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You are here: BAILII >> Databases >> Upper Tribunal (Administrative Appeals Chamber) >> NP Clare Transport Ltd vVehicle & Operator Services Agency (VOSA) [2013] UKUT 589 (AAC) (21 November 2013) URL: http://www.bailii.org/uk/cases/UKUT/AAC/2013/589.html Cite as: [2013] UKUT 589 (AAC) |
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TRAFFIC COMMISSIONER APPEALS
ON APPEAL from the DECISION of Fiona Harrington DEPUTY TRAFFIC COMMISSIONER for the Western Traffic Area
Dated 22 July 2013
Before:
H. H. Michael Brodrick, Judge of the Upper Tribunal
Stuart James, Member of the Upper Tribunal
Andrew Guest, Member of the Upper Tribunal
Appellant:
N P CLARE TRANSPORT Ltd
-v-
Respondent:
VEHICLE & OPERATOR SERVICES AGENCY (VOSA)
Attendances:
For the Appellant: Christopher Over of OTB Eveling LLP
For the Respondent: Felicity Hine of Hine & Co, Solicitors
Heard at: Field House, 15-25 Bream’s Buildings, London, EC4A 1DZ
Date of hearing: 8 October 2013
Date of decision: 21 November 2013
DECISION OF THE UPPER TRIBUNAL
IT IS HEREBY ORDERED that this appeal be DISMISSED.
SUBJECT MATTER:- Impounding.
CASES REFERRED TO:- 2005/542 James Thorogood
2005/471 Excel A-Rate Business Services Ltd.
1. This is an appeal from the decision of the Deputy Traffic Commissioner for the Western Traffic Area to refuse to exercise her discretion to permit the Appellant to make a late application for the return of an impounded vehicle.
2. The factual background to this appeal appears from the documents and the Traffic Commissioner’s decision and is as follows:-
(i) The Appellant is the holder of a Standard National Goods Vehicle operator’s licence. The licence was issued by the Eastern Traffic Area on 11 September 2009. It authorised the use of 8 vehicles and 8 trailers. Between 19 June and 18 September 2012 Nigel Peter Clare, (“Mr Clare”), was a director of the Appellant company.
(ii) Thomas Richard Benney, also known as Dick or Richard Benney, (“Richard Benney”) was, at one time, the holder of a standard national operator’s licence in his own name. The licence was revoked in 1997. An operator’s licence in the name of his company T R Benney & Son Ltd, (“Benney Ltd”), was also revoked some time ago
(iii) Thomas Robert Benney, (“Robert Benney”) is the son of Richard Benney. As a sole trader, trading as Robert Benney Transport, he was granted a standard national goods vehicle operator’s licence
(iv) Between 29 July 2011 and 26 April 2012 Richard Benney was the registered keeper of a Scania R580 Topline tractor unit, registration number S80 TRB, (“the vehicle”).
(v) In early 2012 Richard Benney and Mr Clare started to negotiate a sale of the Appellant Company. A price of £6,000 was eventually agreed.
(vi) On 12 April 2012 the operator’s licence held by Robert Benney was revoked. With effect from 31 May 2012 Robert Benney was disqualified from holding or obtaining an operator’s licence for an indefinite period.
(vii) On 19 April 2012 VOSA wrote to G&B Finance Ltd, (“G&B”) and Richard Benney in identical terms. The letters stated that VOSA had gathered sufficient evidence to conclude that Robert Benney t/a Robert Benney Transport were operating in breach of the Goods Vehicles (Licensing of Operators) Act 1995, ["the 1995 Act"]. Formal notification was given that as from 3 May 2012 any vehicle used by Robert Benney t/a Robert Benney Transport, in breach of the 1995 Act, would be impounded.
(viii) On 24 April 2012 Mr David Goodey of G&B wrote to Robert Benney pointing out that it was a condition of the finance agreements which G&B had with him that he held a valid operator’s licence. He was instructed to remove any vehicles the subject of finance agreements from the public highway, forthwith, and to keep them off the road until the matter had been resolved. In evidence before the Deputy Traffic Commissioner, when applying for the return of the vehicle and the Volvo, (see below), Mr Goodey said that he had written to Robert Benney because the relevant finance agreements, at that time, were in the name of Robert Benney Transport.
