Neutral Citation Number:	[2012] UKUT 344 (AAC)	Appeal No. T/2012/28

IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
TRAFFIC COMMISSIONER APPEALS

ON APPEAL FROM THE DECISION OF JOHN  BAKER, 
DEPUTY TRAFFIC COMMISSIONER 
for the SOUTH EASTERN AND METROPOLITAN TRAFFIC AREA 

Dated: 4 May 2012

Before:
Judge Alan Gamble, Judge of the Upper Tribunal
Leslie Milliken, Member of the Upper Tribunal
Patricia Steel, Member of the Upper  Tribunal

Appellant:	
SHAMROCK  (GB)  LTD

Attendances:     Mr T Nesbitt, Barrister, for the appellant

Heard at:	Victory House, 30-34 Kingsway, London, WC2B 6EX
Date of hearing:	3 September 2012
Date of decision:	2 October 2012

DECISION OF THE UPPER TRIBUNAL

The appeal is allowed.

The Deputy Traffic Commissioner’s decision of 4 May 2012 is set aside.

The case is remitted for redetermination by a different Traffic Commissioner or Deputy Traffic Commissioner after a fresh Public Inquiry.

The Traffic Commissioner is directed to produce to the appellant’s legal representative within twenty one days of the issue of this decision all documentation held by his Office relating to regulatory failures by J D Hart, t/a J H Rentals,  while he held a goods vehicle operator’s licence. 

The fresh Public Inquiry should not be convened until the above direction is carried out by the Traffic Commissioner.  

SUBJECT MATTER:-  	

Repute of Applicant
Sufficiency of reasons
Production of documents held by Traffic Commissioner’s Office.
CASES REFERRED TO:   None

REASONS FOR DECISION

1.	This is an appeal by Shamrock (GB) Limited, the Appellant Company, against the decision of the Deputy Traffic Commissioner for the South Eastern and Metropolitan Traffic Area dated 4 May 2012.  By that decision the Deputy Traffic Commissioner refused an application by the Appellant Company for a Standard International Licence and also revoked the Appellant Company’s interim licence with effect from 31 May 2012.  His decision was based on his conclusion that Mr P Sherlock, the sole director of the Appellant Company and its nominated Transport Manager had failed to satisfy him that he was of good repute under Section 13A(2)(b) of the Goods Vehicles (Licensing of Operators) Act 1995.  The Deputy Commissioner’s decision was taken after a Public Inquiry held on 24 April 2012.  

2.	The Appellant Company was represented before us by Mr T Nesbitt, Barrister.  Mr Nesbitt had represented them at the Public Inquiry.  Mr Sherlock  attended the hearing. 

3.	At the hearing before us Mr Nesbitt produced a revised Notice of Appeal.  In particular, that Notice included a new Ground of Appeal designated paragraph 2A which made the following submission in respect of the Deputy Traffic Commissioner’s decision: 

	“2A	Wrongly and in error of law drawing making findings against the repute of the Appellant on the basis of regulatory failings by another operator who he was found to have close clinks with, without the Appellant being given proper notice of those failings or the evidence relating to them”.

Mr Nesbitt invited us to admit that additional Ground of Appeal.  We agreed to do so. 

4.	The factual background to this appeal appearing from the material on file before us including the Deputy Traffic Commissioner’s decision and from Mr Nesbitt’s oral submissions is as follows:

	“(a)	The Appellant Company applied for a Standard International Licence for nine vehicles and nine trailers on 17 January 2012.  

	 (b)	Mr P Sherlock is the sole director and the nominated Transport Manager of the Appellant Company.  Mr Nesbitt accepted before us that Mr Sherlock is  “the main man” of that company.  He conceded in answers to questions from us that he was thus accepting that Mr P Sherlock was the alter ego of the company.  That admission by Mr Nesbitt amounted to a withdrawal of paragraph 3 of his Notice of Appeal which reads as follows:

		“3.	Wrongly and/or in error of law, in considering the application for a licence by the company, Shamrock (GB) Limited, solely addressing and determining the application by reference to whether Mr Sherlock could show he (personally) had repute rather than, as was the true question, considering the whether or not Shamrock (GB) Limited lacked repute.  

