had regard to two matters.  The first was the fact that Mr Roberts did not appear to appreciate the difference between his position as an individual and his position as a Director of the Appellant company.  In our view this was a relevant consideration because, as the Deputy Traffic Commissioner explained, it meant that there was a continued risk that Mr Roberts would fail to distinguish between his own personal finances and the finances of the Appellant, with the result that continuing to meet requirement for an operator to be of appropriate financial standing would be put at risk.  The second, was that the Deputy Traffic Commissioner took the view that the Appellant had not done sufficient to remedy his ignorance and lack of experience of the road haulage industry in general and the operator’s licensing system in particular.  Again, in our view, this was a relevant consideration and the conclusions reached by the Deputy Traffic Commissioner cannot be faulted.  It seems to us that Mr Roberts must become much more familiar with the obligations imposed on an operator by the regulatory regime and the steps which must be taken to comply with that regime before he will be able to satisfy a Traffic Commissioner that he is sufficiently rehabilitated to be granted an operators licence, either personally or to a limited company of which he is a director.  It follows that the second ground of appeal fails.

10.        We should, perhaps, have stressed when setting out the requirements of s.13A(2) of the 1995 Act that an applicant for a licence must satisfy the Traffic Commissioner that all four of the requirements set out in that sub-section have been met.  Unless that is done the application must be refused.  The consequence is that where, as here, a Traffic Commissioner has come to the conclusion that more than one of the requirements has not been met an appeal can only succeed if the Appellant can show, in each case where the Traffic Commissioner was not satisfied that a requirement was met, that that decision was plainly wrong.

11.        In the present case the Deputy Traffic Commissioner was not satisfied that the Appellant met the requirements to be of good repute, of appropriate financial standing and to have professional competence.  We have carefully considered the reasons given by the Deputy Traffic Commissioner for reaching each of these conclusions.  We are satisfied, in each case, that the Deputy Traffic Commissioner came to the correct conclusion.  It follows that the Deputy Traffic Commissioner was required to refuse the application and that conclusion was correct.

12.        For all these reasons the appeal must be dismissed, with immediate effect. 

 

 

 

His Hon. Michael Brodrick, Judge of the Upper Tribunal,

Principal Judge for Traffic Commissioner Appeals, President of the Transport Tribunal. 23 November 2012