Neutral Citation Number: [2013] UKUT 0193 (AAC)                            Appeal No: T/2013/01

IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
(TRAFFIC COMMISSIONER APPEALS)

ON APPEAL FROM THE DECISION OF N JONES, 
TRAFFIC COMMISSIONER for the WEST MIDLANDS TRAFFIC AREA, 
DATED 6 DECEMBER 2012

Before:
Judge M Hinchliffe, Deputy Chamber President (HESC); Judge of the Upper Tribunal.
Mr L Milliken, Member of the Upper Tribunal.
Mr M Farmer, Member of the Upper Tribunal.

Appellant:
SANDWELL TRAVELTD

Attendance:
For the Appellant: 	Mr T Nesbitt, Counsel instructed by Oliver Legal, Solicitors

Appeal heard at: 	Victory House, Kingsway, London
Date of hearing: 	27 March 2013
Date of decision: 	23 April 2013

DECISION OF THE UPPER TRIBUNAL:

IT IS HEREBY ORDERED that the appeal be allowed. All of the Traffic Commissioner’s orders and directions are set aside. We substitute our own decision. We order the appellant to pay a penalty of £500 per authorised vehicle, namely £2,500 in total. The penalty is payable to the Secretary of State and we direct that it be paid within 28 days of the date of this decision.

We direct the tribunal secretariat to give notice in writing to the Secretary of State as to the terms of this penalty.

Subject matter:	
Cogent evidential basis needed for findings of fact. Bus reliability. Adherence to timetable.

Cases referred to:
None

REASONS FOR DECISIONS:

1)	This was an appeal from the decision of the Traffic Commissioner for the West Midland Traffic Area made on 6 December 2012. By this decision the Traffic Commissioner varied a condition limiting the maximum number of vehicles that may be used under the licence at any one time, by reducing the number from 5 vehicles to 3 vehicles (s. 17(2)(d)). The grounds for this decision were breach of undertaking – namely a failure to make proper arrangements so that the laws relating to the driving and operation of vehicles used under the licence would be observed. The Traffic Commissioner also cancelled all of the operator’s registered services that used Bradford Place, Walsall. He also imposed a condition on the licence prohibiting the operator from using Bradford Place, Walsall for a period of three years. He took this action under section 26 of the Transport Act 1985 on the basis of poor reliability (ss. 26(1)(a) and (b)) and intentionally interfering with the operation of a local service provided by another operator (s.26(10(d)(i)).

2)	The call-up letter also raised the possibility of action under s.6 Transport Act 1985 (imposition of a financial penalty for poor bus reliability) but the Traffic Commissioner did not impose any such penalty.

