F & M REFRIGERATED TRANSPORT Ltd [2012] UKUT 401 (AAC)

IN THE UPPER TRIBUNAL
ADMINISTRATIVE APPEALS CHAMBER
[2012] UKUT 401 (AAC)Venue TRAFFIC COMMISSIONER APPEALS, ON APPEAL from the DECISION of Simon Evans, Deputy Traffic Commissioner for the North Western Traffic Area
Between
F & M REFRIGERATED TRANSPORT Ltd
Date 11 June 2012
[1]This is an appeal from the decision of the Deputy Traffic Commissioner for the North Western Traffic Area to refuse the Appellant’s application for the return of an impounded vehicle.[2]The factual background to the appeal appears from the documents and the Traffic Commissioner’s decision letter and is as follows:-(i) On 17 November 2011 the Appellant applied to the Driver and Vehicle Agency, (“DVA”) in Northern Ireland, to renew its Road Freight Operator’s Licence.(ii) On 7 February 2012 the DVA wrote to the Appellant to inform it that the application to renew the licence had been refused, on the ground that the Appellant was not of good repute. The letter informed the Appellant that there was a right to have the decision reviewed and that to exercise that right the Appellant should inform the Department, within 14 days from the date of the letter, of the reasons for seeking a review. The letter also warned that it was an offence to use an unlicensed vehicle to carry goods for hire or reward.(iii) In a letter dated 17 February 2012 Mr O’Callaghan, a director of the Appellant company, gave notice to the DVA that the Appellant was appealing against the refusal of the application for renewal, (strictly seeking it was exercising its right to have the decision reviewed).(iv) On 29 February 2012 a member of staff at the DVA telephoned the Appellant to ask about his intentions concerning an appeal against the refusal of his licence. It is reported that the Appellant replied that he believed that he had already submitted an appeal but that he would confirm this in due course.(v) On 2 March 2012 it is said that the Appellant was again contacted by the DVA and asked about his intentions concerning an appeal. It is reported that he replied that he would get back in touch with the DVA in due course. The DVA reported to VOSA that no appeal had been received and that the Appellant had been made fully aware of the situation both in writing and verbally.(vi) On 27 March 2012 a Scania articulated goods vehicle, registration number RLZ 5395, (“the Scania”), was stopped at a Police assisted road check on the M6 at Lancaster Services (N). The driver said that he was employed by the Appellant and that he was carrying frozen food, belonging to Tesco, from Manchester to Belfast. No road freight operator’s licence was displayed. After a telephone call the driver informed VOSA that the licence number was L9905. An inquiry by another VOSA officer to the DVA in Belfast received the reply that no valid ‘Operator’s Licence’ was in force and no appeal had been lodged following the refusal to renew the licence. Approval was given by VOSA HQ to impound the vehicle. In addition the vehicle was given an immediate prohibition for a seriously underinflated tyre.(vii) On the same day Mr O’Callaghan wrote to the DVA, having had a conversation with a member of staff at the DVA in which he was informed that the letter of 17 February 2012 had not been received by the DVA. He went on:
“We were unaware of this until today when one of our vehicles was stopped by VOSA in the UK, as far as we were concerned our appeal was being processed”
. A copy of the letter of 17 February 2012 was attached. (viii) On 10 April 2012 the DVA wrote to the Appellant giving notification that the review of the refusal to renew the Appellant’s licence would take place on 25 April 2012. The Appellant was informed that it was in his interests to attend. (ix) On 12 April 2012 the Appellant applied for the return of the Scania on the ground that the user of the vehicle held an operator’s licence. The number of the licence was given and the Appellant went on to set out the chronology in relation to the application to renew the licence and the appeal against the refusal of the application, which we have set out above. The Appellant added:
“we were under the impression that we were covered until the appeals process had been exhausted” . (x) On 24 April 2012 VOSA were informed by the DVA that the refusal to renew the Appellant’s licence: “is currently under appeal” and that the outcome was expected to be known within the next week. VOSA were also informed that the Scania last held a valid road freight vehicle licence on 25 June 2010 and that it was not listed on the Appellant’s operator’s licence. (xi) On 1 May 2012 the Office of the Traffic Commissioner, (“OTC”), wrote to the Appellant to indicate that the Traffic Commissioner had decided to hold a hearing, on 9 May 2012, to consider the Appellant’s application for the return of the Scania. (xii) On the same day an officer of the DVA made a