Aspey Trucks Ltd, Re [2010] UKUT 367 (AAC)

IN THE UPPER TRIBUNAL
ADMINISTRATIVE APPEALS CHAMBER
[2010] UKUT 367 (AAC)Venue (TRAFFIC COMMISSIONER APPEALS), ON APPEAL FROM THE DECISION OF TOM MACARTNEY, SITTING AS, DEPUTY TRAFFIC COMMISSIONER for the NORTH WESTERN TRAFFIC AREA,
Between
Aspey Trucks Ltd, Re
Date 8 June 2010
[1]This was an appeal from the decision of the Deputy Traffic Commissioner for the North Western Traffic Area made on 8 June 2010 when he refused the Appellant’s application for a Standard National Operator’s Licence, authorising the use of 6 vehicles and 8 trailers. The application was refused under the provisions of S.13(3)(a), (b) & (c), and Schedule 3 of the Goods Vehicles (Licensing of Operators) Act 1995.[2]The factual background to this appeal appears from the documents, the transcript and the Deputy Traffic Commissioner’s decision and is as follows:(i) The Appellant company does not hold an operator’s licence. It applied for a Standard National Operator’s Licence, authorising 6 vehicles and 8 trailers, on 20 February 2009. The two directors shown on the application form were Mr E.J Wood and Ms A.M. Aspiotis.(ii) On 26 October 1998, Mr Wood was convicted at Woolwich Crown Court of Conspiracy to Supply Class B Drugs. He was sentenced to 11 years imprisonment and a Confiscation Order in the sum of £12,000 was made.(iii) The Appellant company’s application was considered by the Traffic Commissioner for the North Western Traffic Area and, by a decision dated 4 September 2009, she refused the application on the grounds that Mr Wood did not satisfy the repute requirement, either as a director, or as the proposed Transport Manager.(iv) This decision was the subject of an appeal to the Upper Tribunal and, by a decision signed by Judge Burton on 14 December 2009, the appeal was allowed and the application was remitted for reconsideration by another Traffic Commissioner or Deputy Traffic Commissioner, who would consider all matters afresh. The matter, therefore, came before the Traffic Commissioner for the North Eastern Traffic Area, sitting as a Deputy for the North Western Traffic Area, at public inquiry, on 12 May 2010.(v) The papers before the Deputy Traffic Commissioner, and before the tribunal, contain documentation touching on Mr Wood’s conduct as a prisoner, and his successful application for parole. The Deputy Traffic Commissioner did not question the assertion that Mr Wood had been “a model prisoner”. But the facts of the offence gave rise to serious concern. The offence was detected when Mr Wood returned from France, having driven there and back in a Heavy Goods Vehicle used for the commercial transportation of goods. An amount of 785 kilos of cannabis resin was found hidden in secret compartments below the floor of the trailer. The estimated street value of the drugs was put at £3.4 million. At the time, Mr Wood did not hold an operator’s licence and so the use of the vehicle was unlawful. On top of that, Mr Wood was disqualified from driving, having been convicted of driving with an alcohol level over the prescribed limit in 1997. Mr Wood pleaded ‘Not Guilty’ to the Conspiracy to Supply Class B Drugs, but was convicted by a jury. An appeal to the Court of Appeal (Criminal Division) was unsuccessful. The conviction still stands and has not been overturned. It can never be spent.(vi) In addition to the question of repute, the Deputy Traffic Commissioner considered professional competence and financial standing. In relation to professional competence, Mr Gary Lyons had been nominated as a Transport Manager, although it is not clear from the paperwork whether this was as well as, or in place of, Mr Wood. Mr Lyons, however, did not attend the public inquiry “due to a prior engagement”. In relation to financial standing, the company relied on a letter from the Royal Bank of Scotland, to be found at p.269 of the tribunal’s bundle.(vii) At the Public Inquiry the Deputy Traffic Commissioner was told that Aspey Trucks Ltd bought and sold commercial vehicles. It wanted an operator’s licence because the directors wished to “move into doing transport”. Mr Wood explained that Mr Lyons could not be present because he was working (as a driver). He was currently a full time driver for somebody else. However, the plan was that Mr Lyons would work as a Transport Manager for 20 hours a week, on Fridays, Saturdays and Mondays. The Deputy Traffic Commissioner asked: DTC: How much will you be paying him? Mr Wood: Well I haven’t actually worked that out with him yet, it’s whatever we come to an arrangement on. DTC: You have a Transport Manager that you’ve agreed to employ for twenty hours a week, but you haven’t yet … Mr Wood: I haven’t decided … we’ve just said we’ll either employ him Friday, Saturday and Monday, or I might even get him to stay in the office and sell vehicles as well. I’ve got to negotiate what I want to do with him, in that sense.(viii) Financial standing was evidenced by some bank statements, which of themselves did not show that sufficient funds were available and a letter from Royal Bank of Scotland, dated 27 April 2010, to be found at p.269 of the tribunal bundle.(ix) In the application form dated 20 February 2009, signed by Mr Wood, he said (Q.14(a)) that he had not been declared bankrupt. At the public inquiry, however, he admitted that he had – in 1988/9, although he said that his creditors were paid 99p in the pound.(x) In his summing up, the Appellant’s then representative submitted, amongst other things, that:
“Statute never suggested that two serious convictions put an operator out of business for good. It leaves a discretion in the Traffic Commissioner, which is where it should be. One of the offences is, of course, spent in any event”. (xi) In his written decision dated 8 June 2010, the Deputy Traffic Commissioner considered the events and circumstances surrounding the conviction for conspiracy. He noted the essential facts underpinning the conviction. He found that Mr Wood was a disqualified driver and knowingly drove the HGV used in connection with the importation of cannabis resin whilst disqualified, uninsured and without the authorisation of an operator’s licence. (xii) The Deputy Traffic Commissioner also found that Mr Wood had deliberately failed to declare his previous bankruptcy. (xiii) On the other hand, the Deputy Traffic Commissioner identified two important positive features of particular importance. First, it was amply demonstrated that Mr Wood had been a ‘model prisoner’ and had been awarded parole at the earliest stage. Second, following his release from prison, he had successfully run a business. Nevertheless, notwithstanding the positive features, the Deputy Traffic Commissioner concluded that the Appellant company, with Mr Wood as its principal director, had failed to satisfy him as to repute. (xiv) The Deputy Traffic Commissioner did not believe that the arrangement with Mr Lyons as a proposed Transport Manager was genuine, and he thought that Mr Lyons excuse for not attending at the public inquiry was “unconvincing” especially as he was “specifically expected to be present”
. Additionally, the Deputy Traffic Commissioner was not satisfied that Mr Wood had good repute as a Transport Manager. Consequently, the Appellant company was without professional competence. (xv) In relation to financial standing, the Deputy Traffic Commissioner found the evidence before him to be inadequate. The letter from the Royal Bank of Scotland was ambiguous and unacceptable and, without proper and specific evidence of an overdraft facility, the Appellant had failed to satisfy the test “by a substantial margin”.[3]At the hearing of this appeal, the Appellant was represented by Mr Harris who relied upon a skeleton argument for which we were grateful. Mr Harris wished to produce additional financial information but, when we looked at it, we saw that it related to circumstances arising after the public inquiry, and so it was not admissible (See Transport Act 1985, as amended, Schedule 4, Paragraph 17(3)).[4]The first point made was that, apart from the conviction for Conspiracy, any previous convictions were spent and should have been disregarded.[5]We find that a careful examination of the decision shows that this was exactly the approach of the Deputy Traffic Commissioner, who did not misdirect himself in the application of Schedule 3, Paragraph 2(a). There is no suggestion in the decision that the Deputy Traffic Commissioner felt himself obliged to find that Mr Wood was not of good repute because of spent convictions. Rather, the Deputy Traffic Commissioner took account of the unspent Conspiracy conviction, and then considered those facts relating to it that it would be unreal and artificial to disregard. The facts, whether or not they resulted in convictions, are an integral part and parcel of the picture, and if relevant clearly need to be put into the balance, on one side or the other. This was the approach taken by the Deputy Traffic Commissioner when he considered whether, in his discretion, he was prepared to find that Mr Wood had good repute at the date of the public inquiry.[6]The next point was that the Deputy Traffic Commissioner failed to pose the question set out by the Transport Tribunal in Priority Freight Ltd & Paul Williams (2009/225) – namely, how likely is it that this operator will, in future, operate in compliance with the operators’ licensing regime?[7]The tribunal rejects this submission. First, unlike Priority Freight Ltd, this Appellant is not presently an operator. Refusal of the application will not put a haulage firm out of business and the Deputy Traffic Commissioner had no past actions or conduct as an operator to look at (positive or negative) upon which he could sensibly approach the question. What he had was a conviction, sustained less than 12 years earlier, resulting in a sentence of 11 years imprisonment – and a duty to consider whether the man convicted of the offence had ‘good repute’. It is also plain that the Deputy Traffic Commissioner did think about whether he could trust Mr Wood. He found that he could not, saying at paragraph 40 of the decision: “Mr Wood has been to prison for a drug offence which involved the use of a Heavy Goods Vehicle. Mr Wood was driving a Heavy Goods Vehicle during the commission of this offence while disqualified from driving. Mr Wood knew that he was not insured for this journey. Mr Wood was running a haulage operation at this point, including the very goods vehicle used in the supply of drugs, without holding an operator’s licence, yet he was aware of the need for such a licence”.[8]The distinction between an applicant and an existing operator is important. In Muck It Ltd and Others v Secretary of State for Transport (2005) EWCA Civ 1124 the Court of Appeal considered the effect of effect of Council Directive 92/26/EC (as amended). Rix L.J. noted:
“Article 6.1 clearly relates to applications and Article 6.2 clearly relates to revocations. Article 6.1 is neutral as to where the burden of proof lies, but of course in the case of applications it is natural to think that it lies on the applicant.”