(ix) Also on 24 April 2012 Mr Clare posted the operator’s licence for the Appellant company to Richard Benney.
(x) On 26 April 2012 the registered keeper of the vehicle was changed and since that date the Appellant has been the registered keeper. On the same date the Appellant was also specified as the registered keeper of a Volvo 4 axle rigid vehicle, registration number X727HKW, (“the Volvo”).
(xi) On 30 April 2012 the vehicle was specified on the Appellant’s operator’s licence.
(xii) On 3 May 2012 G&B wrote to Richard Benney as Guarantor of what the letter described as a Hire Purchase agreement in respect of the Volvo, in fact the copy of the agreement which was enclosed describes itself as a Lease Agreement. The agreement named the Appellant company as the Lessee. The Volvo had previously been subject to a finance agreement between G&B and Robert Benney.
(xiii) On 11 May 2012 the Volvo was specified on the Appellant’s licence.
(xiv) On 23 May 2012 G&B wrote to Richard Benney, at Wheal Mary Farm. The Appellant company’s name is the second line of the address. The letter thanked Richard Benney for using G&B “for your funding arrangement in respect of” the vehicle. A copy of the Hire Purchase agreement was enclosed. The Hire Purchase agreement named G&B as the owners of the vehicle and the Appellant as the hirer. The agreement provided for payment of a first instalment of £649.46, followed by 31 monthly instalments of £499.46 and a final instalment of £524.46. Clause 3 of the agreement provided as follows: “Upon payment of the sums specified in the Schedule as the Total Amount Repayable, all other sums payable under this agreement and the Option to Purchase Fee, ownership of the Goods shall pass to the Hirer. Until such time the Goods shall remain the sole property of the Owners and the Hirer shall be a mere bailee of the Goods”. Richard Benney signed the agreement on behalf of the Appellant. On the same date G&B wrote to him at Wheal Mary Farm enclosing a copy of a Hire Purchase agreement and a copy of the Guarantee and Indemnity, which he had signed on 9 May 2012.
(xv) On 23 May 2012 G&B wrote a second letter to Richard Benney. The address, including the reference to the Appellant company, was exactly the same as that used for the letter referred to above. This letter thanked Mr Benney for using G&B for the ‘funding arrangement in respect of the Volvo’. It enclosed a copy of the Lease Agreement.
(xvi) When giving evidence in support of G&B’s application for the return of the vehicle and the Volvo, (see below), Mr Goodey was asked about the discrepancy in the dates. He explained that documents were sometimes backdated to avoid instalments on a number of agreements becoming payable at the same time. He thought that that was the explanation for the discrepancy in this case.
(xvii) On 18 September 2012 Nigel Clare resigned as a director of the Appellant company, having sold the business to Richard Benney. Between 18 September 2012 and 20 December 2012 Richard Benney was a director of the Appellant company.
(xviii) On 24 September 2012 Mr Clare wrote to the Traffic Commissioner for the Eastern Traffic Area to inform him of the change in the directors of the Appellant company. The letter went on to state that Richard Benney: “is now responsible for the daily running of the operation with immediate effect”. Mr Clare added that the transport manager had resigned with immediate effect.
(xix) On 8 November 2012 VOSA wrote to ‘the Director’ of the Appellant company pointing out that the authorised operating centre of the Appellant was an address at Frampton West, Boston in Lincolnshire. The letter went on to state that VOSA had been advised that vehicles specified on the company’s licence had been parked at Wheal Mary Farm, Leedstown in Cornwall, in breach of s. 7 of the 1995 Act. The letter went on to point out that if this address was to be used to park vehicles authorised under the Appellant company’s licence it would be necessary for the company to apply for an operator’s licence in the Western Traffic Area.
(xx) On 13 December 2012 Nigel Clare wrote to Richard Benney. He expressed concern as to whether steps had been taken to apply for a change in the Appellant’s operating centre and he stressed how important it was for a transport company to have an approved operating centre.
