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You are here: BAILII >> Databases >> Upper Tribunal (Administrative Appeals Chamber) >> DAVID KEITH BRADLEY & Anor (Transport : Traffic Commissioner cases) [2014] UKUT 253 (AAC) (03 June 2014) URL: http://www.bailii.org/uk/cases/UKUT/AAC/2014/253.html Cite as: [2014] UKUT 253 (AAC) |
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T/2014/12
ON APPEAL from the DECISION of Anthony Seculer DEPUTY TRAFFIC COMMISSIONER for the West Midland Traffic Area
Dated 23 December 2013
Before:
His Hon. Michael Brodrick, Judge of the Upper Tribunal
Stuart James, Member of the Upper Tribunal
David Rawsthorn, Member of the Upper Tribunal
Appellants:
DAVID KEITH BRADLEY & JULIE BRADLEY
Attendances:
For the Appellants: Simon Newman of NA Commercial Solicitors
Heard at: Field House, 15-25 Bream’s Buildings, London, EC4A 1DZ
Date of hearing: 8 April 2014
Date of decision: 3 June 2014
DECISION OF THE UPPER TRIBUNAL
IT IS HEREBY ORDERED that this appeal be DISMISSED.
SUBJECT MATTER:- Disqualification, Transport Manager
CASES REFERRED TO:- Re Hydrodam (Corby) Ltd [1994] 2 BCLC 180
Appeal 2004/202 David Holloway
Re Kaytech International plc [1999] 2 BCLC 351
Secretary of State for Trade and Industry v Dennis George Hollier & Others [2006] EWHC 1804 (Ch).
Holland v Commissioners for HMRC & another [2010] UKSC 51.
T/2010/29 David Finch t/a David Finch Haulage
T/2012/56 & 57 Deep Transport Ltd & Midland Transport Ltd
1. This is an appeal from the decision of the Deputy Traffic Commissioner for the West Midland Traffic Area to disqualify David Keith Bradley, (“Mr Bradley”) from obtaining or holding an operator’s licence for 5 years, with effect from 27 February 2014, and to disqualify Julie Bradley, (“Mrs Bradley”), from holding or obtaining an operator’s licence for one year from the same date. These orders were made following the revocation of the operator’s licence held by Groupage Shipping (Sandwell) Ltd. The revocation of the licence is not subject to appeal. In addition the Deputy Traffic Commissioner determined that Mr Bradley was unfit to manage the Transport activities of any undertaking for an indefinite period and cannot apply to have that disqualification removed until he has passed the Certificate of Professional Competency Examination. This determination has not been appealed.
2. The factual background to this appeal appears from the documents and the Deputy Traffic Commissioner’s decision and is as follows:-
(i) Sandwell Express Haulage Ltd, (“Express”) held an operator’s licence that was revoked on 1 January 2013. Mr Bradley was the sole director and Transport Manager of the company, which was put into creditors’ voluntary liquidation on 29 October 2009. The fact that Express had gone into liquidation was not disclosed to the Traffic Commissioner.
(ii) On 17 September 2009 Groupage Shipping (Sandwell) Ltd, (“Groupage”) applied for a standard national goods vehicle operator’s licence. The application disclosed the connection with the operator’s licence held by Express and indicated that this licence would be surrendered if the application by Groupage was granted. Mr Bradley was named as the transport manager. In due course he submitted a completed transport manager questionnaire dated 13 February 2012.
(iii) The application made by Groupage stated that the directors were Mr and Mrs Bradley. However the records held at Companies House give a different picture. They show that Mr Bradley was appointed a director of Groupage on 20 March 2008 and that he resigned on 31 May 2012. In relation to Mrs Bradley they show that she was appointed a director on 31 May 2012 and remains in post. She was appointed company secretary on 20 March 2008 and remains in post.
(iv) On 22 February 2010 Groupage was granted a standard national heavy goods vehicle operator’s licence with an authorisation of five vehicles. The operating centre and correspondence address was given as Unit 4 Britannia Park, Trident Drive, Wednesbury, WS10 7XB. An undertaking was given when the licence was granted that the outstanding Director’s loan account in respect of Express, together with Ł20,000 owed for assets and goodwill would be settled in full by no later than 30 November 2010.
(v) On 5 April 2012 Robert Kirk submitted a completed transport manager questionnaire. He never became the nominated CPC holder for Groupage.
(vi) On 10 May 2012 the Secretary of State for Business Innovation and Skills accepted a disqualification undertaking given by Mr Bradley. The terms of the undertaking were that for a period of 3 years and 6 months Mr Bradley would not: “(a) be a director of a company, act as receiver of a company’s property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless (in each case) he had the leave of the court, nor (b) act as an insolvency practitioner”. Mr Bradley went on to acknowledge that if he acted in contravention of the undertaking he might be prosecuted for a criminal offence and may be personally responsible for all the relevant debts of any relevant company. A schedule to the undertaking set out the matters leading to the conclusion that Mr Bradley was unfit to act as the director of a company.
(vii) With effect from 31 May 2012 Mr Bradley was disqualified from being a director of a limited company or directly or indirectly taking part in the management of a company for a period of 3 years and 6 months. His name was removed from the list of directors of Groupage maintained at Companies House. However he continued to be shown as a director of Groupage on the records held by the Central Licensing Unit, (“CLU”) until his name was removed by Groupage on 10 November 2013.
(viii) On 18 April 2013 VOSA commenced an investigation to ensure that Groupage was complying with drivers’ hours regulations. As a result numerous offences were disclosed.
(ix) On 18 April 2013 Tracy Love, a Traffic Examiner and Andrew Male, a Vehicle Examiner, met Mr Bradley by appointment. Both said that Mr Bradley explained that he was the CPC holder for and a director of Groupage. Both made a contemporaneous note of this information in their pocket books. They said that Mr Bradley went on to tell them that until the previous month Robert Kirk had been carrying out the role of transport manager for Groupage on his behalf but that he, Mr Bradley, had remained the nominated CPC holder and had retained “ultimate control”. Later in the conversation Mr Bradley said that Mr Kirk had left ‘abruptly’ during March 2013. He said that he had checked Mr Kirk from time to time and was satisfied the job was being done properly. It became clear that some information was not available and that other information was not correct. Mr Bradley accepted that since Mr Kirk left no analysis of analogue tachograph charts had taken place.
(x) On 18 April 2013 VE Male examined two of the authorised vehicles. He issued a delayed prohibition in respect of a leaking brake pipe on one vehicle. The other was free from defects. It appeared to the Vehicle Examiner that Mr Bradley was doing the absolute minimum required for maintenance and repair. As a result he decided to take the vehicle records for further scrutiny. When he examined them he became concerned about the lack of information recorded on the record sheets. VE Male went on to say: “During my dealings with Mr Bradley he was clearly assuming responsibility for the running of the operation and presented himself as empowered to execute company business”. In view of the fact that there is no appeal against the revocation of the licence it is unnecessary to give a more detailed account of VE Male’s concerns.
(xi) On 14 May 2013 Mr Kirk was interviewed by Tracy Love. He said that he had been taken on in January 2012 as a transport manager, believing that he would become the nominated CPC holder. He went on to explain that within 2 months of his appointment Mr Bradley had relieved him of his duties in relation to the maintenance of the vehicles. As a result he said that he refused to allow his name to be put on the licence because he did not have full control. He said that because Mr Bradley would not pay for external analysis of analogue tachograph charts he did the best he could to check them, though he had no authority to issue warnings to drivers, because this was the responsibility of Mr Bradley. He was asked about drivers driving without a card being inserted. He said that as Mr Bradley frequently did this he didn’t bother about it.