The Appellant will contend that the true question for the learned Deputy Traffic Commissioner was whether the corporate entity could show that it had repute, which question should have engaged wider issues such as the reliability and competence of other staff, including Mr William Evans who was advanced as an alternative Traffic Manager.”

	We were satisfied that it was entirely appropriate for that Ground of Appeal to have been withdrawn.  Had it been pursued we would have rejected it.
	
	(c)	An interim licence was granted to the Appellant Company for seven vehicles and seven trailers on 21 March 2012.  

	(d)	Mr Sherlock was formerly the Traffic Manager for another company, Sherduff International Limited.  That company’s operator’s licence was revoked by the Traffic Commissioner after a Public Inquiry held on 19 November 2010.  In that decision the Traffic Commissioner also found Mr Sherlock’s repute to be tarnished although not lost. 

	(e)	The Public Inquiry of 24 April 2012 which related to the Appellant Company took place concurrently with one relating to another operator, Mr J D Hart, trading as J H Rentals.   Mr P Sherlock was the nominated Transport Manager of that operator between 3 December 2011 and 5 January 2012 when he resigned from that position. 

	(f)	Mr Hart did not attend the Public Inquiry of 24 April 2012 nor was he represented at it.  Mr Sherlock attended and gave oral evidence.  Mr Nesbitt represented the Appellant Company at that Public Inquiry.

	(g)	It is not in dispute that there was a close business relationship between Mr Sherlock and Mr Hart.  That relationship involved Mr Sherlock’s supplying vehicles to Mr Hart in return for Mr Hart delivering freight for him in connection with his business as a freight forwarder.  No written contract between Mr Sherlock or Mr Hart or any other documentation of the arrangements between them was produced to the Deputy Traffic Commissioner.  We were told such documentation did not exist.
 
	(h)	The compliance record of Mr J D Hart as a goods vehicles operator is extremely poor.  It includes numerous prohibitions, offences and breaches of licence.  

5.	The key finding of the Deputy Traffic Commissioner is expressed in paragraph 15 of his decision where he puts matters thus:

“Drawing all the strands together I find that it is more likely than not that the businesses of Mr Sherlock and Mr Hart were so closely entwined that they were in effect one and the same.  I do not believe that an experienced business man such as Mr Sherlock would simply provide seven goods vehicles to another entity without having some formal contract or agreement drawn up”.

The above passage from the Deputy Traffic Commissioner’s decision answers the question which he had raised in paragraph 13 of his decision where he says:

	“What is not agreed and what I believe is key to my decision is the extent that Mr Sherlock was really involved in the James Hart licence.”

6.	Having reached the conclusion expressed in the opening sentences of paragraph 15 quoted above, the Deputy Traffic Commissioner went on to say in the remainder of that paragraph:
	
	“Having reached this conclusion it draws in to consideration the compliance record that is shown for the last two years in relation to the James Hart licence.  It is undeniable that this is extremely poor with numerous prohibitions, offences and breaches of licence recorded.  It is also pertinent to note that the types of breaches and general compliance record for James Hart were similar to those shown on the record for Sherduff International Limited and that at least two vehicles were transferred to the James Hart licence when the Sherduff licence was still current.”

Mr Nesbitt, using an apt biblical analogy, submitted that in expressing himself thus the Deputy Traffic Commissioner was “visiting the sins” of Mr Hart on Mr Sherlock.  The basis of that submission was that the final conclusion of the Deputy Traffic Commissioner (expressed in paragraph 17 of his decision) that Mr Sherlock had failed to satisfy him that he was of good repute rested on his determination that Mr Sherlock’s business and that of Mr Hart were, as he puts it, “in effect one and the same” and that therefore it was appropriate to attribute to Mr Sherlock the regulatory failures of Mr Hart.