(xxi) On 20 December 2012, following the resignation of Richard Benney, Geoffrey Peck was appointed a Director of the Appellant company. He resigned on 8 February 2013.
(xxii) On 8 February 2013 James Thomas Evans, (Mr Evans”) was appointed a Director of the Appellant company.
(xxiii) On 27 February 2013 the Volvo was impounded. On the same date a Senior Traffic Examiner spoke to Mr David Goodey of G&B Finance Ltd, (“G&B”). Mr Goodey was informed that VOSA had impounded the Volvo because it was not being operated by the Appellant but by Benney Ltd, who no longer held an operator’s licence. Mr Goodey produced details of the operator’s licence held by the Appellant. He was warned that if VOSA conducted enforcement checks on other vehicles apparently operated by Benney Ltd such vehicles would be impounded. Mr Goodey was advised that, if possible, he should secure the return of any vehicles, in which G&B had a financial interest.
(xxiv) Following the conversation with Mr Goodey the Senior Traffic Examiner received a telephone call from Mr Evans, who said that he had been appointed a Director and transport manager of the Appellant company a fortnight before. Mr Evans was unable to name any of the staff, nor could he describe their duties. He said that he had been to the Leedstown ‘operating centre’ for a couple of hours the week before to ensure compliance with the operator’s licensing regime. He said that he was effectively a director in name only because Richard Benney was controlling the business. The situation in relation to the operator’s licence and the impounding was explained to Mr Evans, who said that he would be tendering his resignation. He resigned on 28 May 2013.
(xxv) On 9 March 2013 the vehicle was detained and impounded at the Heavy Goods Vehicle Testing Station, Budshead Road, Plymouth in Devon. The vehicle was towing a three axle semi-trailer and it was displaying an ‘O’ Licence in the name of the Appellant.
(xxvi) The driver of the vehicle was Darren Scoble. He said that he was employed by the Appellant company but took his instructions from Richard and Robert Benney. He was asked why delivery paperwork and a fuel card, seized from the vehicle, were in the name of Benney Ltd. He was unable to give an answer.
(xxvii) Inquiries were then made of the two companies who owned the load being carried by the vehicle. Both confirmed that they had instructed Benney Ltd to deliver their loads on their behalf and that they always dealt with Richard or Robert Benney.
(xxviii) Inquiries were made with two companies who maintain commercial vehicles. As a result a number of invoices were produced for maintenance and MOT work on the vehicle. The customer, in each case, was Benney Ltd of Wheal Mary Farm, Leedstown and the invoices were addressed to Benney Ltd at the same address.
(xxix) Further inquiries showed that the vehicle was subject to the Hire Purchase agreement with G&B, dated 23 May 2012.
(xxx) An attempt was made to contact the Appellant after the vehicle had been stopped. Calls to the Appellant’s number were diverted to a mobile phone belonging to Richard Benney.
(xxxi) On 11 March 2013 the Appellant company, G&B and Benney Ltd, amongst others, were informed that the vehicle had been impounded and that any person having a claim to the vehicle was required to establish their claim, in writing, by sending it to the Office of the Traffic Commissioner, (“OTC”), on or before 3 April 2013. Reference was made to a number of Regulations set out in the Goods Vehicles (Enforcement Powers) Regulations 2001, (“the 2001 Regulations"). The penultimate paragraph of the letter reiterated, in bold type that the application had to be received by the Traffic Commissioner, at the address given, no later than 3 April 2013 and went on: “Late applications will not be accepted”. On13 March 2013 the appropriate Notice appeared in the London Gazette.
(xxxii) On 12 March G&B applied to the Traffic Commissioner for the return of the vehicle on the grounds that it owned the vehicle and that (i) the user of the vehicle held a valid operator’s licence and (ii) that G&B did not know that it was being or had been used in contravention of s. 2 of the 1995 Act. G&B did not request a hearing of the application.
(xxxiii) On 18 April 2013 the OTC, wrote to G&B. They were informed that having considered the evidence that they had submitted and the evidence submitted by VOSA the Traffic Commissioner had decided to hold a hearing, which would take place on 30 April 2013.