[9]It is also useful to note that the Priority Freight question does not replace the well known ‘ Bryan Haulage question’, which itself followed the decision of the Court of Appeal in Crompton (T/a David Crompton Haulage) v. Department of Transport North Western Area [2003] EWCA Civ 64 . As the tribunal in Priority Freight said: “Before answering the ‘Bryan Haulage question’ it will often be helpful to pose a preliminary question, namely: how likely is it that this operator will, in future, operate in compliance with the operator’s licensing regime? If the evidence demonstrates that it is unlikely then that will, of course, tend to support a conclusion that the operator ought to be put out of business. If the evidence demonstrates that the operator is very likely to be compliant in the future then that conclusion may indicate that it is not a case where the operator ought to be put out of business. We recognise, of course, that promises are easily made, perhaps all the more so in response to the pressures of a Public Inquiry. What matters is whether those promises will be kept. In the present case the Appellant company was entitled to rely on that old saying that ‘actions speak louder than words’. By the date of the Public Inquiry it had already taken actions, which enabled it to demonstrate that it was again substantially compliant … In other words even though the offences were numerous and serious they were offences of omission, in the sense that the management of the Appellant company failed to prevent them, rather than offences of commission, in the sense that the management actually set out to require or encourage others to commit them.[10]In a case such as this, the Deputy Traffic Commissioner was not looking at putting someone out if business. Rather, he was deciding whether or not to give his official seal of approval to a person seeking to join an industry where those licensed to operate on a Standard National or Standard International basis must, by virtue of S.13(3), prove upon entry to it that they are of good repute. In this respect, Traffic Commissioners are the gatekeepers to the industry - and the public, other operators, and customers and competitors alike, all expect that those permitted to join the industry will not blemish or undermine its good name, or abuse the privileges that it bestows. What does “Repute” mean if it does not refer to the reasonable opinions of other properly interested right-thinking people, be they members of the public or law-abiding participants in the industry? Consequently, the balancing exercise is best assisted by reference to the test identified in Crompton. Here Kennedy LJ said:
“There must therefore be a relationship of proportionality between the finding and the sanction, and that relationship has a direct bearing on the approach to be adopted in any set of circumstances to the question of whether or not the individual has lost his repute.”