(xii) On 29 May 2013 Mr and Mrs Bradley attended a formal interview concerning the analysis of the tachograph records and administrative systems, which Tracy Love had carried out. Mr Bradley began by explaining that following the liquidation of Express there was some financial irregularity as a result of which his Solicitor recommended that he should resign as a director of Groupage and that, as a result, Mrs Bradley was the sole director. At that date VOSA’s records showed that both were directors of Groupage. Mrs Bradley was then interviewed in the absence of her husband. It became clear that while Mr Bradley had told her about most of the issues which had been brought to his attention her responsibility was for financial issues and had nothing whatsoever to do with transport.
(xiii) On 29 May 2013 Mrs Bradley was interviewed under caution. She accepted that she was a director of Groupage. She said that she went into the company when she was needed: “maybe two or three times per week”. She said that Mr Bradley was employed by the company and that his role was that of transport manager. She added that his duties were to deal with the day to day running of the company and forward planning. During the interview she admitted to a lack of knowledge with regard to the operation of HGV’s by Groupage. She repeated that she dealt with financial matters and that she left the day to day running of the company to her husband.
(xiv) On 29 May 2013 Mr Bradley was interviewed under caution. According to TE Love Mr Bradley was shown on the VOSA records for Groupage as the sole director of the company. However when interviewed Mr Bradley explained that he was no longer a director and that the sole director was his wife, Mrs Bradley. Mr Bradley gave a vague explanation, referring to poor legal advice. Further inquiries by TE Love revealed the undertaking given by Mr Bradley in May 2012.
(xv) The summary and conclusion of Tracy Love’s report contains a devastating critique of Mr Bradley’s shortcomings as transport manager.
(xvi) On 22 October 2013 Groupage was called to a Public Inquiry, which was to take place on 27 November 2013. The letter was addressed to “The Directors” of Groupage, in the plural. It set out the grounds on which the Traffic Commissioner was considering taking action against Groupage and the evidence in support of those grounds. Given that there is no appeal against the revocation of the licence we do not propose to consider those matters in any detail. The letter warned that if the Traffic Commissioner decided to revoke the licence he would also consider whether to disqualify the company and/or each individual director of the company from obtaining or holding an operator’s licence. It continued: “The Act allows the Traffic Commissioner, where the holder of the licence is a company to disqualify any director of that company”.
(xvii) Later in the call-up letter, under the heading: “The Evidence the Traffic Commissioner will consider”, reference was made to the witness statement from Tracy Love. The letter continues:
“The Traffic Commissioner notes that David Keith Bradley was disqualified from being a director of a company directly or indirectly on 31 May 2012 for a period of 3 years and 6 months. The Traffic Commissioner will wish to discuss the matter further at the Inquiry and why the company failed to notify him of this matter. It is noted that Mr Bradley was removed as a director with effect from 31 May 2012 according to the Companies House website but is still listed as director on the operator’s licence. It appears that Mr Bradley may still be assuming responsibility for the running operations of this company in direct contravention of the order of disqualification”.
(xviii) On 22 October 2013 Mr Bradley was called to the Public Inquiry in his capacity as transport manager. This letter was directed specifically to his responsibilities as transport manager and to the consequences which would follow a finding that he had lost his good repute and/or his professional competence as transport manager. In particular it referred to the fact that disqualification from acting as a transport manager was mandatory if either of those findings was made. The letter contained a passage in broadly the same terms as that quoted in paragraph 2(vi) above.
(xix) On 29 October 2013 Robert Kirk, who had for a time acted as transport manager for Groupage was called to the same Public Inquiry. Since he is not a party to this appeal it is unnecessary to consider the terms of the letter sent to him.
(xx) The Public Inquiry took place before the Deputy Traffic Commissioner on 27 November 2013. Mr and Mrs Bradley and Mr Kirk were present. Groupage together with Mr and Mrs Bradley were represented by Mr Simon Newman. TE Love and VE Male were also present, together with a number of Groupage drivers.
(xxi) At an early stage the Deputy Traffic Commissioner sought to clarify the position in relation to disqualification and Mr Bradley’s role in Groupage. Mr Newman indicated that it was accepted that the disqualification was still in place. He added that it was Mr Bradley’s case that in his dealings with VOSA, the Office of the Traffic Commissioner, (“OTC”), and the running of Groupage he was not acting in breach of the disqualification.
(xxii) TE Love gave evidence. The effect of her evidence has been summarised above. She was asked what led to the indication from Mr Bradley that he was a director of Groupage. She said this: “He definitely did say ‘CPC Holder’, and in both of our pocket books we’ve written the word ‘Director’, so at some point either we’ve asked, ‘Are you a Director’, and he’s said ‘Yes’, or he has said ‘Director’, but I can’t honestly say which way around that was”. In cross examination she said that she became aware that Mr Bradley was not a director of Groupage first, because of a conversation with Mr Kirk, after which she made further inquiries and second, when she interviewed Mr and Mrs Bradley. She accepted that until the investigation in 2013 there was no history of prohibitions following earlier encounters.
(xxiii) VE Male also gave evidence. He said that he did not specifically recall asking Mr Bradley directly if he was a director of Groupage but he was aware that this was what the print-out giving details of the licence said and nothing in the conversation appeared to contradict this. He went on to detail the deficiencies in the maintenance systems, though he accepted that up until 2013 Groupage vehicles had not attracted any prohibitions.
(xxiv) The next witness was Robert Kirk. He said that he had been given the title of Transport Manager and that his expectation, initially, was that he would become the designated transport manager. In due course he decided that he was not prepared to become the designated transport manager. He said that he reached this decision when Mr Bradley decided to take control of servicing and compliance in relation to the authorised vehicles and to terminate the maintenance contract, which he had arranged, so that Robert Smith, his step-son, could maintain vehicles on site. He said that he had pointed out to Mr Bradley that he should inform the Traffic Commissioner of the change in maintenance provider. He expressed the view that the change was due to cost not to any deficiency in the level of service provided by the previous provider.
(xxv) Mr Kirk described a meeting with Mr Bradley in 2012 in which he confronted Mr Bradley about being disqualified from being a director. He was quite clear that Mr Bradley at first denied that he was disqualified and said that he was still “down” as a director. He added that by the end of the meeting, when it was clear that he had evidence of the disqualification Mr Bradley admitted that he was disqualified.
(xxvi) Mrs Bradley then gave evidence in her capacity as the sole director of Groupage. She accepted that when Mr Bradley resigned as a director the OTC was not notified. She said that it was an oversight on her part. She went on to explain that she obviously had to communicate with Mr Bradley, who was a 50% shareholder in Groupage. She said: “obviously we are going to talk together about things, but I have the final say”. She added that together with Mr Bradley she had been on a full day Freight Transport Association course about a week before in order to learn more about tachographs, drivers’ hours and driving directives.
(xxvii) When questioned by the Deputy Traffic Commissioner Mrs Bradley said that she could not answer the question as to who got the business in. She said that if asked in 2011 who was running the business she would have said that it was Mr Bradley. She added that in the first part of 2012 the answer would have been that she ran it with Mr Bradley. Thereafter she said that she had taken on the role “a lot more since his disqualification”. She went on: “Since the disqualification I’ve had to work alongside Dave but I have the final say on everything, and I sign all the cheques, anything that’s (inaudible) we have to discuss. Obviously we’re both 50/50 share so we have to discuss things”.