(xxxiv) On 30 April 2013 the Deputy Traffic Commissioner heard applications by G&B for the return of the Volvo and the vehicle. Her written decision, in relation to both vehicles is dated 13 May 2013. In relation to the Volvo she was satisfied that G&B had proved ownership of the vehicle and that it did not know that the vehicle was being or had been used in contravention of s. 2 of the 1995 Act. The application for the return of the Volvo was granted. In relation to the vehicle she was not satisfied that G&B had proved ownership nor was she satisfied that it had made out either of the grounds on which its return was claimed. The application for the return of the vehicle was therefore refused.
(xxxv) In relation to the vehicle the Deputy Traffic Commissioner found that from 29 April 2011 to 26 April 2012 the registered keeper was Richard Benney but that from 26 April 2012 the registered keeper was the Appellant company and that the Appellant company had specified the vehicle on its operator’s licence on 30 April 2012. She pointed out that the only evidence of ownership advanced by G&B, in respect of both vehicles, were the Lease and Hire Purchase agreements respectively. She concluded that in the case of a hire agreement this was sufficient proof of ownership, within the definition set out in Regulation 2 of the 2001 Regulations. But she went on the point out that the position in relation to hire purchase agreements is different because they are not included in the definition of ‘hiring agreement’. She concluded that in the absence of any other evidence to show how G&B acquired ownership of the vehicle the Hire Purchase agreement, on its own, was not enough to discharge the burden of proof falling on G&B, as applicants. The Deputy Traffic Commissioner went on to consider whether it would be fair and reasonable to allow G&B time to produce further evidence of ownership but she concluded that this was not appropriate, given the findings which she made in relation to the grounds on which return of the vehicle was claimed.
(xxxvi) The first ground on which return of both vehicles was claimed was that “the user of the vehicle held a valid operator’s licence”. In each case G&B relied on the Appellant’s operator’s licence in order to make out this ground. The Deputy Traffic Commissioner found, on the evidence, which she accepted, that the user of each vehicle, at the material time was not the Appellant but Benney Ltd or Richard or Thomas Benney.
(xxxvii) The second ground on which the return of both vehicles was claimed was that G&B did not know that the vehicle was being or had been used in contravention of s. 2 of the 1995 Act. After a thorough and careful analysis of the evidence the Deputy Traffic Commissioner concluded that G&B had failed to prove lack of knowledge in the case of the vehicle. In view of the different evidence in relation to the Volvo she concluded that G&B had satisfied her that they did not know that the Volvo was being or had been used in contravention of s. 2 of the 1995 Act.
(xxxviii) On 9 July 2013 Geoffrey Peck was re-appointed a director of the Appellant company.
(xxxix) On 17 July 2013 Solicitors acting for the Appellant company applied to the Traffic Commissioner for an extension of time in which to make an application for the return of the vehicle and for a direction that the sale of the vehicle be postponed until the application and any appeal which might arise out of it had been determined. In support of the application it was said that the terms of the Deputy Traffic Commissioner’s decision only came to the attention of the Appellant two days before the date of the letter. It was submitted that: “the primary finding which overrode any other consideration was that the vehicle was not owned by the applicant”. The letter pointed out that the vehicle was due to be auctioned the following day. It went on: “our clients were not aware that the Commissioner had made a finding that the finance company were not the owners of the vehicle. In those circumstances the default position must be that our clients are the owners of it”. The letter went on to assert that the Appellant would be in a position to provide substantial evidence that it was the user of the vehicle at the material time and that the Appellant had substantial equity in the vehicle having paid the finance company some £18,000.
(xl) On 22 July 2013 the Deputy Traffic Commissioner gave a written decision, having considered the application for an extension of time in which to make an application for the return of the vehicle on paper. The Deputy Traffic Commissioner rejected the submission that the default position was that if G&B were not the owner of the vehicle then the Appellant must be the owner. She went on to point out that she had specifically contemplated the possibility that given more time G&B would have been able to prove ownership but had decided not to give more time because of the findings she made about the grounds for return.