7.	As he developed his oral argument, Mr Nesbitt presented two main submissions.  The first ran as follows.  He accepted that the Deputy Traffic Commissioner was the adjudicator of fact and as such the master of the facts.  He was entitled in law to draw the conclusion which he had, albeit that it was based as he himself put it “on circumstantial evidence”, on the degree of intertwining between the businesses of Mr Sherlock and Mr Hart.  Mr Nesbitt did not submit that the Deputy Traffic Commissioner’s conclusion to that effect was irrational nor that it lacked an evidential foundation.  Mr Nesbitt fully conceded that there were close connections between the two businesses.  Indeed he admitted that that close association stood on the borderline between a relationship of sub-contracting and something much closer.  However he submitted that that made it all the more important for the Deputy Traffic Commissioner to explain and justify his conclusion that the businesses of Mr Sherlock and Mr Hart “were so closely entwined that they were in effect one and the same”.  Mr Nesbitt submitted that the Deputy Traffic Commissioner could not justify that conclusion without demonstrating that he had reached it after an especially close and careful analysis of all the relevant evidence. He too argued that the Deputy Traffic Commissioner had failed to do so.  Thus the Deputy Traffic Commissioner had erred in law by stating insufficient reasons for his finding on the key question before him.  In particular, he had not dealt with evidence which pointed in a different direction from that of his eventual conclusion on the issue  of  the interlocking between the businesses of Mr Sherlock and Mr Hart.  He had not said what he made of such evidence.  He had not, for example, stated that he did not accept it or that he was not prepared to draw inferences from it contrary to the conclusion that the two businesses in question were effectively the same entity.   More generally, he had not dealt with strands of the evidence which tended to support the good repute of Mr Sherlock.  

8.	In support of the submission summarised in paragraph 7 above, Mr Nesbitt directed us to several strands in the oral evidence recorded in the transcript of the Public Inquiry.  On document 176 at letters G - H, Mr Sherlock is recorded as giving evidence in answer to Mr Nesbitt as follows:

“Q.	The next question:  Going forward from the moment that you let him have the use of them who was maintaining them?

	A.	James Hart.  He was also a fitter.

	Q.	So he was doing his own fitting?

	A.	Yes

	Q.	Did he also employ another mechanic as far as –

	A.	Yes, when needed, yes. 

	Q.	You did not get involved in the maintenance of those trucks –

	A.	No”

On document 186H, Mr Sherlock is recorded as giving further and more general evidence, this time in answer to the Deputy Traffic Commissioner, as follows:

	“Shamrock was a forwarding company.  We contracted the work to J H Rentals.  J H Rentals in turn was doing the work, looking after the maintenance on the lorries and the trailers and looking after the drivers’ wages and also the tachographs”.

Earlier in the transcript on document 154 at letter B, the Deputy Traffic Commissioner is recorded as asking Mr Sherlock:

	“Who was employing the drivers in this arrangement you had?”

Mr Sherlock is recorded as replying to that question, on document 154C, as follows:

	“James Hart was, Sir”

In connection with the evidence narrated above, Mr Nesbitt reminded us of the important indicia of a goods vehicle operator relating to the maintenance of vehicles and the employing of drivers.  He then stressed that the above evidence was of considerable materiality.  It tended to point in the direction of James Hart being the sole operator of the vehicles involved in the relevant period.

On the issue of repute more generally, Mr Nesbitt drew our attention to evidence recorded on document 170A where a Traffic Examiner is recorded as stating in answer to Mr Nesbitt the following evidence:

	“Mr Sherlock has always been helpful during that period as much as he could”

Then on document 170C Mr Nesbitt is recorded as having asked this question:

	“His evidence will be that over the period he was on the licence which, I think was around a month and which included the Christmas period which probably took everyone away from work for a while, he quickly realised that there were entrenched problems, in particular with the records, that he was not going to be able to put right and he did not want to be associated with this licence.  Is that your understanding of the sort of sequence of events?”

The Traffic Examiner is recorded as answering the above question:

	“Absolutely, yes.”

