Arkle Finance Ltd: [2022] UKUT 329 (AAC) [2022] UKUT 00329 (AAC)

‘owner" means, in relation to a vehicle or trailer which has been detained in accordance with regulation 3-- (a) in the case of a vehicle which at the time of its detention was not hired from a vehicle-hire firm under a hiring agreement but was registered under the Vehicle Excise and Registration Act 1994, the person who can show to the satisfaction of an authorised person that he was at the time of its detention the lawful owner (whether or not he was the person in whose name it was so registered); (b) in the case of a vehicle or trailer which at the time of its detention was hired from a vehicle-hire firm under a hiring agreement, the vehicle-hire firm; or (c) in the case of any other vehicle or trailer, the person who can show to the satisfaction of an authorised person that he was at the time of its detention the lawful owner.’

‘Three points need to be stressed at this stage. First, it is for VOSA to show that they had reason to believe that the detained vehicle was being or had been used, on a road, in contravention of s.2 of the 1995 Act. The standard of proof required is the balance of probability … Second, once VOSA have established they had the right to detain a vehicle it is for the owner to prove ownership of the vehicle or vehicles to which the claim relates. Again, the standard of proof required is the balance of probability … Third, it is for the owner to show, on the balance of probability, that one of the grounds set out in regulation 10(4) of the 2001 Regulations, as amended, has been established.’

‘(3) The grounds are-- (a) that, 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); (b) that, at the time the vehicle was detained, the vehicle was not being, and had not been, used in contravention of section 1 of the 2010 Act; (c) that, although at the time the vehicle was detained it was being, or had been, used in contravention of section 1 of the 2010 Act, the owner did not know that it was being, or had been, so used; 7 (d) that, although knowing at the time the vehicle was detained that it was being, or had been, used in contravention of section 1 of the 2010 Act, the owner-- (i) had taken steps with a view to preventing that use; and (ii) has taken steps with a view to preventing any further such use.’

“actions speak louder than words”, (see paragraph 2(xxix) above). We agree that this is a helpful and appropriate approach. The attitude of an operator when something goes wrong can be very instructive. Some recognise the problem at once and take immediate and effective steps to put matters right. Others only recognise the problem when it is set out in a call-up letter and begin to put matters right in the period before the Public Inquiry takes place. A third group leave it even later and come to the Public Inquiry with promises of action in the future. A fourth group bury their heads in the sand and wait to be told what to do during the Public Inquiry. It will be for the Head of the TRU to assess the position on the facts of each individual case. However it seems clear that prompt and effective action is likely to be given greater weight than untested promises to put matters right in the future.’ The proper approach on appeal to the Upper Tribunal In NT/2013/52 & 53 Fergal Hughes v DOENI & Perry McKee Homes Ltd v DOENI [2013] UKUT 618 AAC, the Upper Tribunal said the following, at paragraph 8 of its decision, on the proper approach on appeal to the Upper Tribunal: ‘There is a right of appeal to the Upper Tribunal against decisions by the Head of the TRU in the circumstances set out in s. 35 of the 2010 Act. Leave to appeal is not required. At the hearing of an appeal the Tribunal is entitled to hear and determine matters of both fact and law. However it is important to remember that the appeal is not the equivalent of a Crown Court hearing an appeal against conviction from a Magistrates Court, where the case, effectively, begins all over again. Instead an appeal hearing will take the form of a review of the material placed before the Head of the TRU, together with a transcript of any public inquiry, which has taken place. For a detailed explanation of the role of the Tribunal when hearing this type of appeal see paragraphs 34-40 of the decision of the Court of Appeal (Civil Division) in Bradley Fold Travel Ltd & Peter Wright v Secretary of State for Transport [2010] EWCA Civ. 695. Two other points emerge from these paragraphs. First, the Appellant assumes the burden of showing that the decision under appeal is wrong. Second, in order to succeed the Appellant must show that: “the process of reasoning and the application of the relevant law require the Tribunal to adopt a different view”