(xxviii) Mr Bradley also gave evidence. He said that he had been involved in transport for over 30 years and had held a CPC qualification since 1985. He was asked about Express and accepted that it was closed down because of financial difficulties. He said that when applying for an operator’s licence for Groupage he ticked the box to indicate that the Express licence would be surrendered and assumed that that sufficed. Later he said that he did not feel that he needed to state on the application for the Groupage licence that Express had been put into liquidation. He accepted when questioned by the Deputy Traffic Commissioner that he knew that there were questions on the application form about liquidation and insolvency and that he knew that there was a financial requirement, which had to be met if a licence was to be granted. He said that while he could not remember the form he felt that he had answered it as honestly as he could. He denied that he had set out to deceive anyone.
(xxix) When asked about the failure to notify the OTC that he had been disqualified from being the director of a company Mr Bradley said: “Yeah, I, again, I, you know, all I can do is apologise because I didn’t realise. I know obviously if you was a director, if you was a transport manager, because I dealt with the transport (inaudible), I was more concerned about the, you know, transport, like a driver, he had the transport guy being on the Operator’s Licence, rather than the director’s”. Mr Bradley was then asked what his role had been since May 2012. He said that he ran the transport side adding: “It’s you know, it, it’s been difficult when you’re running a company, and you’re running alongside you wife, and what have you, to …”. The Deputy Traffic Commissioner then questioned whether he was not effectively running the company. Mr Bradley replied that he did not see it like that. He went on to explain that in addition to the five vehicles there was a shipping side to the business, which was completely separate. However he then added that he ran the shipping side of the business and that he also ran the warehousing side of the business, together with his assistant transport manager. He said that the assistant transport manager had been booked on a CPC course but had not done it.
(xxx) Mr Newman then asked Mr Bradley about the evidence to the effect that he had represented himself to be a director of Groupage to the two VOSA Examiners. He replied: “Right, Yes. Now, I, when, when the two examiners came to my office, pre-arranged, I, we talked about transport issues, and it was all to do with compliance and everything. I never, at any stage, said that I was the director or put myself forward as the director. I don’t think it was ever mentioned. On the second visit that Ms Tracy Love came to my office, it was at that point that I told her that, when she referred to me as the director, in something she said, and I said, ‘I’ve got to put you straight, I’m not the director’, I explained to her why I wasn’t the director”.
(xxxi) When he questioned Mr Bradley the Deputy Traffic Commissioner made it clear that he had to decide whether Mr Bradley was involved in the management of Groupage at the present time. He pointed out that the fact that Mr Bradley remained as transport manager of a transport operation and the evidence of Mrs Bradley as to her role were factors that he would have to consider. Mr Bradley replied: “Yeah. I mean, you know, I, I try and distance myself. I don’t make, I, I’m aware that it’s always a broad line, what you can and can’t not be involved in, in what, what you think and what you say. You know, like, sort of, we’ve tried not to cross the line. We have, you know, my, my wife signs anything, I never put myself forward as a director, I don’t sign any documentation. ….”.
(xxxii) Mr Newman first made submissions in relation to the issue of regulatory action against Groupage. Since there is no appeal against this aspect of the case it is unnecessary to repeat these submissions. In relation to Mr Bradley he submitted that the Deputy Traffic Commissioner should make a distinction between being involved in the management of a company under the Companies Act and managing the transport activities of a business. He submitted that while the first kind of conduct would involve a breach of the disqualification order the second would not.
(xxxiii) The Deputy Traffic Commissioner gave a written decision dated 23 December 2013. He set out the history and summarised the evidence relating to all the issues before him. As we have indicated our own summary, set out above, has been tailored to the issues before us.
(xxxiv) The Deputy Traffic Commissioner made a number of findings in relation to disputed questions of fact that are significant in relation to the issue of disqualification. At paragraph 51 he said this: “I find as a fact that Mr Bradley put himself forward as a director at the meeting with the vehicle and traffic examiners on 18 April 2013.” He made that finding because he accepted the evidence of the examiners, who had made a contemporaneous note in their pocket books. He pointed out that Mr Bradley had allowed his name to remain, as a director, on OTC records. He added: “I found his denial that he had put himself forward as the director unconvincing in the extreme. I find from Mr Kirk’s evidence and Mr Bradley’s response on a number of issues that he was in fact still acting as a director notwithstanding his disqualification and his presentation to the examiners is entirely consistent with this conduct”. The Deputy Traffic Commissioner went on to refer to other respects in which he found that Mr Bradley had deliberately misled VOSA.
(xxxv) At paragraph 54 the Deputy Traffic Commissioner said that: “I find as a fact that Mr Bradley was acting in breach of the disqualification undertaking dated 10 May 2012”. He then quoted the undertaking, (see paragraph 2(vi) above), and continued: “The evidence within the statements including the interview with the sole director, Mrs Julie Bradley, (summarised at paragraph 2(xiii) above), leads me to the inevitable conclusion that Mr Bradley was running the operator company. He remained as transport manager for a relatively small company whose main business is transport and the evidence of the sole director, Mrs Bradley, was that her role was limited to financial matters and that she attended ‘two or three times a week’”. He went on to conclude that the failure to remove Mr Bradley’s name as a director on OTC records was not inadvertent but a deliberate attempt to withhold relevant information.
(xxxvi) In relation to regulatory action the Deputy Traffic Commissioner concluded that six of the grounds for taking action under s. 26 of the Goods Vehicles (Licensing of Operators) Act 1995, ["the 1995 Act"] had been made out. The Deputy Traffic Commissioner then went on to conduct a balancing exercise (a) to assess whether it was appropriate to take action, as an exercise of discretion under s. 26 and (b) to assess whether revocation was required under s. 27 of the 1995 Act. He concluded that the positive features and improvements put in place since the VOSA visit were more than outweighed by the negative factors. In particular he concluded that the findings that Mr Bradley had breached the disqualification and had failed to inform the Traffic Commissioner of material matters were fatal to the trust that must exist between an operator and the Traffic Commissioner. He concluded that it was very unlikely that Groupage would operate in compliance with the regulatory regime in the future and that it was appropriate to put Groupage out of business. He found that as an operator Groupage had lost its good repute. He concluded that it was not appropriate to take action on the basis that Groupage was no longer of appropriate financial standing. Turning to Mr Bradley’s position as transport manager he concluded that he had lost both his good repute and his professional competence. As a result he decided that he was unfit to manage the transport activities of any undertaking. He disqualified him for an indefinite period and added a rehabilitation measure, namely that he should pass his Certificate of Professional Competency Examination before making any application to remove the disqualification. The Deputy Traffic Commissioner revoked the operator’s licence held by Groupage exercising his discretionary powers under s. 26(1) of the 1995 Act and, under s. 27(1) on the grounds that Groupage was no longer of good repute or professionally competent.