(xli) The Deputy Traffic Commissioner went on to consider a number of decisions in which the Tribunal considered whether the time limits for applying for the return of a vehicle were mandatory or directory. She concluded that they were directory and that she had discretion to allow a late application in appropriate circumstances. She then considered the decision of the Transport Tribunal in 2005/471 Excel A-Rate Business Services Ltd. At paragraph 12 the Tribunal posed the question: when will it be appropriate to give permission for a late application? The Tribunal went on to say this:
“Two obvious factors, (though we do not seek to set out a definitive list), are (a) the explanation for the delay and (b) the merits of the application. A convincing explanation for the delay could justify receipt of a late application even if the merits did not appear to be strong. Where the merits do appear to be strong that factor alone may justify receiving a late application. The general rule should be to endeavour to decide these applications on their merits and not on pure technicalities”.
(xlii) The Deputy Traffic Commissioner accepted that on 9 July 2013 Richard Benney, (by then a former director of the Appellant company), had asked the OTC to provide him with a copy of the Deputy Traffic Commissioner’s decision. However she went on to say that she did not find this to be a convincing explanation for the delay given, (i) the fact that the impounding had been advertised in the London Gazette, (ii) that the Appellant company had been made aware of the impounding by a letter from VOSA dated 13 March 2013 and (iii) that a similar letter had been sent to Benney Ltd. In other words the Appellant had been notified of the impounding and of the procedure for applying for return of the vehicle in sufficient time for it to make their application within the time limit provided in notification dated 11 March 2013. As a result the Deputy Traffic Commissioner concluded that: “there is I find an absence of any objective justification for the delay in its application to 17 July 2013”.
(xliii) The Deputy Traffic Commissioner went on to consider the merits of the application in the light of the evidence given and the findings made when she determined the application by G&B. She concluded that the merits of an application by the Appellants would not be strong. She rejected the suggestion that the Appellant company became owner ‘by default’ as a result of the findings she made in determining the G&B application. She pointed out that she had seen a copy of the hire purchase agreement and that she had considered its terms. In particular she relied on the provision that ownership would not pass to the Appellant unless and until the full balance had been paid and the option to purchase had been exercised. She pointed out that as at the date on which the vehicle was detained only 10 out of 32 instalments had been paid, with the result that legal ownership would not have passed to the Appellants under the agreement.
(xliv) The Deputy Traffic Commissioner then considered the right to detain under Regulation 3 of the 2001 Regulations and the obligation to return a detained vehicle, under Regulation 4, if VOSA no longer have reason to believe that the vehicle was being or had been used in contravention of s. 2 of the 1995 Act. She pointed out that it would have been open to the Appellants to provide evidence to VOSA, which, if accepted, could have secured the release of the vehicle without the need for an application. On the basis that the Appellant had made no attempt to secure the release of the vehicle by this route the Deputy Traffic Commissioner concluded that she could attach little weight to the assertion that there was substantial evidence that the Appellant company was the user of the vehicle at the material time.
(xlv) For those reasons the Deputy Traffic Commissioner concluded that the merits of the proposed application were not strong and that it was not appropriate to exercise her discretion to permit the application to be made so late.
(xlvi) On 30 July 2013 the Appellant appealed against this decision. The six grounds of appeal essentially raise two points. First that the application should have been considered at an oral hearing at which the Appellant would have been able to call evidence and challenge matters put before the Deputy Traffic Commissioner during the earlier hearing. Second that the Deputy Traffic Commissioner was wrong to reject the submission that the Appellant became owner by default.
3. At the hearing of the appeal the Appellant was represented by Mr Over and the Respondents were represented by Mrs Hine. We are grateful for the helpful skeleton arguments, which they each provided in advance of the hearing.
4. The main submissions advanced by Mr Over were first, that the Deputy Traffic Commissioner was wrong to refuse the application on a summary basis because she was obliged to convene a hearing. Second, that the Deputy Traffic Commissioner should not have rejected the explanation for the delay in making the application. Third, that if B&G were not the owners of the vehicle then the Appellant company, as the registered keeper must be considered to be the owner, given that it had ‘equity’ said to be about £18,000 in the vehicle.