[11]The Deputy Traffic Commissioner was obliged to form his own view as of the date of the public inquiry. He needed, and was entitled to, the true facts. A good deal of material was placed before him by the Appellant’s representatives. His summary of the salient facts cannot be faulted. Indeed, in our view, the Deputy Traffic Commissioner would have been guilty of a serious dereliction of his duty to the public if he had not discovered and placed into the public domain the full picture, as proved by the conviction, and as illuminated by the sentence and documentary evidence. Then, against that, he recognised and weighed the salient positive features to see if they outweighed the obvious impact upon repute of such a conviction, and of such conduct. Not surprisingly, and despite the passage of time, he concluded that they did not. This conclusion, we find, was not plainly wrong. In fact, given the use of a Heavy Goods Vehicle in the commission of the crime, any other conclusion would, we think, have astonished the public and scandalised the industry. There is clearly, in our view, a relationship of proportionality between the finding and the result. The result in this case is simply that the Appellant company will not be able to embark upon a new venture in a regulated industry that, by law, requires good repute as an entry starting point.[12]The skeleton argument suggests that the Traffic Commissioner went too far in establishing the background circumstances of the offence committed by Mr Wood. The assessment, it is claimed, went “behind the conviction”, and “having correctly disclosed the conviction at the application stage, the basic facts offered by the Appellant was (sic) sufficient”. We disagree. On any view this offence of Conspiracy to Supply Class B Drugs was very grave indeed. It was an offence of commission rather than omission. It involved drugs with a street value estimated at several millions of pounds. It involved the use of a Heavy Goods Vehicle, used and driven by Mr Wood, to import the drugs from overseas. It resulted in a sentence of 11 years imprisonment. The sentence alone would suggest that the sentencing judge, having presided at the trial, put Mr Wood at (or very close to) the heart of the conspiracy. The surrounding circumstances involved a total disregard of operator licensing and road traffic law.[13]For this reason we hold out no short or medium term prospect of Mr Wood discharging the burden upon him of establishing that he, or any company of which he is a director, will be deemed to be of good enough repute to acquire a standard operator’s licence and join the haulage or transport industry. This is not to devalue his current business, or the reputation he has in it. But we cannot see how, on these facts, repute was ever likely to be established at the time of the public inquiries.[14]This finding effectively disposes of the appeal, but we were not without some minor concerns at some aspects of the way in which the public inquiry was conducted. These concerns, however, go nowhere near undermining our principle findings, and do not vitiate the Deputy Traffic Commissioner’s final decision.[15]The skeleton argument before us correctly states that there is no requirement to demonstrate how much a Transport Manager will be paid. Indeed, there is no requirement that a Transport Manager be paid at all. But there is a requirement to demonstrate that the arrangement, whatever it might be, is a genuine one and is likely to be effective. S.58 of the 1995 Act defines a Transport Manager, in relation to a business, as an individual who is in, or who is engaged to enter into, the employment of the holder of a standard licence and who, either alone or jointly with one or more persons, has continuous and effective responsibility for the management of the transport operations of the business in so far as they relate to the carriage of goods. Given this requirement, we well understand the Deputy Traffic Commissioner’s incredulity at the answers he was given in relation to Mr Lyons. However, Mr Lyons had not been called up, even though (by the time of the second public inquiry) his nomination was known. Although professional competence was in issue, the assertion by the Deputy Traffic Commissioner that Mr Lyons was specifically expected to be present was incorrect and, had the Deputy Traffic Commissioner felt that Mr Lyon’s attendance was necessary before he could assess the genuineness and likely effectiveness of the proposed arrangement, he should have offered an adjournment.[16]We also agreed that, as suggested in the skeleton argument, the Deputy Traffic Commissioner sprang the bankruptcy issue on Mr Wood and, regrettably, did not put to him that he had failed to disclose it in his Application Form, and did not ask him for an explanation. Had he wished to rely on the bankruptcy and the non-disclosure, these matters should have been raised in the call-up letter and, if they had subsequently emerged, fairness demands that Mr Wood should have been given a proper opportunity to address them.[17]The final point raised in the skeleton argument argues that the passage of time from submitting the original Application Form to the rehearing was a breach of natural justice. The application was received at the end of February 2009. The Traffic Commissioner opened a public inquiry on 15 June 2009. The Appellant’s representative asked the Traffic Commissioner to defer her decision until prison records could be produced. These were eventually submitted at the end of July 2009 (nearly 200 pages of material) and were considered by the Traffic Commissioner upon her return from annual leave. The 10 page decision was issued by the Traffic Commissioner about a month later, on 4 September 2009. The hearing before the Upper Tribunal took place on 13 November 2009 and that decision was signed by Judge Burton on14 December 2009. A fresh call-up letter was issued on 4 March 2010, and the public inquiry before the Deputy Traffic Commissioner took place on 12 May 2010. We see no breach of natural justice, although we do consider that the facts and surrounding circumstances relating to the Conspiracy to Supply Class B Drugs were so manifestly serious that very little was gained by the adjournments, remittals and delays. This case could easily have been determined at the first public inquiry, and in a relatively short time.[18]In all the circumstances we find that the Deputy Traffic Commissioner’s ultimate findings in relation to repute and financial standing properly reflected the evidence before him, and should not be disturbed. Mr Wood, clearly, has not established repute in relation to his proposed role as a Transport Manager, but the position of Mr Lyons had not been properly considered and so, if this had been the only issue, we would have sent the matter back for further evidence. However, as is apparent, the key issue in this case relates to Mr Wood’s conviction and sentence, the surrounding relevant facts and circumstances, and the inevitable impact they have upon his repute, even after several years have passed since his conviction and sentence.[19]The appeal is dismissed. Judge Mark Hinchliffe, DCP 5 October 2010

Cited in 4 later judgments