statement saying that he had, that day, checked the Department’s records and ascertained that the Appellant did not hold current Road Freight Operator’s Licence. He added that the previous licence had expired on 31 October 2011, that an application had been received for its renewal on 17 November 2011 but that this application had been refused and that that decision was currently under appeal. He also confirmed that the Scania was not licensed to carry goods for hire or reward. (xiii) The impounding hearing took place before the Deputy Traffic Commissioner on 9 May 2012. Mr O’Callaghan appeared on behalf of the Appellant and a Senior Vehicle Examiner, Mr Parish appeared on behalf of VOSA. (xiv) Mr Parish began by setting out VOSA’s case and the evidence in support of it, which we have summarised above. In answer to the Deputy Traffic Commissioner Mr Parish explained that the decision to impound the vehicle had been taken on the basis that it was a loaded goods vehicle, carrying goods, within the UK, on behalf of a third party and that the Vehicle Examiner had been told that renewal of the Appellant’s Road Freight Licence had been refused. He accepted that he was provided with information by other people who actually conducted the necessary checks. (xv) Mr Parish then agreed that his understanding of the position in Northern Ireland was the same as the Deputy Traffic Commissioner’s, namely that a licence remains in force, following an application to renew, until the application has been determined, (in this case on 7 February 2012) and that following a refusal to renew there is a right to apply for a review within 14 days. Mr Parish went on to agree that he had assumed that if no review was sought the refusal to renew took effect. (xvi) In answer to Mr O’Callaghan Mr Parish said that, at the time of the impounding, it appeared that the appeal process had expired, that there was no review and that the licence was no longer in existence. However he accepted that the Traffic Examiner at the scene had been told by the driver that a review was being sought. He added that he had asked for the review letter to be supplied to him but that the feeling, from the information that they had, was that there was nothing there. (xvii) Mr O’Callaghan then gave evidence. The Deputy Traffic Commissioner, having agreed to receive evidence of ownership at a later stage, then sought to clarify the grounds on which the application was made. Mr O’Callaghan maintained that the Appellant ‘held an operator’s licence’ and gave the number L9905 and asserted that it was in force. When the Deputy Traffic Commissioner sought to question the last point Mr O’Callaghan referred to s. 16(1)(a) of the Transport Act (Northern Ireland) 1967, (“the 1967 Act”), saying that the effect of the subsection was that the licence remained in force until the appeal/review was disposed of. He explained that he had been specifically told this by the panel which conducted the review on 25 April 2012 and that he had been told to write down the wording of s. 16. He went on to say that following the impounding on 27 March 2012 he had faxed a copy of his letter of 17 February to the DVA and that he had had a meeting with them on the following day during which the DVA agreed to hold a review of the refusal to renew the licence. (xviii) In answer to further questions from the Deputy Traffic Commissioner Mr O’Callaghan was unable to give the exact date on which the licence ran out saying that it was the end of October or the start of November. He agreed that notification that the licence was about the expire would have been sent about two months before the expiry date. Mr O’Callaghan explained that he was unable to apply for renewal before 17 November 2011 because of delay in receiving the criminal records check. (xix) The Deputy Traffic Commissioner then asked about the refusal of the application and the application for a review. Mr O’Callaghan said that following the refusal he had spoken to a Mr Rosbotham at the DVA and that he was aware that he had 14 days in which the request a review on behalf of the Appellant. He also accepted that Mr Rosbothom had telephoned to say that no application for a review had been received. He was unable to give a date for the conversation. Pressed by the Deputy Traffic Commissioner Mr O’Callaghan insisted that the letter was written on 17 February, though he added that he was not sure exactly when it was sent. He could give no explanation as to why the DVA had not received it, though he accepted that it was sent by ordinary post and not registered. He said that if the Appellant had not applied for a review the licence would have come to an end 14 days after the date of the refusal. He explained that he could not have obtained a Road Freight Vehicle Licence for the vehicle itself until the review of the refusal of his Road Freight Licence had been completed. (xx) The Deputy Traffic Commissioner returned to the question of requesting a review of the refusal of the application. In particular he asked why the telephone call from the DVA did not prompt some action. Mr O’Callaghan accepted that he ought to have sent or faxed another copy of the letter but speculated that he was probably out of the office at the time of the call. When pressed about the second call Mr O’Callaghan said that he thought that he had only been phoned once. The Deputy Traffic Commissioner suggested that, when the DVA did not receive an application for a review by 22 March 2012 “the licence had gone”