5. The main submissions advanced by Mrs Hine were that first, the explanation for the delay did not stand up to careful examination. Second, the Appellant’s arguments on ownership were founded on a false premise. Third, the Appellant had failed to show that it had any reasonable prospect of success on the merits.
6. In considering whether the Deputy Traffic Commissioner was ‘obliged’ to hold an oral hearing of this application it is important to bear in mind the background. On 11 March 2013 the Appellant company, and Benney Ltd, amongst others, were informed that the vehicle had been impounded and that any person having a claim to the vehicle was required to establish their claim, in writing, on or before 3 April 2013, by sending it to the office of the Traffic Commissioner. The fact that Benney Ltd were specifically informed is important because Mr Evans said that Richard Benney was controlling the Appellant’s business.
7. If the Appellant had made an application for the return of the vehicle on or before 3 April 2013 it would have been entitled, as of right, to have the application considered at an oral hearing. The Appellant company chose not to make their application within the prescribed time. It is said that they were acting on legal advice that B&G should be allowed to make their claim first. Whatever the reason for not applying by 3 April 2013 the Appellant now needs to apply for permission to make a late application. Such an application is a preliminary hurdle which the Appellant must clear before a full hearing of the merits of the application can take place. Applications for permission to appeal out of time or to make an application out of time are routinely considered on paper and without a hearing. One reason is that the explanation for the delay will be an important consideration when considering whether or not to give permission. On the other hand it will be an irrelevant consideration when determining the merits of the full application. Another reason is that an oral hearing of an application for permission to make a late application is quite likely to degenerate into a premature hearing of the full merits of the application itself. One only has to consider the detailed submissions made on behalf of the Appellant to see how easily an application for permission to apply out of time could morph into an application for the return of the vehicle in question. A third reason is the need to act speedily when dealing with applications relating to impounded vehicles.
8. In support of the submission that the Deputy Traffic Commissioner was obliged to hold an oral hearing Mr Over relied on a passage in paragraph 63 of the Senior Traffic Commissioner’s Statutory Document No. 7 and the decision of the Tribunal in the appeal of James Thorogood 2005/542. In our view neither the Statutory Document nor the Tribunal decision in Thorogood assist Mr Over. The reason is that both refer to the need to consider whether or not to hold a hearing of an application for the return of an impounded vehicle. In other words a hearing governed by Regulation 11 of the 2001 Regulations. Neither seeks to set out the procedure to be followed on an application for permission to make a late application for the return of an impounded vehicle.
9. In our judgment the Deputy Traffic Commissioner was entitled to deal with this application on paper and without any oral hearing. Accordingly the first ground of appeal fails.
10. In our view the Deputy Traffic Commissioner correctly directed herself in relation to the fact that she had discretion to permit a late application for the return of the vehicle. In addition she correctly directed herself as to the considerations, which she ought to take into account. In particular she focussed her attention on the adequacy of the explanation for the delay and on the prospects of success if there were to be a full hearing.
11. The Appellant must have been aware, from shortly after 11 March 2013, that an application for the return of the vehicle had to be made on or before 3 April 2013. It must also have been aware that the instalments under the Hire Purchase agreement involved an outlay of £499.46 per month and that while the vehicle was impounded it was unable to earn any money with which to pay these instalments. In other words it is not unreasonable to conclude that the Appellant company would have been anxious to secure the return of the vehicle at the earliest opportunity. It is against this background that we have been told that the Appellant sought advice from a firm of Solicitors, (not those currently representing the company), who, we are told, advised that they should wait until B&G had made their application for the return of the vehicle before deciding whether to mount their own application. We must proceed on the assumption that this advice was given but we are entitled to consider whether it provides an adequate explanation for the delay. The Deputy Traffic Commissioner’s written decision is dated 13 May 2013. The Appellant, and Richard Benney, who was said by Mr Evans to be controlling the Appellant, had dealings with B&G and knew where they could be found. In those circumstances it is difficult to see how and why the Appellant, which urgently needed the return of the vehicle, could remain unaware of the fact that B&G’s claim had failed for nearly two months after the date of the decision. Failing to make inquiries or not bothering to find out the result of B&G’s application is, in our view, inconsistent with the explanation that the Appellant had been advised to await the outcome of B&G’s application.