(xxxvii) The Deputy Traffic Commissioner explained why he considered it appropriate to disqualify both Mr and Mrs Bradley in paragraphs 73-75 of his decision. Given the importance of this issue, especially in relation to Mr Bradley we quote these paragraphs in full:
“73. Mr Bradley is not a named director on the company records and his wife remains as the sole director. However, he was a director of record at Companies House until 31 May 2012 and he did not remove his name from the OTC’s records as a director. I also find that he was at all material times the de facto director as the controlling mind of the operator company. Section 252 of the Companies Act 2006 provides that: ‘In the Companies Acts “shadow director”, in relation to a company, means a person in accordance with whose directions or instructions the directors of the company are accustomed to act’. The evidence from the witnesses in this case leaves me in no doubt that after the 31 May, Mrs Bradley was a director with limited responsibilities in respect of finances and that Mr Bradley provided directions and instructions for the company. I therefore consider that the power to disqualify a director extends to Mr Bradley as a shadow director under sec. 251 above and as a de facto director.
74. The seriousness of Mr Bradley’s conduct is such that a disqualification from obtaining or holding an operator’s licence is imposed under section 28 of the Act for a period of five years with effect from 27 February 2014.
75. Mrs Julie Bradley’s culpability is less than her husband’s but as the sole remaining director, Mr Bradley’s deceit could not have operated without her connivance and support. I therefore disqualify Mrs Bradley under section 28 for period of one year with effect from 27 February 2014. This disqualification also serves to prevent any attempt to circumvent the revocation and disqualification of Mr Bradley by Mrs Bradley”.
(xxxviii) On 26 January 2014 the Appellant filed a Notice of Appeal. Various grounds of appeal were advanced under five main headings: (i) whether the power to disqualify under s. 28 of the 1995 Act extended to Mr Bradley, (ii) whether it was appropriate to disqualify Mrs Bradley, (iii) whether disqualification was necessary in this case (iv) whether the periods of disqualification imposed were disproportionate or excessive and (v) whether Mr Bradley was given notice, or adequate notice, of the basis on which the Deputy Traffic Commissioner would consider the question of disqualification.
3. At the hearing of the appeal both Appellants were represented by Mr Newman. He explained that the Appellants were hoping to be present at the hearing of the appeal but that they were inextricably caught in a traffic jam on a motorway following a serious accident. We gave Mr Newman a chance to telephone his clients to discuss whether or not he should apply for the appeal to be adjourned. Having spoken to the Appellants Mr Newman informed us that they were content for the appeal to proceed in their absence. Mr Newman had provided us with a skeleton argument and a bundle of authorities, for which we are grateful. At the conclusion of his argument we indicated that we would be prepared to take into account any further written submissions that he wished to advance after discussing the hearing with the Appellants. We had in mind, in particular, that had the Appellants been present they would have had the opportunity to give instructions in the course of the hearing. We also had in mind the possibility that, if we were persuaded to set aside the decision we would then need to consider whether the Tribunal should make its own order or whether the appropriate course was to remit the matter for re-hearing. We have received and we will take into account further submissions dated 22 April 2014.
4. We will consider the submissions made on behalf of the Appellants under the five main headings set out above. However we will approach them in a slightly different order.
Did the Deputy Traffic Commissioner have power to disqualify Mr Bradley?
5. Where a Traffic Commissioner revokes an operator’s licence under s. 26(1) or s. 27(1) of the 1995 Act he may also order, under s. 28(1), that the person who was the holder of the licence is disqualified (either indefinitely or for such period as the commissioner thinks fit) from holding or obtaining an operator’s licence. A number of consequential powers and provisions are then set out in s. 27(2) (3) & (4) of the 1995 Act. For the purposes of this appeal the next significant provision is s. 28(5)(a), which provides that: “The powers conferred by subsections (1) and (4) in relation to the person who was the holder of a licence shall be exercisable also – (a) where that person was a company, in relation to any director of that company, …”. It follows that whether or not the Deputy Traffic Commissioner had power to disqualify Mr Bradley depends first, on the true construction of the expression “any director” and second, if the Deputy Traffic Commissioner’s construction is correct on whether the facts of this case show that Mr Bradley was a director of Groupage.
6. The Deputy Traffic Commissioner concluded that the expression ‘any director’ extended to a person who could properly be described as a ‘shadow director’, (defined by s. 251 of the Companies Act 2006) and a ‘de facto director’. He went on to conclude that, on the findings of fact, which he made, Mr Bradley was both a shadow director and a de facto director and, in addition, he was a person who ought not, for the time being, to be the holder of an operator’s licence. Hence the disqualification for a period of five years.
7. Mr Newman submitted that as the term ‘director’ is not defined in the 1995 Act the applicable definition is that in s. 250 of the Companies Act 2006, (“the 2006 Act”). This provides that: “In the Companies Acts ‘director’ includes any person occupying the position of director by whatever name called”. He submitted that the definitions in s. 250 and s. 251 are mutually exclusive and that the Deputy Traffic Commissioner was wrong in law when he concluded that Mr Bradley was both a shadow director and a de facto director, because those two types of director are mutually exclusive. In any event he submitted that the expression ‘director’ in s. 28(5)(a) of the 1995 Act does not apply to anyone other than a lawfully appointed director whose name appears on the Register at Companies House. Finally, on this point, Mr Newman submitted that an operator’s licence is a ‘possession’ for the purposes of the Human Rights Act, with the result that any interference with the right to hold or obtain an operator’s licence must be in the public interest and proportionate.
8. We do not agree with the submission that s. 250 of the 2006 Act provides a full definition of ‘director’. It simply makes the point that what matters is whether the person concerned occupies the position of ‘director’ of the company in question. If on the facts of the case the person concerned does occupy the position of director then they are a director irrespective of any name or title that they may hold. We have reservations as to the correctness of the proposition that the three categories of ‘director’ are mutually exclusive for reasons that will appear in due course.
9. We are satisfied that there is now clear authority for the proposition that there are three ways in which a person can be held to be a director of a limited company. It is only necessary to refer to two authorities to justify this proposition. The first is Secretary of State for Trade and Industry v Dennis George Hollier & Others [2006] EWHC 1804 (Ch). The second is Holland v Commissioners for HMRC & another [2010] UKSC 51.
10. The three ways in which a person can be a director of a limited company are these: (i) directors in law, (de jure), (ii) shadow directors and (iii) directors in fact, (de facto). We will consider each category separately.
Directors de jure
11. Directors de jure are those who have been lawfully appointed as directors of the company in question and whose names appear as directors of that company on the register at Companies House. There should generally be no dispute as to whether or not a person is a director de jure. If there is then the fact that the person’s name appears in the register at Companies House as a director of the company in question is likely to provide strong proof.
Shadow Directors
12. The expression ‘Shadow Director’ is defined in s. 251 of the 2006 Act, which provides that it means: “a person in accordance with whose directions or instructions the directors of the company are accustomed to act”. That definition is followed by a provision designed to exclude a person giving professional advice to the directors of a company from being held to be a shadow director. Whether or not a person comes into the category of shadow director is a question of fact to be decided by assessing the evidence in each individual case. The essential feature would appear to be that a shadow director must be shown to play a part in the corporate governance of the company in question by telling the de jure director or directors what to do. It is not necessary to show that a shadow director gave all the directions or instructions necessary for the company to function. It is sufficient if he is shown to have played a part in the corporate governance of the company by giving directions or instructions. We will consider at a later stage whether the positions of shadow director and de facto director are mutually exclusive.