3)	The  factual background to this appeal appears from the documents, the transcript and the Traffic Commissioner’s decision and is as follows:
(i)	The appellant is the holder of a standard national public service vehicle operator’s licence which authorises the use of five vehicles.
(ii)	In July 2011 a rival operator complained to the Traffic Commissioner that the appellant was:
(a) blocking departure stands at Bradford Place in order to prevent the rival operator from using them,
(b) failing to comply with registered timetables,
(c) running vehicles immediately in front of the rival operators buses,
(d) failing to operate scheduled services,
(e) operating unscheduled services, and actually operating one route within the 56 day period of notice that must be given before operating a new registered service.
(iii)	It took some time for these complaints to come to the attention of the Traffic Commissioner, but once he became aware, he arranged a meeting between the two operators. During the meeting the appellant denied that the complaints had any substance and made counter allegations. Consequently, since there was no meeting of minds, the Traffic Commissioner decided to hold a public inquiry.
(iv)	Walsall Metropolitan Borough Council is responsible for part of the public highway in Walsall known as Bradford Place, which is not technically a bus station but which is known as a bus station locally. Some time earlier, the Council had asked the Traffic Commissioner to impose Traffic Regulation Conditions at Bradford Place, which he did. As a consequence, buses are not allowed to stay on stand for more than three minutes and there must be a five-minute gap between services using Bradford Place.
(v)	In relation to the appellant’s reliability and adherence to timetable, the Traffic Commissioner received evidence of a significant number of the appellant’s buses running early: well in excess of the one minute window of tolerance provided in guidance issued by the Senior Traffic Commissioner. It also emerged that some routes were not run at all. The level of failures ran at around 27%.
(vi)	So far as ‘intentionally interfering with the operation of a local service provided by another operator’ was concerned, the Traffic Commissioner received some second-hand evidence from a Mr Hidson to the effect that he had received calls from an unnamed driver who said that the appellant’s buses had been running five minutes in front of the rival operator’s services - but it was clear that Mr Hidson did not personally see the appellant’s buses interfering with the operation of local services provided by another operator - he merely reported what he had been told at the time by a driver.
(vii)	No direct evidence from the original complainant company was presented, and appellant’s counter allegations against the complainant company were withdrawn.
(viii)	The Traffic Commissioner heard evidence from the appellant’s Operations Manager who spoke of improvements being made to timetable compliance, including the use of atomic clocks in every vehicle, and a tracking system for the buses. A director of the appellant company also gave evidence in relation to action taken against drivers who were not sticking to timetable, although proof of this was not forthcoming.
(ix)	The Traffic Commissioner concluded that the appellant either encouraged or condoned bad driver behaviour including running early, failing to run some services, not running services to timetable, stand blocking and deliberately running buses in front of the rival operator’s services, in order to take passengers from them. The Traffic Commissioner went on to refer to dangerous driver behaviour, dangerous practices, causing economic harm to a rival operator, and putting the public at risk. He criticised the failure of the appellant to address problems in a timely manner.
(x)	The Traffic Commissioner considered whether to impose a financial penalty but decided that, since his other decisions were likely to render the appellant less profitable, at least in the short to medium term, it would be inappropriate to also impose a financial penalty as there were other, more focused alternative steps he could take that would better achieve the statutory purpose. The Traffic Commissioner considered that, as a priority, he should stop the appellant from using Bradford Place for any of its services which, he said, would make Bradford Place a safer place and would also demonstrate to local operators that if they did not comply with the Traffic Regulation Conditions imposed, and adhere to registered timetables when using Bradford Place, then they would be prevented from operating local services there.

4)	At the hearing of this appeal, the Appellants were represented by Mr T Nesbitt who submitted a skeleton argument for which we were grateful.  Mr Nesbitt’s essential point was that although the appellant recognised and accepted that there had been failures to run to timetable which might have warranted some form of regulatory action, there was no direct or reliable evidence placed before the Traffic Commissioner at the public inquiry of stand blocking, dangerous driving, or of condoning or encouraging these or other impugned behaviours. 

5)	We have considered the transcript of the public inquiry with care. In terms of evidence, the public inquiry began with a Mr Perry, a representative from the West Midlands Integrated Transport Authority, who give evidence about the problems at Bradford Place generally, without giving any direct evidence about the appellant’s activities.

6)	Then, a Mr Morison, who had been monitoring bus services, suggested that the appellant’s drivers had altered their behaviour and stopped early departures when they became aware that Mr Morison was making observations. But there was nothing in his evidence about stand blocking, deliberately running buses immediately before a rival operator’s services, or of dangerous driving.

7)	As we have previously mentioned, Mr Hidson gave evidence of reports from an unnamed driver that one of the appellant’s buses operated a route prior to the registration coming into effect, and that the appellant’s buses had been seen running five minutes in front of the rival operators services - but he also confirmed that he did not have direct evidence about this and, again, there was no evidence of stand blocking, deliberately running buses immediately before a rival operator’s scheduled services, or of dangerous driving.

8)	Next, Mr Tonks of Bus Users UK gave evidence as to reliability and his evidence was consistent with an overall rate of irregularity of 27% on a sample of 111 observed services. There was no evidence from Mr Tonks of any stand blocking, deliberately running buses immediately before a rival operator’s services, or of dangerous driving.

9)	Next, VOSA witnesses gave evidence, but they did not give any testimony relevant to the challenged findings by the Traffic Commissioner.

10)	Thereafter evidence was led on behalf of the appellant – the witnesses called denied any allegations of stand blocking, deliberately running buses immediately before a rival operator’s services, or of dangerous driving.