. Mr O’Callaghan replied:
“Technically, that would be right, but I wasn’t aware that they hadn’t received it on 22 March”
. At this point the Deputy Traffic Commissioner referred Mr O’Callaghan to a copy of the application for the return of an impounded vehicle. He went through the grounds and, as a result Mr O’Callaghan agreed that it would be appropriate to add a claim for return on the ground that the Appellant did not know that the vehicle was being used in contravention of s. 2 of the Goods Vehicles (Licensing of Operators) Act 1995, ["the 1995 Act"]. Mr O’Callaghan summarised his position on that ground by saying that he thought that the Appellant “was covered” but he accepted that they should have done more. (xxi) On 18 May 2012 the DVA notified the Appellant that the review panel had upheld the decision to refuse the renewal of the Appellant’s Road Freight Operator’s Licence. (xxii) The Deputy Traffic Commissioner gave a written decision dated 11 June 2012. He began by setting out the facts and the evidence given at the hearing, which we have summarised above. He was satisfied that the Appellant was the owner of the Scania and therefore entitled to seek its return. He concluded that the way in which the vehicle was being used required “an operator’s licence” and that at the time of the impounding the DVA had not received a copy of the application for a review of the refusal to renew the licence. He was critical of Mr O’Callaghan’s failure to take basic steps to ensure that the DVA did receive the letter and his failure to respond to their telephone calls asking about his intentions following the refusal to renew the licence. (xxiii) The Deputy Traffic Commissioner concluded that the claim under Regulation 10(4)(a), [now Regulation 4(3)(a) and 10(2)(a)], of the Goods Vehicles (Enforcement of Powers) Regulations 2001, as amended, (“the 2001 Regulations”), failed. The reason he gave was that:
“I am not satisfied that Mr O’Callaghan has established on behalf of F&M that at the time the vehicle was detained the person using the vehicle held a valid licence (whether or not authorizing the use of the vehicle)”
. The Deputy Traffic Commissioner went on to consider s. 16(1)(a) of the 1967 Act but concluded that the fact that no application for a review was received by the 15 th day after refusal of the application meant that the licence had been of no effect for some 5 weeks at the date of the impounding. (xxiv) The Deputy Traffic Commissioner then considered the added claim under Regulation 10(4)(c), [now Regulations 4(3)(c) and 10(2)(a)], of the 2001 Regulations. He took into account the fact that Mr O’Callaghan had been given two opportunities to rectify the position and chose not to take them. He also took into account that the vehicle had no Road Freight Vehicle Licence and that by using it the Appellant had exceeded its authorisation. In relation to knowledge he said this:
“I have no hesitation in concluding that he had actual knowledge of the absence of a licence: he was told twice”
. Having held that both grounds for return had failed the Deputy Traffic Commissioner refused the application. (xxv) On 10 July 2012 the Appellant appealed against that decision. The Notice of Appeal sets out two main grounds of appeal. The first consists of a challenge to the findings of fact made by the Deputy Traffic Commissioner when rejecting the Appellant’s claim on the two grounds that he considered. The second asserts that the Deputy Traffic Commissioner failed to consider the correct ground for claiming the return of the Scania.[3]At the hearing of the appeal the Appellant was represented by Mr James Backhouse, who developed the two main grounds of appeal in a skeleton argument, for which we are grateful. We are also grateful to him for providing other material, at short notice, [Section 48 of VOSA’s Operations Manual and The Goods Vehicles (Licensing of Operators) (Temporary Use in Great Britain) Regulations 1996, (“the 1996 Regulations”)].