9.	Having regard to the oral evidence drawn to our attention by Mr Nesbitt and narrated in detail in paragraph 8 above, we agree with his submission summarised in paragraph 7 above that it was incumbent on the Deputy Traffic Commissioner to say what he made of that evidence when he expressed his conclusions on the interlocking between Mr Sherlock’s business and that of Mr Hart and also in respect of Mr Sherlock’s repute more generally.  In failing to say what he made of that evidence in his decision, the Deputy Traffic Commissioner erred in law 

10.	The second submission advanced by Mr Nesbitt was essentially one in support of his ground of appeal 2A, reproduced in paragraph 3 above.  This point related to fair procedure.  Mr Nesbitt submitted that as the representative of the Appellant Company at the Public Inquiry he had been ambushed by the lack of disclosure to him by the Deputy Traffic Commissioner of the details held by the Traffic Commissioner’s Office of Mr Hart’s regulatory failures.  Those failures, as the Deputy Traffic Commissioner makes clear in his decision, very largely formed the basis of his conclusion in respect of Mr Sherlock’s repute. 

11.	We agree with Mr Nesbitt’s submission summarised in paragraph 10 above.  No documentary details of the regulatory failures of Mr Hart were made available to the Appellant Company or to Mr Nesbitt as their legal representative in advance of the Public Inquiry.   Documents 154 – 159 of the transcript record a Traffic Examiner reading out a report which he had prepared in respect of the compliance record of Mr Hart.  On document 155B, Mr Nesbitt is recorded as stating to the Deputy Traffic Commissioner:

	“Sir, because I have not seen this evidence and it is going to be relevant against Mr Sherlock, could I write down the registration?”

The Traffic Examiner is then recorded as having repeated the registration number of the vehicle in question which was the subject of an overloading offence.

Then, on document 159, Mr Nesbitt is recorded as stating, in regard to information being supplied by a Traffic Examiner:

	“I still do not have this material”

The Deputy Traffic Commissioner is recorded as stating:

	“No, of course you do not”

The Deputy Traffic Commissioner then points Mr Nesbitt to the relevant parts of a document which recorded an interview by Mr Hart.  Eventually, on document 163, the Deputy Traffic Commissioner indicated to Mr Nesbitt that he could have a copy of a particular Prohibition Notice.  He is then recorded, at letter E of document 163,  offering Mr Nesbitt a recess of  “perhaps fifteen minutes or so to consider some of the matters presented in the evidence of the vehicle examiners.”   Mr Nesbitt submitted to us that that recess was inadequate.  Not only was it quite short but he was only given one Prohibition Notice to inspect not all the documentation relating to the regulatory failures of Mr Hart.  Mr Nesbitt candidly admitted that to a degree this was his own responsibility in that he had not made more of this issue with the Deputy Traffic Commissioner at the time, for example by seeking full production of all relevant documentation along with an adjournment to consider it.  He did not do so because he did not anticipate the degree of emphasis on Mr Hart’s failings which would appear in the Deputy Traffic Commissioner’s decision.  We accepted that candid admission from Mr Nesbitt.  We are satisfied, taking everything into account, that proper procedure necessitated production of full documentation of Mr Hart’s regulatory failures to Mr Nesbitt as the legal representative of the Appellant Company.   The failure on the part of the Deputy Traffic Commissioner to provide Mr Nesbitt with that material was an error of law on his part.  

12.	On the basis of the two errors of law made by the Deputy Traffic Commissioner identified in detail in preceding paragraphs we set his decision aside.   It is not appropriate for us to substitute our own decision.  Rather, we remit the case to a different Traffic Commissioner or Deputy Traffic Commissioner for decision after a freshly convened Public Inquiry.  At that Public Inquiry all matters will be at large and will fall to be decided afresh.  We direct the Traffic Commissioner to produce to the Appellant Company’s legal representative all documentation held by his Office relating to the regulatory failures of Mr J D Hart.  He should produce that material within twenty one days of the issue of this decision so that it is available for consideration before that Public Inquiry takes place.  Indeed that Public Inquiry should not take place until the above direction has been carried out. 

13.	The appeal is allowed.  We emphasise that we have made no decision on the merits of the Appellant Company’s  case in respect of repute.  That will be a matter for decision by the Traffic Commissioner or Deputy Traffic Commissioner who conducts the Public Inquiry.

					
	
	A J GAMBLE
	Judge of the Upper Tribunal
	Date: 2 October 2012