Directors De facto
13. In the case of Hollier the Secretary of State applied for orders under s. 8 of the Company Directors Disqualification Act 1986, (“the 1986 Act”). The ground relied on was that in the light of information or documents obtained by the Secretary of State under provisions in the Companies Act: “it is expedient in the public interest that a disqualification order should be made against any person who is or has been a director or shadow director of any company”. The case for the Secretary of State was that Dennis Hollier and some of the other Defendants, although not lawfully appointed as Directors were, nevertheless, de facto directors and, as such, liable to disqualification under s. 8 of the 1986 Act. The test for making a disqualification order is that the court must be satisfied that the person’s conduct in relation to the company makes him: “unfit to be concerned in the management of a company”.
14. The case was tried by Etherton J, as he then was. His review of the law in relation to de facto directors begins at paragraph 61 of his judgment. He pointed out that s. 22(4) of the 1986 Act provides that: “the expression director includes any person occupying the position of director, by whatsoever name called”. In other words the wording is exactly the same as s. 250 of the 2006 Act. Etherton J continued: “It is common ground, and is now well established, that for the purposes of the 1986 Act, ‘director’ includes a person who acts as a director even though never validly appointed as such (commonly referred to as a ‘de facto’ director)”.
15. In other words if the court is satisfied, on an application under s. 8 of the 1986 Act, that the person concerned is “unfit to be concerned in the management of a company” a disqualification order can be made whether that person is a director de jure, a shadow director or a director de facto. In our view the purpose of a disqualification order under s. 28 of the 1995 Act is to give Traffic Commissioners the power to prevent a person holding or obtaining an operator’s licence when they are unfit to do so. Given the similarity between the purpose of these two provisions we can see no justification for restricting the scope of s. 28 to directors de jure. On the contrary we are satisfied that the Deputy Traffic Commissioner was correct in concluding that he had the power to disqualify in this case. In our view it is appropriate, proportionate and in the public interest that the power to disqualify under s. 28 extends to all three categories of director.
16. That immediately raises the question of who comes into the category of de facto director? Etherton J began an extensive review of the authorities by saying this at paragraph 64: “The authorities are not entirely consistent in defining de facto director. The critical issue, and the jurisprudential difficulty, is to distinguish a de facto director from someone who acts for, or otherwise in the interests of, a company but is never more than, for example, a mere agent, employee or adviser”. We do not believe that it will be helpful to cite long passages from this decision or the decision in the Holland appeal. One reason is that at the end of the day the decision will turn on the findings of fact made in the case in question. Extensive citation from cases with different facts seems to us more likely to confuse than it is to assist. Instead we will seek to set out the principles that appear to us to emerge from the authorities. It is these principles that must guide the assessment of the evidence in each case, leading, in due course, to a decision as to whether or not the person concerned is proved to have been a de facto director.
17. In our view it is clear from Etherton J’s review of the authorities in Hollier that there is no single detailed and all embracing test to determine who is or is not a de facto director. Equally it is clear that it is unwise and potentially misleading to look for or to concentrate on a single decisive factor. Instead what is required is an assessment of all the evidence relevant to the part that the person concerned has played. It is not necessary, in order to become a de facto director, that the person concerned is shown to have participated in decision making over the whole field of the company’s activities. “A person may be a de facto director even though that person does not have day to day control over the company’s affairs and even though he or she acts as a director only in relation to part of the company’s activities”, (Hollier paragraph 73).
18. At paragraph 81 of the Hollier judgment Etherton J described being part of the corporate governing structure of the company as the ‘touchstone’ when deciding whether a person is a de facto director. A person can only be held to be a de facto director if they participate or have the right to participate in collective decision making on corporate policy and strategy and its implementation.
19. Turning to the appeal of Holland the position in that case was more complicated that that in Hollier. Mr Holland was the sole director of company ‘A’ which was, itself, the sole director of company ‘B’. The question was whether that meant that Holland was a de facto director of company B. While the Supreme Court was divided as to the result of the appeal it seems to us that there was little dispute as to the legal principles to be applied. At the end of paragraph 32 of his judgement Lord Hope quoted with approval the comment that what is important is not what a person calls himself but what he is proved to have done. We would simply add on this point that if there is evidence that a person has described himself as a director or has been described as such then that may strengthen a conclusion that his actions are those of a director and vice versa. This is simply an example of the importance of making an overall assessment of the relevant evidence. In some cases the evidence will be mutually supportive, producing a stronger and clearer picture than that produced by considering individual pieces of evidence. In other cases it will be contradictory, requiring careful assessment to establish whether or not the evidence that is accepted is sufficient to show that the person concerned is a de facto director.
20. In his judgment, in the Holland appeal, Lord Collins traced the history and development of the law in relation to de facto directors. He explained that two consequences flowed from the extension of the scope of a de facto director in more recent decisions. The first was to erode the distinction between de facto directors and shadow directors, (to which we will return). The second, (see paragraph 91 of the Holland decision), was: “that the courts were confronted with the very difficult problem of identifying what functions were in essence the sole responsibility of a director or board of directors”. He went on to refer to three suggested tests. It seems to us that the common feature in all three tests is the need to distinguish between, on the one hand, those who decide the policy which a company is to follow and/or those who decide how to implement that policy and/or those who originate the orders which are given to subordinates and, on the other, those who are instructed to implement policy decisions or to carry out orders passed down from above. We have used the expression and/or to stress that it is not necessary, in order to find that a person is a de facto director, to have evidence that the person concerned has done all these things. The critical distinction seems to be between those who can properly be held responsible for the actions of the company, for example because they had the power to change the way in which the company acted, and those who can simply choose between staying and obeying their orders or leaving because they have no power to influence decisions of which they disapprove.
21. Bearing these factors in mind it seems to us that the evidence needs to be assessed with questions such as the following in mind. It will not be necessary to ask every question in every case for the simple reasons (a) that all the questions are designed to highlight the distinction between the role of director on the one hand and that of subordinates on the other and (b) not all the questions will be relevant to the facts of an individual case. The questions are these:
(i) Did the person concerned participate in directing the affairs of the company?
(ii) Did the person concerned operate at the same level as the properly appointed directors as opposed to being subordinate to them at all times?
(iii) Did the person concerned describe himself as a director or was he held out by anyone in authority to be a director of the company?
(iv) Did the person concerned simply give advice to the directors and then withdraw or did he remain and join with other directors, whether de jure or de facto and participate in decisions affecting the future of the company?
(v) Does the evidence show that the person concerned did in fact participate in decision making about strategic or policy issues, including their implementation, not merely as an agent or employee or adviser, but as part of the corporate governing structure of the company?
22. Bearing in mind the warning that what matters is not the title that a person holds but what they are proved to have done the fact that the answer to question (iii) is that the person concerned claimed to be or was held out to be a director may not be sufficient on its own but may be very compelling when coupled with separate evidence that the person concerned was part of the corporate governing structure. At paragraph 91 of the Holland appeal Lord Collins quoted the definition of ‘Corporate Governance’ given in the Cadbury Report namely that: “it is the system by which businesses are directed and controlled”.
On the facts of this case was Mr Bradley a de facto director?