[4]We believe it will be helpful to begin by setting out some definitions because it seems to us that one of the problems with this case was a lack of clarity and precision in the use of a number of expressions. We begin with one of the most commonly used, namely ‘Operator’s Licence’. It is defined in s. 2 of the 1995 Act as “a licence issued under this Act” . The section goes on to provide that such a licence is, in the 1995 Act, “referred to as an ‘operator’s licence’” . In other words ‘operator’s licence’ means a licence issued by a Traffic Commissioner under the 1995 Act. Extending the meaning beyond such a licence, in the context of a hearing before a Traffic Commissioner, though understandable as a form of shorthand, is simply liable to mislead. The 1995 Act extends to Great Britain but not to Northern Ireland. The position in Northern Ireland is that ‘Road Freight Operator’s Licences’, (unhelpfully also known as ‘operator’s licences’), were issued by the Ministry, (in practice by the DVA) under s. 14 of the 1967 Act, (as from 1 July 2012 the Goods Vehicles (Licensing of Operators) Act (Northern Ireland) 2010) [the “2010 Act”], contains the power to grant such licences . Road freight operator’s licences appear to be the Northern Ireland equivalent of operator’s licences issued by Traffic Commissioners in Great Britain but they are not identical and we believe that it would be more helpful, for reasons which will become apparent, to retain their full name: road freight operator’s licences. In Great Britain an operator will be issued with the number of discs corresponding to the number of vehicles authorised by its operator’s licence, so that a disc can be displayed in each authorised vehicle. In Northern Ireland the position is different. A person who holds a road freight operator’s licence, could be be granted a ‘Road Freight Vehicle Licence’, (under s.17 of the 1967 Act), which then permitted the vehicle to be used to carry goods by road for hire or reward. As we understand the position road freight vehicle licences are issued to individual vehicles. Use of a vehicle in breach of s.17 of the 1967 Act is a criminal offence.[5]Changes made to the 2001 Regulations by the Good Vehicles (Enforcement of Powers) (Amendment) Regulations 2009 mean that the grounds for claiming the return of a vehicle are now set out in Regulation 4(3). Regulation 10, which deals with applications to Traffic Commissioners, simply provides in Regulation 10(2)(a) that the application must contain a statement of one or more of the grounds set out in Regulation 4(3). The first three grounds, Regulation 4(3)(a), (b) & (c) are identical to the grounds originally set out in the 2001 Regulations. Ground 4(3)(d) is new, but irrelevant to the present appeal.[6]Regulation 4(3)(a) provides that ‘this ground is made out’ if:
“at the time the vehicle was detained the person using the vehicle held a valid licence (whether or not authorising the use of the vehicle)” . “Licence” is defined in Regulation 2 of the 2001 Regulations as: “an operator’s licence (whether standard or restricted) as defined in section 2(1) of the 1995 Act”
. We can understand why the Appellant applied under this ground because the 1967 Act uses the abbreviation ‘operator’s licence’ but we are quite satisfied that the claim under this head was bound to fail because, if the Appellant held a valid licence, it was a road freight operator’s licence not an operator’s licence issued under s. 2 of the 1995 Act.[7]Mr Backhouse assisted us on one point, which had puzzled us, namely the inclusion of the words, in Regulation 4(3)(a):
“ whether or not authorising the use of the vehicle”
. He submitted that the mischief at which impounding is directed is the use of vehicles in contravention of s. 2 of 1995 Act. Use in contravention of s. 2 means, that operators are outside the jurisdiction of Traffic Commissioners and therefore not subject to the regulatory powers given to Traffic Commissioners. This may be because an operator choses to operate without a licence, it can occur when operators continue to operate after their licence has been revoked or it can occur because they exceed what is permitted by the various exemptions to s. 2 of the 1995 Act. With this in mind it seems to us that there is no need to use the sanction of impounding in the case of an operator who uses a vehicle in excess of the number authorised by it’s operator’s licence. In such a case the Traffic Commissioner can deal with the matter at a disciplinary hearing.[8]In the course of the hearing the Deputy Traffic Commissioner invited the Appellant to add a second ground to the claim for return, namely the ground set out in what is now Regulation 4(3)(c), that:
“although at the time the vehicle was detained it was being used in contravention of section 2 of the 1995 Act, the owner did not know that it was being or had been so used”
. The Deputy Traffic Commissioner rejected that ground saying:
“I have no hesitation in concluding that he had actual knowledge of the absence of a licence: he was told twice”