‘It is apparent that many of the provisions of the 2010 Act and the Regulations made under that Act are in identical terms to provisions found in the Goods Vehicles (Licensing of Operators) Act 1995, (“the 1995 Act”), and in the Regulations made under that Act. The 1995 Act and the Regulations made under it, govern the operation of goods vehicles in Great Britain. The provisional conclusion which we draw, (because the point has not been argued), is that this was a deliberate choice on the part of the Northern Ireland Assembly to ensure that there is a common standard for the operation of goods vehicles throughout the United Kingdom. It follows that decisions on the meaning of a section in the 1995 Act or a paragraph in the Regulations, made under that Act, are highly relevant to the interpretation of an identical provision in the Northern Ireland legislation and vice versa.’

‘The Appellant seeks to Appeal the decision of the TRU that it has failed to establish ownership of the relevant vehicle being a Scania R500 6x2 Rear Lift Axle Tractor Unit, Registration MC61 AGX (“the vehicle”). The Appellant does not seek to proceed with its second ground of appeal.’

‘Ownership of Vehicle MC61AGX 10 The starting point of any application is consideration of ownership, as the vehicle can only be returned to those found to be the legal owner. In this instance the issue is initially muddied by the statement of Mr SL that he was the owner and user of the vehicle. I note however that no application has been received from Mr SL and it is asserted that Mr SL’s solicitor notified the applicant of the detention, although no evidence has been provided for this. The evidence provided in support of ownership includes a Hire Agreement, signed 25 May 2017, between Arkle Finance Limited and Mr SL "the Hirer". The Hirer's Declaration on page 2 of the agreement (point 3) reads "The equipment shall remain the property of Arkle Finance Limited at all times and at no point shall title pass to you". This is repeated at point 3.1 of the Terms of Hire Agreement. In my letter dated 15 February, I sought additional information from the applicant to support claim of ownership of the vehicle: … The applicant's solicitor responded on 28 February 2022 as follows: … In addition I was provided with a copy of the referenced invoice, dated 24 May 2017, from A&M Commercials Ltd to Arkle Finance Ltd. No further skeleton was provided. Of particular interest is the following notice which is included at the start of the final statement at the bottom of that invoice: All goods remain the property of A&M Commercials until goods have been paid for in full. In considering ownership I remind myself that the standard required is for me to be satisfied on the balance of probabilities that the applicant is the owner, but the burden lies with the applicant to so satisfy me. The majority of the response at paragraph 21 above misses this point and seems set in satisfying me that Mr SL is not the owner. This is not the required test. Beyond that there is then a reliance on the hire agreement and an invoice which carries the caveat that the goods belong to the supplier (A&M Commercials) until such time as they are fully paid. I am in receipt of no evidence that the goods are fully paid for and note the single day between the invoice and the hire agreement being signed. I must question why, if the vehicle was purchased, definitive supporting material - such as bank statements, evidence of financial transactions - has not been forthcoming. The absence of this material raises doubt conflated by the introduction of other possible owners in A&M Commercials Limited. I add here that there is a distinction between primary facts and other findings of fact. The Upper Tribunal decision T/2016/26 J Campbell t/a Vision Travel, at 41 includes the following extract from Clarke LJ in 11 Assicurzioni Generali SpA v. Arab Insurance Group [2002] EWCA Civ 1642, [2003] 1 WLR 577: "16. some conclusions of fact ore ... not conclusions of primary fact. .. They involve an assessment of a number of different factors which have to be weighed against each other. This is sometimes called an evaluation of the facts and is often a matter of degree upon which different judges can legitimately differ. Such cases may be closely analogous to the exercise of a discretion and, in my opinion, appellate courts should approach them in a similar way." The onus is on the applicant to satisfy me on the balance of probabilities that it is the owner of the detained vehicle, it has failed to do so. The application to return the detained vehicle must fail on the basis of the failure to satisfy me as to ownership. However, for completeness I also consider it fair to make findings on the additional factors considered at the hearing.’