23. Mr Bradley’s name was removed from the register at Companies House when the period of disqualification took effect. Mrs Bradley was appointed as the sole director of Groupage in his place. However Mr and Mrs Bradley never informed the Traffic Commissioner of the disqualification. The Deputy Traffic Commissioner rejected the explanation that this was an inadvertent omission. He went on to accept the evidence of the Traffic Examiner and Vehicle Examiner that the Appellant had initially put himself forward to them as a director. In our view this is significant in that it indicates that the Appellant was representing that he had authority to act and would be acting on behalf of Groupage during this official investigation. In addition to this the Deputy Traffic Commissioner considered the effect of Mrs Bradley’s evidence that she dealt with the financial aspect of the business while her husband dealt with everything else. We accept that Mrs Bradley claimed that the position changed after May 2012 but we have to say that, on paper, the lack of detail as to how it changed and what additional tasks Mrs Bradley undertook renders this explanation unconvincing. In our view it is all the more unconvincing given the deliberate failure of Mr and Mrs Bradley to notify the Traffic Commissioner/OTC that he had resigned as a director of Groupage, following the order for disqualification. It appears that the Deputy Traffic Commissioner, who had the benefit of seeing and hearing the witnesses was equally unconvinced. The Deputy Traffic Commissioner’s conclusions were (i) that Mr Bradley had acted in breach of the disqualification undertaking, (ii) that he was the controlling mind of Groupage and (iii) that as a result he was both a de facto and a shadow director of Groupage.
24. Mr Newman submitted that the Deputy Traffic Commissioner was wrong to conclude that Mr Bradley had breached the disqualification undertaking. His argument was that this was a matter for a criminal court, with the result that it fell outside the Deputy Traffic Commissioner’s jurisdiction. He relied on Appeal 2004/202 David Holloway in which the Tribunal said that Traffic Commissioners should not try to establish the prospects of success in proceedings involving property law and invited us to extend this principle to the circumstances of the present case. We do not agree that it is appropriate to do so. The issue in the appeal of Holloway turned on the question of whether land was “available” for use as an operating centre. It was for the applicant in that case to prove that it was available, either by showing that he owned it or leased it or had permission to use it as an operating centre. The point made by the Tribunal was that Traffic Commissioners should not be put into a position of having to decide whether premises were available on the basis of an assessment of the prospects of success in some future litigation. In our view the position in the present case is quite different. In particular we reject the suggestion that the Deputy Traffic Commissioner should have made no finding as to whether or not Mr Bradley was a director in the absence of a conviction for an offence under the 1986 Act. In our view s. 28(5)(a) gave the Deputy Traffic Commissioner an express power to consider (a) whether or not Mr Bradley was a director of Groupage and (b) if he was, whether or not it was appropriate to disqualify him. Taken to its logical conclusion the argument advanced by Mr Newman would mean that in a case where a decision was taken not to prosecute under the 1986 Act, for reasons having nothing to do with the person’s fitness to hold an operator’s licence, it would not be possible for a Traffic Commissioner to decide whether or not that person was a director, in circumstances where, if they were, disqualification, from obtaining or holding an operator’s licence, would be appropriate. In our view such a conclusion is not warranted by the wording of the 1995 Act nor would it be in the public interest. We are satisfied that the Deputy Traffic Commissioner was entitled to consider, on the basis of the evidence before him, whether or not Mr Bradley was a de facto or shadow director. It seems to us that it makes little difference whether those findings include an express conclusion that there has been a breach of the disqualification order or whether that is implied from the findings themselves. In any event it is important to remember that the standard of proof required before the Deputy Traffic Commissioner is the normal civil standard of the balance of probability, whereas in criminal proceedings the higher standard of proof beyond reasonable doubt would be required.
25. Mr Newman next submitted that the Deputy Traffic Commissioner was wrong to find that Mr Bradley was both a shadow director and a de facto director. In advancing this submission Mr Newman relied on a passage in the judgment of Millet J, as he then was, in the case of Re Hydrodam (Corby) Ltd [1994] 2 BCLC 180, where he said that the terms de facto director and shadow director: “do not overlap. They are alternatives, and in most and perhaps all cases are mutually exclusive”. The underlining is ours to emphasise that Millet J envisaged the possibility that there would be exceptions.
26. We have already indicated that Lord Collins, at the end of a review of the authorities, which considered many cases decided after 1994, took the view that the distinction had been eroded. He went on, having quoted the passage from Re Hydrodam, above, to say this: “But the distinction was impossible to maintain with the extension of the concept of de facto directorship and the consideration of such matters as the taking of major decisions by the individual, which might be through instructions to de jure directors, and the evaluation of his real influence in the affairs of the company: see Re Kaytech International plc [1999] 2 BCLC 351 at 424, per Robert Walker LJ”. An earlier passage from this judgement, again commenting on what Millet J said, is quoted at paragraph 76 of the judgment of Etherton J in the Hollier case, where it was said that the two concepts do nonetheless: “… have at least this much in common, that an individual who was not a de jure director is alleged to have exercised real influence (otherwise than as a professional adviser) in the corporate governance of a company. Sometimes that influence may be concealed and sometimes it may be open. Sometimes it may be something of a mixture, as the facts of the present case show”. Etherton J went on to stress that the expression ‘real influence’ must be confined to those who exercise real influence as a part of the corporate governing structure of the company.
27. It seems to us that it is quite possible to envisage circumstances in which a person plays a direct part in the corporate governing structure of a company without giving instructions or directions to a director who is/are then accustomed to act upon them. Such a person would be a de facto director but would not come within the definition of shadow director in s. 251 of the 2006 Act. On the other hand it is difficult to see how a person who gives instructions or directions on the basis of which a director is accustomed to act does not, at the same time, play a part in the corporate governing structure of the company. On that basis there is an argument for saying that such a person is both a shadow director and a de facto director. In our view what really matters is whether the evidence shows that the person concerned probably played a part in the corporate governing structure of the company in question. If the answer is that they did that, in our view, is what matters for the purpose of engaging s. 29(5)(a) of the 1995 Act. The reality is that there will be cases where on one occasion instructions or directions are given to another director, who is accustomed to act on them, while on another occasion the same person will decide to implement a policy, by issuing instructions, without reference to any other director of the company. We take the view that considering whether the person concerned is a shadow director on the first occasion and a de facto director on the second is more likely to distract attention from the real issue than it is to assist.
28. Mr Newman submitted that the Deputy Traffic Commissioner made no proper assessment of Mr Bradley’s role and that the Deputy Traffic Commissioner failed to show that Mr Bradley’s actions were those of a person at director level rather than those which could, quite properly, have been discharged by someone below that level. He was also critical of the fact that the Deputy Traffic Commissioner relied on Mr Bradley’s actions as the transport manager to show that he was a de facto or shadow director.
29. We accept that there are references to Mr Bradley’s actions/inaction as transport manager in the Deputy Traffic Commissioner’s decision. This was inevitable given that Mr Bradley’s repute and professional competence as transport manager were in issue in the Public Inquiry. We also accept that Mr Bradley’s conduct as transport manager does not, on its own, provide evidence that he played a part in the corporate governing structure of Groupage. The reason is that many transport managers carry out their duties without ever doing anything that plays a part in the corporate governing structure of the company that employs them. On the other hand there are others who are directors in addition to being transport managers. In the case of those who are not de jure directors the critical factor is likely to be whether their duties, in addition, to their duties as transport manager show that they are playing a part in the corporate governing structure of the company in question. In our view the structure of the decision makes it clear that the Deputy Traffic Commissioner generally had this distinction in mind. While the reference to Mr Bradley’s role as transport manager, in paragraph 54 of the decision, would have been better included in a separate paragraph our view is that other factors weighed far more heavily with the Deputy Traffic Commissioner.