11)	We conclude that there is merit to this submission. Having examined the transcript and the Traffic Commissioner’s decision, we cannot discern a cogent and reliable evidential basis for the Traffic Commissioner finding conduct amounting to stand blocking, deliberately running buses ahead of, or immediately before, a rival operator’s scheduled services in order to interfere with the operation of such services, or of dangerous driving or conduct. We do not know if the Traffic Commissioner took into account matters alleged (and denied) at the meeting held some time prior to the public inquiry but, if he did, he should not have done so without causing that evidence to be raised at the public inquiry so that it could be challenged and tested. There is, in any event, no reference to the Traffic Commissioner having relied upon these matters in his written decision.

12)	The evidence at the public inquiry did not even support a concrete finding of breach of the Traffic Regulation Conditions relating to the appellant’s buses standing for more than three minutes or the requirement for a five-minute gap between services using Bradford Place.

13)	It follows that the Traffic Commissioner’s subsidiary conclusion that the appellant turned a blind eye to (or knowingly encouraged or condoned) such behaviour also lacks a solid and reliable evidential foundation. 

14)	Mr Nesbitt further contended that the Traffic Commissioner had failed to carry out a balancing exercise that gave proper consideration to the steps that, it was said, the appellant had taken to try and improve timetable compliance, such as the introduction of atomic clocks and tracking devices. We find merit in this submission to the extent that the Traffic Commissioner focussed his decision on findings of deliberate bad practices - so that the Traffic Commissioner may well have attached very little weight to these routine administrative steps which are designed to reduce unintentional unreliability. Having said that, the level of unreliability established was, clearly, very significant, and may well have contributed to a perception by others of underhand commercial practices. 

15)	In our view, in the absence of direct or reliable evidence of intentionally interfering with the operation of a local service provided by another operator, or of repeated breach of Traffic Regulation Conditions, this case might more appropriately have been dealt with as a straight-forward bus reliability case. Indeed, once the element of deliberate interference is stripped out, the Traffic Commissioner’s rationale for not considering a financial penalty falls away - as, in our view, does his principal basis for reducing the licence authorisation, or preventing this one operator from using Bradford Place.

16)	Had the matter proceeded on the basis of poor reliability in the region of a 27% failure rate, the Traffic Commissioner would have had every justification in imposing a financial penalty. Applying the relevant guidelines, Mr Nesbitt submitted that a figure between £400 and £550 per authorised vehicle would have been appropriate. Mr Nesbitt invited us to substitute our own judgment for that of the Traffic Commissioner and he accepted that we would be entitled to consider imposing a financial penalty within this band.

17)	A final submission related to the Traffic Commissioner’s view that the appellant only had sufficient financial standing for four vehicles, not five. Here, it appeared that the Traffic Commissioner had failed to take account of an overdraft facility, which is evidenced at page 165 of the bundle. When this overdraft allowance is taken into account, the finance available comfortably exceeded £24,500, which was sufficient for five vehicles. Again, we agree with this submission.

18)	In all the circumstances we allow the appeal and set aside all of the Traffic Commissioner’s orders and directions. 

19)	We are able to substitute our own decision based upon the evidence that was presented at public inquiry. We find failures in relation to local services such as to permit action under s.155 Transport Act 2000. We find no reasonable excuse. We think this operator had plenty of warning that services were not being operated properly, and we judge the evidence as to remedial action to be superficial, belated and untested. When the Traffic Commissioner asked for proof of disciplinary action against a driver, for example, it was not forthcoming. Instead of engaging in a tit-for-tat argument with a rival operator, the appellant company should have promptly focussed its energy on properly addressing the service unreliability, and in providing the best possible service to the local community. 

20)	We consider that the appellant should pay a penalty of £500 per authorised vehicle, namely £2,500 in total. The penalty is payable to the Secretary of State and we direct that it be paid within 28 days of the date of this decision.

21)	We direct the tribunal secretariat to give notice in writing to the Secretary of State as to the terms of this penalty.

22)	We would add that the tribunal would take a robust view of any operator found, on the basis of persuasive evidence presented and tested at public inquiry, to have breached Traffic Regulation Conditions imposed by the Traffic Commissioner, or to have intentionally interfered with the operation of local services provided by another operator, especially if such interference involved stand blocking, deliberately running buses immediately before a rival operator’s scheduled services, or of dangerous driving. In a bad case, or a case involving repeated transgressions, we could well envisage Traffic Commissioners considering revocation and disqualification.

Judge Mark Hinchliffe, DCP
23 April 2013,