12. The explanation for the delay which was advanced to the Deputy Traffic Commissioner was that the Appellant was not aware until mid July, when the OTC provided a copy of the Deputy Traffic Commissioner’s decision, of her findings in relation to ownership of the vehicle. Given the background to which we have already referred the Deputy Traffic Commissioner did not find this to be a convincing explanation. We agree. Whichever way one approaches this point we are satisfied that the Appellant could and should have acted more quickly to make a claim for the return of the vehicle.
13. In our view it is clear from the opening words of Regulation 10 that it is only the owner of an impounded vehicle who can apply for its return. Unless and until ownership of an impounded vehicle has been proved a Traffic Commissioner has no jurisdiction to entertain an application for the return of the vehicle. That is why, correctly in our view, Traffic Commissioners will often consider any disputed question of ownership at the start of an impounding hearing. In our view it will usually be in the interests of justice for competing claims to ownership of the same vehicle to be considered in the course of a single hearing.
14. The first submission made by Mr Over in relation to ownership was that the Deputy Traffic Commissioner’s decision left a lacuna as to the ownership of the vehicle with the result that somebody had to own it and that, by default, it should be the Appellant as the registered keeper of the vehicle. In our judgment that submission is seriously flawed. It must be founded on the proposition that the Deputy Traffic Commissioner made a positive finding that B&G were not the owners of the vehicle. One only has to read what the Deputy Traffic Commissioner said to see that she did not make such a finding. What she said was that by contrast with the Hire Agreement on the Volvo a Hire Purchase agreement, on its own, was not sufficient to prove ownership of the vehicle. In other words far from finding that B&G were not the owners of the vehicle she merely concluded that they had not proved that they were. But it does not end there because the Deputy Traffic Commissioner went on to consider whether she ought to allow B&G more time to provide additional evidence of ownership. She clearly contemplated that it was likely that, given time, they would succeed but she decided that an adjournment was not sensible, given her conclusions on other issues, which were fatal to B&G’s application. She rejected the suggestion of ownership by default. In our view she was right to do so. While there may be circumstances in which The Crown becomes the owner of property, by default, there is no general principle of ownership by default, which could assist the Appellant in this case. In addition it is quite clear that the fact that someone is the registered keeper of a vehicle is not, on its own, evidence that they own the vehicle. Almost the first words to appear on a vehicle registration document are: “This document is not proof of ownership”.
15. Next it is important to bear in mind that, at the material time, the vehicle was subject to a Hire Purchase Agreement. It has not been suggested that this was not a genuine agreement. While there may be a question mark over the exact date on which it was signed it seems to us that the correct course, on the available evidence, is to proceed on the basis that it is a genuine agreement. We have set out the full terms of clause 3 at paragraph 2(xiv) above. That clause ends by saying that until the option to purchase has been exercised: “the Goods shall remain the sole property of the Owners and the Hirer shall be a mere bailee of the Goods”. In our view this makes the position crystal clear. It means that as a bailee the Appellant was in lawful possession of the vehicle but that it remained the sole property of B&G until the option to purchase had been exercised. Since the option to purchase was not exercised by the date of the impounding the agreement makes it perfectly clear that any claim by the Appellant to be the owner of the vehicle was bound to fail. The fact that, on the evidence put before the Deputy Traffic Commissioner, B&G failed to satisfy her that it was the owner of the vehicle in no way alters or invalidates that conclusion.