30. While there is no direct evidence that Mr Bradley gave any particular instruction or direction to his wife our view is that it was open to the Deputy Traffic Commissioner to draw this inference. On that basis we take the view that the Deputy Traffic Commissioner was entitled to conclude that there were times when Mr Bradley acted as a shadow director and times when he acted as a de facto director. Given the clear finding that Mr Bradley was the controlling mind of the company which, in our view, was justified by the evidence, we cannot see that there was any need for the Deputy Traffic Commissioner to go on to make further findings that Mr Bradley acted as a shadow director on one occasion and as a de facto director on another and so on. The finding that justified the Deputy Traffic Commissioner in going on to decide whether or not to disqualify was the finding that Mr Bradley was the controlling mind of the company, and therefore played a part in the corporate governance of Groupage.
Was Mr Bradley given adequate notice?
31. The first point taken by Mr Newman in relation to notice is that Mr Bradley was not warned, in the letter sent to him personally, (see paragraph 2(xviii) above), that he was at risk of being disqualified from holding or obtaining an operator’s licence. The short answer to this point is that the letter sent to Mr Bradley personally was sent to him in his capacity as transport manager. It was intended to call him to the Public Inquiry in that capacity. Accordingly, it contained a warning that a finding that he had lost his good repute and/or his professional competence as a transport manager meant that the Traffic Commissioner would be required to disqualify him as a transport manager. In our view it would have been wrong to include in this letter an additional warning that Mr Bradley was at risk of being disqualified, as a director, if the operator’s licence held by Groupage was revoked. It follows that there is nothing in this ground of appeal.
32. The second point taken by Mr Newman in relation to notice is that the call-up letter to Groupage did not give notice that Mr Bradley was at risk of disqualification. We reject this submission. The relevant parts of the call-up letter are summarised or quoted at paragraph 2(xvi) & (xvii) above. By the time that this letter was sent the Traffic Commissioner was aware that Mr Bradley was no longer a director de jure and Mr and Mrs Bradley would also have been aware that she was the sole director de jure of Groupage. Nevertheless the call-up letter was addressed to “the Directors” of Groupage, in the plural. On its own this may not be a particularly strong indication that Mr Bradley was at risk. However it has to be considered in the context of the passage quoted at paragraph 2(xvii) above, the last part of which stressed: “It appears that Mr Bradley may still be assuming responsibility for the running operations of this company in direct contravention of the order of disqualification”. In our view the assertion that Mr Bradley may have been acting in contravention of the order of disqualification makes it quite clear that what is being suggested is that he may still be acting as a director of Groupage, albeit no longer a director de jure. In our view a careful reading of the call-up letter would have alerted Mr Bradley to the fact that (a) he was at risk of disqualification and (b) that he was at risk because he was continuing to act as a director of Groupage, notwithstanding the disqualification and notwithstanding his resignation.
33. The third point taken by Mr Newman in relation to notice is that there was no mention during the Public Inquiry that Mr Bradley might be at risk of disqualification because he was a shadow or de facto director. As a result, submits Mr Newman, Mr Bradley did not have an opportunity to explore the matter during the evidence nor did he have a chance to make submissions on the point. Developing that submission Mr Newman went on to argue that either during the Public Inquiry or later, but before publication of the decision, the Deputy Traffic Commissioner should have made it clear that he was considering findings that Mr Bradley was a shadow or de facto director, and should have allowed time for further submissions to be made on that point.
34. We start with the firmly established proposition that Mr Bradley, as a person at risk of being disqualified, was entitled to know the substance of the case he had to meet. Did the call-up letter achieve this or was there something else, which could and should have been done?
35. In relation to the evidence at the Public Inquiry it seems to us that Mr Bradley was given adequate notice of all the evidence called on this point and all the evidence on which the Deputy Traffic Commissioner based his conclusion that Mr Bradley was a shadow and/or de facto director of Groupage. It is clear that Mr Bradley and Mr Newman had an opportunity to deal with this evidence in the course of the Public Inquiry. In answer to a question from the Tribunal Mr Newman frankly conceded that he did not think that the evidence would have been any different if Mr Bradley had been given more detailed notice. Approached in this way we are satisfied that Mr Bradley was given adequate notice in relation to the substance of the evidence on this point.
36. We accept that the Deputy Traffic Commissioner did not spell out, at any stage during the Public Inquiry, that he would be considering whether he had power to disqualify as a result of making a finding that Mr Bradley was a shadow and/or de facto director. However near the start of the Public Inquiry he mentioned the fact that Mr Bradley had been disqualified and continued: “The issues arising from that are the alleged failure to notify, and the role that Mr Bradley then had with regard to Groupage”. At the start of his submissions Mr Newman said that there were two separate stages the first being general compliance and the second the issue of: “Mrs Bradley’s, Mr and Mrs Bradley’s position as, as directors”. Having dealt with the first stage Mr Newman turned to the position of Mr Bradley pointing out that he resigned as a director on 31 May 2012 in order to comply with the disqualification order. The Deputy Traffic Commissioner interjected to remind Mr Newman that he had not resigned as far as the Operator’s licence was concerned. Mr Newman then went on to make submissions as to the distinction between ‘being involved in the management of a company under the Companies Act’, on the one hand and ‘managing the transport activities of the business’ on the other. He submitted that there was no inconsistency between the disqualification order and the latter activity. A little later the Deputy Traffic Commissioner said this: “We’re talking about a small unit where it would appear that Mr Bradley was very much in the controlling mind”. Mr Newman did not immediately respond so the Deputy Traffic Commissioner continued: “Are you suggesting, Mr Newman, that that’s not the case, on the evidence I’ve heard at this company”? Mr Newman’s immediate response was: “No, no”. His answer went on to refer to the issue of notification.
37. When these exchanges are considered in the context of the call-up letter and the evidence given at the Public Inquiry is seems to us that it is clear that these submissions and the Deputy Traffic Commissioner’s interjections were all directed to the issue of whether or not Mr Bradley was acting as a director of Groupage at a time when he was no longer a de jure director of the company. We are not persuaded that there would have been any significant difference in these exchanges if specific reference had been made to the possibility that Mr Bradley was a shadow or de facto director. For these reasons we reject this submission.
38. The fact that the question of disqualification only arises after an operator’s licence has been revoked appears to give rise to a reluctance to raise the issue during submissions. Those representing operators appear to be inhibited in raising the question for fear that doing so will be interpreted as a concession that revocation is appropriate. In our view when the question of disqualification has been raised in the call-up letter those appearing for operators, (and operators appearing in person) must understand that they cannot expect to be given a further opportunity to make submissions on the point. That may mean, in turn, that they must find a form of words to indicate that they are not making any concession but that they are simply covering every eventuality. When such a form of words is used Traffic Commissioners must proceed on the basis that no concession has been made. Traffic Commissioners can also be inhibited about inviting submissions on this question in case it is argued on appeal that the invitation is an indication that they have already made up their mind to revoke the licence. In our view the better course for Traffic Commissioners to adopt is to wait until submissions have finished. If submissions are made about disqualification there will be no need to raise the question. But if no submissions have been made and disqualification remains a possibility it seems to us that something needs to be said to pre-empt the point being taken on appeal. What we have in mind is something to this effect: “Mr X I know that your principal submission is that it would not be appropriate to revoke this licence. If, on reflection, I am unable to accept that submission and I decide to revoke the licence I will then need to consider the question of disqualification. Do you want to make any submissions as to whether or not disqualification would be appropriate in that situation and/or as to the appropriate length of any disqualification?” In our view this form of words makes it clear that the Traffic Commissioner has an open mind and has not decided upon revocation but at the same time it enables the operator or anyone appearing for the operator to make submissions to cover the position should the licence be revoked.