‘Ownership: Facts The Appellant purchased the vehicle from A&M Commercials Ltd (“the supplier”) on 24th May 2017 for the purpose of entering into a hire Agreement with Mr SL (“the hirer”). Regarding purchase from the supplier, the purchase invoice appears at page 54 of the Hearing Bundle. The Appellant also refers to additional documentation provided to the Tribunal including its bank records illustrating proof of payment (page 162), together with a letter from the supplier dated 20th April 2022 confirming that the supplier received payment of £56,400 and that title to the vehicle thereafter passed to the Appellant (page 158). Woodbrook Financial Services Limited were engaged as Financial Intermediary in the hiring of the vehicle (in common parlance, “the broker”) (see the Hire Agreement at page 17 and, further, the additional documentation provided to the Tribunal at pages 146-148). The Hire Agreement (“the Agreement”) appears at page 17 of the Hearing Bundle. The supplier’s details are noted (page 17). The Agreement is signed by the hirer, Mr SL, and on behalf of the Appellant (page 18). The Hire Agreement was divided into primary and secondary hire periods. An initial rental was payable at £6000.00 gross, followed by the primary hire period of 60 months at £1179.47 gross per month. A secondary hire period was available - in the event that there was no termination of the Agreement during the primary hire period - at £1179.47 gross per month, terminable with three months’ notice. The “Hirer’s Declaration” at Clause 3 confirms that “The Equipment shall remain the property of Arkle Finance Limited at all times and at no point shall title pass to you” (page 18). The Terms of Hire (page 19) further state at Clause 3.1 that “The Equipment will at all times remain our property and at no time will title to the Equipment pass to you.” 12 Clause 2.1 requires the rentals to be paid (page 19). Clause 6.1 entitles the Appellant to terminate the hire under the Agreement if, inter alia, the hirer failed to pay any rental within 7 days of its due date (page 19). The hirer fell into arrears during the primary hire period (see the Statement of Account appearing in the additional documentation provided to the Tribunal at page 163). The Appellant then terminated the Agreement by notice dated 10th July 2019 (pages 151-152). Regarding proof of ownership, the Appellant also refers to correspondence from the hirer’s solicitor within the additional documentation provided to the Tribunal dated 3rd February 2022 (page 150) and 7th February 2022 (page 159) confirming that title to the vehicle lay with the Appellant. The Appellant also refers to the Hearing Bundle at page 9 wherein the hirer made an application for return of the vehicle’s contents, rather than return of the vehicle itself. … It is respectfully submitted that the decision of the TRU dated 16th March 2022 regarding ownership was ‘plainly wrong’

“If the evidence is such that the tribunal can say ‘we think it more probable than not’ then the burden is discharged, but if the probabilities are equal it is not” (at 374). It is respectfully submitted that, on all of the information placed before the TRU, the decision-maker ought to have determined that it was “more probable than not” that the Appellant was the owner of the vehicle. In this regard, there simply was not any other entity or individual with a viable claim of ownership or, at the very least, a more viable claim of ownership than the Appellant. 13 It would appear that the decision-maker applied an erroneous test, namely that he was required to be “satisfied” as to the Appellant’s ownership, rather than merely satisfied “on the balance of probabilities” as to the Appellant’s ownership. The distinction is subtle but, it is respectfully submitted, important. In addition, the Tribunal now benefits from additional materials provided by the Appellant, as referred to in the “Facts” section above (paragraphs 2-7). It is submitted that, on the basis of all of the evidence now before the Tribunal, and on the basis of the “Facts” section above, the Appellant has demonstrated that it is and was at all material times the owner of the vehicle. The finding that the Appellant was not the owner was ‘plainly wrong’. Applying both limbs of Hughes, it is respectfully submitted that the evidence presented to the Tribunal makes clear that the decision of the TRU was “wrong” and the Tribunal is “required to adopt a different view”