16. It was submitted that even if the Appellant was not the legal owner of the vehicle it had a substantial equitable interest, which gave it the right to apply for the return of the vehicle. While we can understand the superficial attraction of this submission it simply does not stand up to more careful examination. One of the central features of a Hire Purchase agreement is that the hirer is under no obligation to buy the goods in question. Unless and until the option to purchase is exercised the goods are on hire and the instalments are payments for the hire of the goods. Payment of the instalments entitles the hirer to remain in lawful possession of the goods but it does not entitle the hirer to build up any equitable interest in the goods. Mr Over submitted that the nearer one came to the end of a Hire Purchase Agreement the less interest the Hire Purchase company would have in pursuing a claim for the return of an impounded vehicle. We do not agree. It seems to us that under Clause 9(g) of the agreement B&G were entitled, once they became aware that their right to ownership might be prejudiced by the vehicle being used in contravention of s.2 of the 1995 Act, to terminate the agreement and to repossess the goods. They would then have been entitled to recover any sums due under the agreement at the time of termination. In other words in that situation the Appellant would have lost the right to lawful possession of the vehicle and would be unable to recover any sums paid for the hire of the vehicle. In that situation it is very clearly in the interest of the Hire Purchase company to pursue a claim for the return of the vehicle, which it would then be entitled to keep.
17. In our view a claim to the return of the vehicle based on the Appellant having an equitable interest in the vehicle is bound to fail on the facts of the present case. Indeed our provisional view, (bearing in mind that the matter was not fully argued), is that it is only the legal owner of a vehicle as opposed to a person with an equitable interest who can make a claim for the return of the vehicle under Regulation 10 of the 2001 Regulations.
18. For these reasons we agree with the Deputy Traffic Commissioner’s conclusion that there was no reasonable prospect of the Appellant proving that it was the owner of the vehicle.
19. In the light of this conclusion we can deal quite shortly with two other related points. The first is the question of who was ‘using’ the vehicle at the material time. The second is the question of ‘fronting’, in other words the allegation made by VOSA that the reality was that the vehicle was operated by Richard and/or Robert Benney and/or Benney Ltd, who were doing so behind the ‘front’ of respectability and legality provided by the operator’s licence held by the Appellant.
20. The letter dated 17 July 2013, from the Appellant’s current Solicitors asserts that: “we understand that our client is in a position to provide substantial evidence” on this issue which was not before the Deputy Traffic Commissioner. We were not told the substance of this evidence and we bear in mind that it would have to be assessed against the evidence pointing in the other direction. There is documentary evidence that maintenance of the vehicle was carried out in the name of Benney Ltd. The fuel card found in the vehicle was in the name of Benney Ltd. The goods on the vehicle at the time of the impounding were being carried on behalf of customers who arranged for them to be transported through Benney Ltd., the driver of the vehicle at the time that it was impounded said that he was employed by the Appellant but took his orders from Richard or Robert Benney. When one considers all these factors against the chronology in this case and, in particular (a) the revocation of Robert Benney’s licence on 19 April 2012 and (b) the posting of the Appellant’s operator’s licence to Richard Benney on 24 April 2012 there is clearly evidence capable of indicating that it was the Benneys or their company who were using the vehicle. Another consideration is that s. 58(2) of the 1995 Act, provides that: “… the person whose servant or agent the driver is, shall be deemed to be the person using the vehicle: and references to using the vehicle shall be construed accordingly”. The fact that the driver of the vehicle took his orders from Richard or Robert Benney could suggest that the driver was their servant or agent, with the result that they are deemed to be the person using the vehicle. Given our conclusions on the issue of ownership, bearing in mind the possibility that disciplinary action might still be taken against the Appellant and bearing in mind that we do not know the nature of the ‘substantial evidence’ it seems to us that the only fair course is to refrain from expressing conclusions on this issue.
21. Mr Over rightly pointed out that an allegation of ‘fronting’ is a serious matter. He also pointed out that, as yet, no disciplinary action has been taken against the Appellant. Bearing in mind what we have said at the end of the previous paragraph we would simply say, at this stage, that having considered the chronology we can understand how an allegation of fronting came to be made in this case. If it arises in the course of disciplinary proceedings it is important that the Traffic Commissioner conducting those proceedings feels free to assess the evidence with an open mind and without any pre-judgment on our part.
22. For these reasons we are satisfied that the approach taken by the Deputy Traffic Commissioner was the correct one, that the conclusions, which she reached were justified and that her decision to refuse permission to make a late claim for the return of the vehicle was right.
23. The appeal is therefore dismissed.
His Hon. Michael Brodrick, Judge of the Upper Tribunal,
Principal Judge for Traffic Commissioner Appeals, President of the Transport Tribunal.
21 November 2013