. In our view this must be a reference to the two telephone calls summarised at paragraph 2(iv) & (v) above, in other words it was based on hearsay evidence. We accept, of course, that hearsay evidence is admissible before Traffic Commissioners but there are difficulties in assessing it and dangers in coming to conclusions based on it. Hearsay is difficult to assess for obvious reasons. It is impossible to take into account the demeanour of the person giving the primary account because they are not present. It is impossible to clarify matters or to seek further information because the person giving the primary account cannot be asked any questions. The danger of coming to conclusions on the basis of hearsay evidence is clearly demonstrated in the present case. The Deputy Traffic Commissioner found that Mr O’Callaghan had been told twice that the Appellant had no licence but this is not what the report of the conversation says. It seems to us that the Deputy Traffic Commissioner either assumed that this must have been said or assumed that this is the conclusion that Mr O’Callaghan ought to have reached. In our view the conclusion reached by the Deputy Traffic Commissioner is unsound, unsupported by the evidence and cannot stand. It seems to us that it is impossible to read more into the reported conversations than that the DVA were saying:
‘are you going to apply for a review because we have not had an application’, and Mr O’
Callaghan was replying ‘Yes, I have sent you an application, I will look into it’. We accept that Mr O’Callaghan was at fault in that he did not deal with the matter as promptly as he should have done. However we also consider that VOSA was at fault in not calling the relevant witness or witnesses from Northern Ireland or, at the very least taking steps to ensure that the account put before the Deputy Traffic Commissioner was as full and reliable as possible. We say that because it seems to us that this evidence, while relevant on the issue of knowledge, was also relevant to the question of whether or not VOSA had the right to impound the vehicle, an issue on which the burden falls on them. The purpose of calling the witness or witnesses would have been to allow the terms of the conversation to be properly investigated or, at the very least, to present the matter in much greater detail. For example, it is not clear if any file note was made of these conversations. If file notes were made copies should have been put in evidence, (a) because they might have provided more detail, (b) because they would have rendered the account much more reliable. We have referred at the end of paragraph 2(v) to the DVA reporting to VOSA that no appeal had been received and that the Appellant had been made fully aware of the situation both in writing and verbally. It is not clear when or how this report was made. Nor do we know how it is said that the Appellant was made fully aware of the situation both verbally or in writing. Does this refer to the two conversations already summarised, or to others, how was the Appellant told in writing and do we have the document(s)? The difficulty in assessing this evidence does not end there. VOSA were expressly told on 24 April 2012 that the refusal to renew the licence was ‘currently under appeal’, which we now know to be correct. However they were also told in a statement dated 1 May 2012 that the refusal “was not currently under appeal” . No attempt appears to have been made to resolve this discrepancy or, more importantly, to ascertain whether or not the licence was ‘kept alive’ by virtue of the fact that there was an outstanding appeal/review. We accept that VOSA may well have been misled, in some respects, by the terms of the statement dated 1 May 2012 but the clear contradiction, in that statement, of what had been said in the email required investigation and clarification. Had that been done it seems to us that the probability is that VOSA would have been told that the Appellant was still entitled to operate and had been entitled to do so throughout the period since the original licence came to an end.[9]Having reached the conclusion that the Appellant had actual knowledge of use in contravention of s. 2 of the 1995 Act the Deputy Traffic Commissioner did not go on to consider whether, in addition or in the alternative, the Appellant had imputed actual knowledge. Detailed consideration was given to the question of ‘knowledge’ in the case of Nolan Transport v VOSA and The Secretary of State for Transport, T/2011/60 . Reference was made at paragraph 114 of that decision to the five categories of knowledge, or ways in which a court or tribunal can conclude that knowledge has been acquired. In our view these categories are not necessarily mutually exclusive, in the sense that a finding of knowledge in one category means that the owner cannot be considered to have acquired knowledge in another category. It will all depend on the facts of the individual case. There may well be cases where some of the facts point to the owner shutting his eyes to the obvious, category (ii) while others indicate that the owner failed to make inquiries, category (iii), (we have abbreviated the requirements of each category for the sake of brevity not because we intend to dilute them). In such a case we urge that findings are made under each category that appears to be relevant.