Was disqualification necessary and justified?
39. In relation to Mr Bradley Mr Newman submitted that the brevity of the reasons for disqualification, given in paragraph 74 of the decision, (quoted in full at paragraph 2(xxxvii) above), show that the disqualification of Mr Bradley was neither necessary or justified. The Deputy Traffic Commissioner relied on the seriousness of Mr Bradley’s conduct as the justification for disqualification. Mr Newman pointed out that the Deputy Traffic Commissioner did not provide any further detail of the conduct relied on. We do not find that in the least surprising because we are quite satisfied that the Deputy Traffic Commissioner intended this form of words to refer back to his earlier detailed findings. When one considers the findings summarised in paragraph 2(xxxiv)-(xxxvii) above it is clear (a) that Mr Bradley misled the Traffic Commissioner/OTC into believing that he was still a director of Groupage and (b) that as the controlling mind of the company he was ultimately responsible for the failings which led to the licence being revoked on a number of different grounds. These included systematic failings in relation to maintenance, drivers’ hours, tachographs and record keeping. In our view the circumstances found to be proved by the Deputy Traffic Commissioner meant that an order disqualifying Mr Bradley was both necessary and justified. Accordingly we reject this ground of appeal.
40. In relation to Mrs Bradley the main point taken by Mr Newman was that as the reason given for disqualifying her was to prevent any attempt to circumvent the disqualification of her husband there would be no need to disqualify her if his appeal in relation to disqualification succeeded. In addition to this point he submitted that the reasons given for disqualifying Mrs Bradley were inadequate.
41. We reject Mr Newman’s main submission on this point for a number of reasons. First, it is not correct to say that the sole reason for disqualifying Mrs Bradley was to avoid any circumventing of Mr Bradley’s disqualification. When paragraph 75 of the Deputy Traffic Commissioner’s decision is considered as a whole, (see paragraph 2(xxxvii) above), it is clear that preventing the circumvention of Mr Bradley’s disqualification was merely a secondary reason. Second, the primary reason for disqualifying Mrs Bradley was stated to be her role as the remaining director of Groupage and the fact that Mr Bradley’s deceit could not have operated without her connivance and support. Third, we have already explained why the appeal against Mr Bradley’s disqualification must be dismissed so the argument put forward by Mr Newman fails for that reason as well.
42. In our view the reasons given in paragraph 75 of the decision, taken with the other findings in relation to her role as a director of Groupage show that disqualification in the case of Mrs Bradley was both necessary and justified. Accordingly we reject this ground of appeal.
Length of Disqualification
43. Mr Newman submitted that disqualifications of five years in the case of Mr Bradley and one year in the case of Mrs Bradley were excessive and disproportionate. In developing this submission he argued that there had been no proper balancing exercise because there was no indication that favourable factors had been taken into account. In particular he referred to the following: (i) this was the first Public Inquiry to which either Mr or Mrs Bradley had been called, (ii) they gave truthful evidence in relation to their respective roles in Groupage, (in view of some of the Deputy Traffic Commissioner’s findings this can only be true of part of their evidence), (iii) Mr Bradley had been an operator for 30 years, he was now 60 years of age, so a five year disqualification allowed for ‘no light at the end of the tunnel’, (iv) the prohibitions were not of the most serious nature, (v) it was said in T/2010/29 David Finch t/a David Finch Haulage that a three year disqualification, following a first Public Inquiry was “towards the top end of fixed term disqualifications” and (vi) that in the case of Mr Bradley a five year fixed term disqualification was more severe than the indefinite disqualification from acting as a transport manager.
44. We agree that before deciding the appropriate length of a disqualification a balancing exercise is necessary. In the present case the Deputy Traffic Commissioner set out various positive factors in paragraph 61 of his decision. These were that: (i) the prohibitions were not of the most serious nature, (ii) there had been five clear encounters with VOSA examiners, (iii) the vehicles had been maintained, (iv) digital data and two digital cards did not show any driver’s hours offences, (v) there was evidence of training and a new maintenance agreement. He commented in relation to the last point that: “The vast majority of this evidence I consider ‘too little too late’.” He then went on to make further adverse comments and criticisms of the way in which Groupage had been operated. In paragraph 63 the Deputy Traffic Commissioner went on to say this: “The positive features and the improvements put in place since the VOSA investigation and call-up letter are more than outweighed by the negative determinations set out in the preceding paragraphs. In particular, the finding that Mr David Bradley has acted in breach of the Disqualification Undertaking in that he was directly or indirectly involved in the management of the operator company, and the failures to inform the traffic commissioner of material matters with regard to the liquidation etc., are fatal to the trust required between an operator and the traffic commissioner and to the operator’s good repute”. We are quite satisfied that the Deputy Traffic Commissioner did conduct a balancing exercise in this case. We accept that it was done in the context of deciding whether or not to revoke the licence but we are not persuaded that it was necessary to repeat the exercise when considering disqualification. It may be that there were a few other features only relevant to disqualification but we are satisfied that they would have made no difference.
45. The decision in the appeal of David Finch Haulage, (see above), provides useful guidance about the approach to disqualification, but, as the Tribunal pointed out in T/2012/56 & 57 Deep Transport Ltd & Midland Transport Ltd decisions on the appropriate length of a disqualification depend on the facts of each individual case. It follows that the Tribunal will not be assisted by reference to the length of disqualification imposed in another case unless the facts of the two cases are identical, which is not the position here. The Deputy Traffic Commissioner had the advantage of seeing and hearing the witnesses in this case. He took a serious view of the deception involved in failing to inform the Traffic Commissioner that Mr Bradley had been disqualified and the fact that Mr Bradley continued to manage Groupage, as a shadow or de facto director in the period following his disqualification. We are not persuaded that there is any proper comparison between this case and the appeal of David Finch Haulage which demonstrates that a five year disqualification was either disproportionate or excessive.
46. In our view the idea that a five year disqualification is a more severe outcome than the indefinite disqualification from acting as a transport manager is plainly wrong. The five year disqualification will come to an end on the fifth anniversary of the date on which it comes into force. The indefinite disqualification will remain in effect for the rest of Mr Bradley’s life unless he first passes the Certificate of Professional Competency Examination and then successfully applies for the disqualification to be removed. We reject this ground of appeal as being misconceived.
47. Finally Mr Newman submitted that there was no clear distinction between the five year disqualification in respect of Mr Bradley, the one year disqualification in relation to Mrs Bradley and the absence of any disqualification in relation to Groupage. We accept that it would have been open to the Deputy Traffic Commissioner to disqualify Groupage. However it seems to us that having revoked the licence held by Groupage and having disqualified the two people responsible as directors of Groupage the Deputy Traffic Commissioner may well have felt either that there was no need to disqualify the company or that it would serve no useful purpose to do so. Whatever the reason we cannot see how the fact that Groupage was not disqualified could justify any alteration in the disqualifications imposed on Mr or Mrs Bradley. As to the difference between the two of them it seems to us that the Deputy Traffic Commissioner made it perfectly clear that in his view Mrs Bradley was less culpable than her husband. That is a sound basis on which the distinguish between the two of them, with the result that this ground of appeal fails.
48. Having rejected all the grounds advanced in support of this appeal the appeal is dismissed and the orders for disqualification stand.
His Hon. Michael Brodrick, Judge of the Upper Tribunal,
Principal Judge for Traffic Commissioner Appeals.
3 June 2014