[10]The situation in the present case is that the Deputy Traffic Commissioner having found that the Appellant had actual knowledge did not go on to consider whether it also had imputed actual knowledge under categories (ii) and/or (iii). It seems to us that there were serious matters to be considered under both these heads. This is unfortunate because having not seen or heard the witnesses and having concerns about the quality and reliability of the hearsay evidence we are not in a position to make our own assessment of the evidence. But for the conclusion we have reached on Mr Backhouse’s second main submission we would have concluded that the only appropriate course would have been to remit the matter for rehearing. If our conclusions on the second main submission are found to be wrong then it seems to us that this is the only way to resolve the matter.[11]The second main submission advanced by Mr Backhouse was that the correct ground on which to claim the return of the vehicle was that set out in Regulation 4(3)(b) namely:
“that, at the time the vehicle was detained, the vehicle was not being, or had not been, used in contravention of section 2 of the 1995 Act”
. In order to understand this provision it is important to appreciate that while holding an operator’s licence issued by a Traffic Commissioner in Great Britain is the main way in which to avoid operating in contravention of s. 2 of the 1995 Act it is not the only way. There are a number of exemptions that enable an operator, established in Northern Ireland or in another Member State, to use a goods vehicle for hire or reward, in Great Britain, without contravening s. 2 of the 1995 Act. The exemption relied on by Mr Backhouse is to be found in Regulation 7(2) of the 1996 Regulations, which provides that:
“Section 2(1) of the Act shall not apply to the use in Great Britain of a Northern Ireland goods vehicle for the carriage of goods between places of loading or unloading in Great Britain or between one such place in Northern Ireland and another such place in Great Britain”
. The evidence is that the Scania was loaded in Great Britain and that the load was to be delivered to Northern Ireland. In other words the critical question is whether it qualifies as ‘a Northern Ireland goods vehicle’ . That expression is defined in Regulation 3(1) in these terms:- “’Northern Ireland goods vehicle’ means a goods vehicle of which the operating centre is in Northern Ireland and- (a) which has been brought temporarily into Great Britain; (b) which is not being used for international carriage by a haulier who is established in Northern Ireland and is not established in Great Britain; (c) which is engaged in carrying goods by road on a journey some part of which has taken place, or will take place, outside Great Britain’ and (d) which- (i) in the case of a motor vehicle, is registered in Northern Ireland or Great Britain; or (ii) in the case of a trailer, is drawn in Great Britain only by a motor vehicle which is a Northern Ireland goods vehicle” .[12]We propose to consider first the requirements of sub-paragraphs (a)-(d). We will then return to the question of whether or not the vehicle had an operating centre in Northern Ireland. The evidence of the driver of the Scania was that he had come over on the Larne to Cairnryan ferry the previous day and that he was returning to Northern Ireland when he was stopped. It follows, in our view, that(a) is satisfied because the vehicle had been brought, temporarily, into Great Britain. It was not being used for international carriage because the journey was between two parts of the same member state, (international carriage occurs where the journey starts in one member state and ends in another member state, see Article 2 of Regulation EC 1072/2009). It follows that(b) is satisfied. The final journey involved the carriage of goods. It began in Great Britain but was to end in Northern Ireland so(c) is satisfied. As to(d) a letter from VOSA, dated 28 March 2012, (page 21 in the appeal bundle), states that the vehicle is registered in Northern Ireland, so (d)(i) is satisfied. It follows that the requirements of (a)-(d) are all satisfied.[13]We now turn to the question of whether the Scania was:
“ a goods vehicle of which the operating centre is in Northern Ireland”
. There is no definition of ‘operating centre’ in the 1996 Regulations. There is, of course, a definition of ‘operating centre’ in s. 7(3) of the 1995 Act, but it is confined to the use of that expression in the 1995 Act. By contrast we have not found any definition of ‘operating centre’ in the 1967 Act, however that omission is rectified by s. 6 of the 2010 Act, which came into force on 1 July 2012, i.e. too late to apply to this case. In the absence of any statutory definition we take the view that for the purposes of the 1996 Regulation ‘operating centre’ means the place from which the vehicle operates or the place at which it is usually kept when not in use. In other words it is not implicit in the use of this expression in the 1996 Regulations that a place can only be an ‘operating centre’ if the person operating vehicles from it or keeping vehicles at it holds a road freight operator’s licence.[14]In case we have overlooked a definition of ‘operating centre’ in the Northern Ireland legislation we propose to consider whether or not the Deputy Traffic Commissioner was correct to conclude that the fact that no application for a review was received by the 15 th day after refusal of the application meant that the licence had been of no effect for some 5 weeks by the date of the impounding. We can understand how he came to that conclusion, given the terms of s. 16 of the 1967 Act. The relevant part of s. 16 of the 1967 Act is 16(1A), which provides that:- “If on the date of the expiration of an operator’s licence an application is before the Department for the grant of a new operator’s licence in substitution for an existing operator’s licence held by the applicant, the existing operator’s licence shall continue in force until the application is disposed of” . It seems likely that the application for renewal was a few days late because of delay in relation to the criminal records check. It does not appear that the DVA took any point on this and the Appellant clearly assumed that the licence continued in force until the contrary was made clear. In our view the Deputy Traffic Commissioner was correct to ignore the position at this stage and to concentrate on what took place later.[15]Unfortunately the Deputy Traffic Commissioner then focussed exclusively on the question of whether the application had been disposed of because the application for a review was not received by the DVA within the 14 day time limit. The problem with this approach, as we see it, is that it fails to take into account or to provide an explanation for what happened later. On the day of the impounding Mr O’Callaghan spoke to Mr Rosbotham and faxed to him a copy of the application for a review, dated 17 February 2012. The following day Mr O’Callaghan says that he went to the DVA office. He was then informed that there was to be a review. At the hearing of the review, on 25 April 2012, Mr O’Callaghan said that he had specifically asked whether he was entitled to operate and was then told that he was and he was invited to write down the terms of s. 16 of the 1967 Act. It has never been suggested that this did not take place. In our view Mr O’Callaghan described something that actually happened. On 24 April 2012 the DVA emailed VOSA to inform them, amongst other things, that:
“this matter is currently under appeal”
. In our view this can only mean and can only have been understood by VOSA to mean that the DVA had agreed to have a review of the refusal to renew the Appellant’s licence. In other words there was evidence before the Deputy Traffic Commissioner that, at the date of the hearing, the Appellant was still entitled to operate. That should have prompted him, and indeed VOSA, to ask the question: “on what basis is the Appellant entitled to continue to operate”? In our view there are, in theory, two possibilities. The first is that, despite appearances, ‘the original licence continued in force’ under s. 16 of the 1967 Act. The second is that the application was disposed of, when no application for a review was received within the time limit, but that the licence was then ‘revived’ when the DVA agreed to hold a review. Mr Backhouse told us that his research into the 1967 Act had not revealed any method by which a licence could be ‘revived’. We have reached the same conclusion. In our view the only basis on which the Appellant could continue to operate lawfully was because the original licence continued in force. In our view the effect of the acceptance of the application for a review, albeit late in the day, was that the original licence continued in force, from the date when it expired up to the date when the review determined that the original decision should stand. While there may have been a time when it appeared that the licence had ceased to exist, because the application for renewal appeared to have been disposed of, the acceptance of the application for a renewal meant that appearances were deceptive.[16]It follows, in our judgment, that whichever approach is taken the result is that the claim for return should have been made under Regulation 4(3)(b) and that that claim succeeds. The Appeal is allowed and we order the immediate return of the Scania.[17]In some ways this case is a cautionary tale, which shows that even apparently simple and straightforward impounding cases can give rise to some of the most difficult decisions that Traffic Commissioners are called upon to make. In our view it is a case from which VOSA and others could well learn some important lessons. For example:-(i) Where the impounded vehicle is based outside Great Britain both VOSA and the owners would be well-advised to obtain legal advice, and, perhaps also representation, from someone with expertise in this field. The various exemptions to s. 2 of the 1995 Act are set out in different Regulations and some, (for example the provisions relied on here), depend on proof of a series of pre-conditions.(ii) In any impounding appeal raising a complex point or points VOSA should consider whether or not they need to be represented. We accept that there will be cases where, after consideration, a decision is taken that representation is not necessary, but there will be others where it will be in their interests and in the interests of justice. We believe that that would have been the answer in relation to this appeal.(iii) A party who puts forward hearsay evidence should take sensible steps to ensure that it presents a full, fair and reliable picture. We have used the expression ‘sensible steps’ because we recognise that the steps which the Traffic Commissioner can expect a party to take must be proportionate to the importance of the point which the evidence is put forward to prove. In the present case VOSA put forward hearsay evidence in the form of reports of two telephone conversations with Mr O’Callaghan. The evidence was considered by the Deputy Traffic Commissioner to be conclusive on the issue of knowledge. It was also important on the question of whether or not the licence continued in force. Given the nature of the calls the Deputy Traffic Commissioner should have been told whether or not a file note was made shortly after the call recording the substance of what was said. If such a note was made it should have been obtained and should have been put in evidence because such a note is more likely to provide a full and reliable account of the conversation than a person’s recollection weeks after the event. If no note was made the Deputy Traffic Commissioner should have been informed because he would then have been able to assess the reliability of the account on the basis that this was a recollection some time after the event of one of many calls. Ideally, given the importance of the evidence, the person taking the calls should have given evidence, or, at the very least should have made a statement, exhibiting any file note that he or she made at the time.(iv) One of the central issues in this case was the effect of s. 16 of the 1967 Act. In our view the Deputy Traffic Commissioner was entitled to receive and VOSA would have been well-advised to get, (given that they had to prove that they had the right to impound), evidence from an expert in this area of Northern Ireland law about the effect of s. 16 in the circumstances of this case. If we are right we doubt whether there would have been a hearing because it seems likely that VOSA would have been advised that they were obliged to return the Scania under Regulation 4(2) of the 2001 Regulations, and ground (3)(b).(v) Mr Backhouse provided us with a copy of Section 48 of VOSA’s Operations Manual, which is the section which sets out VOSA’s policy in relation to impounding and the steps which should be taken before a vehicle is impounded. In the event it was not necessary to consider whether or not the required steps had been taken in this case. However we believe that the importance of complying with the Operations Manual should not be underestimated by VOSA staff. One of the issues which the Tribunal had to decide in the case of Nolan Transport was the question of whether a requirement for impounding to be ‘proportional’ should be read into the impounding regime. In deciding that it was not necessary to do so one of the factors which the Tribunal took into account was the protection offered to a vehicle owner if VOSA’s policy was correctly followed, (see paragraph 263 of the Nolan decision where the various steps to be taken before deciding to impound are set out). The Tribunal explained in paragraph 265 of the Nolan decision that a failure to follow the policy set out in the Operations Manual may result in a challenge to VOSA’s right to detain. Persistent failure to do so, if clearly proved, may well result in the Tribunal being invited to reconsider the need for proportionality. It is in VOSA’s interests to be in a position to establish, if necessary, that the policy and the requirements of Section 48 of the Operations Manual have been followed. Michael BrodrickJudge of the Upper Tribunal, Principal Judge for Traffic Commissioner Appeals, President of the Transport Tribunal. 2 November 2012

Cited in 1 later judgment