Neutral Citation Number: [2013] UKUT 0398 (AAC)                        Appeal No.  T/2013/26

IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
TRAFFIC COMMISSIONER APPEALS

ON APPEAL from the DECISION of
Nick Denton, Traffic Commissioner for the 
South Eastern and Metropolitan Traffic Area dated 18 March 2013

Before:
Her Honour Judge J Beech, Judge of the Upper Tribunal
Leslie Milliken, Member of the Upper Tribunal
George Inch, Member of the Upper Tribunal

Appellant:

VINCE LARKIN LIMITED

Attendances:
For the Appellant: Tim Nesbitt instructed by Stephensons Solicitors.  

Heard at: Field House, 15-25 Bream’s Buildings, London, EC4A 1DZ
Date of hearing: 29 July 2013
Date of decision:   12 August 2013

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that this appeal be DISMISSED and the order of revocation is to take effect from 23.59 on 9 September 2013.

SUBJECT MATTER:-  Restricted licence; maintenance; proportionality of order of revocation

CASES REFERRED TO:-  T/2009/225 Priority Freight; 217/2002 Bryan Haulage No.2; T/2013/07 Redsky Wholesalers Limited; R (Daly) v Secretary of State for the Home Department (2001) 2 AC 532; Bank Mellat v HM Treasury (2013) UKSC 39; Bradley Fold Travel Ltd and Peter Wright v Secretary of State for Transport (2010) EWCA Civ 695.

REASONS FOR DECISION

1.	This was an appeal from the decision of the Traffic Commissioner for the South Eastern and Metropolitan Traffic Area made on 18 March 2013 when he revoked the Appellant’s restricted operator’s licence under s.26(1) of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”).  
 
2.	The factual background appears from the documents and the Traffic Commissioner’s written decision and is as follows:

(i)	The Appellant (which trades as “Olympic Scaffolding”) has held a restricted operators’ licence since 2006.  The licence authorised four vehicles with three specified and a fourth being operated without being specified. The sole director of the company is Vince Larkin.  
(ii)	In June 2007, a maintenance investigation was marked as “unsatisfactory” as a result of: PMI records being incorrectly or not fully completed; reported defects not being shown as rectified; the driver defect report system was not fully used; prohibitions had been issued and the MOT history was poor.  As a result of a letter from the Appellant explaining the reasons for its maintenance shortcomings and giving assurances as to the future, a formal warning letter was issued by the Office of the Traffic Commissioner (“OTC”).  
(iii)	On 16 December 2008, the Appellant was called to a public inquiry as a result of a further maintenance investigation which was marked as “unsatisfactory” as a result of: PMI records being incorrectly or not fully completed; some PMI records were missing; the driver defect reporting system was not being used effectively; the MOT failure rate was high and the forward planner did not project six months into the future.  The result of the public inquiry was that the Appellant’s licence was suspended for four days and its vehicle authorisation was increased by one vehicle.  
(iv)	On 10 January 2013, the Appellant was called to a second public inquiry as a result of a third maintenance investigation being marked as “unsatisfactory” as a result of: a poor MOT pass rate; insufficient PMI records; the absence of a forward planner; insufficient driver daily defect reports; the use of a maintenance contractor who had not been specified on the licence or notified to the OTC.  The result of the public inquiry was that the Appellant was formally warned following the Appellant undertaking to submit its vehicles to pre-MOT inspections.  Mr Larkin was warned that any further attendance at a public inquiry would result in severe regulatory action.  Rather surprisingly, the Appellant’s authorisation was increased by one vehicle.  
(v)	On 1 November 2012, an unannounced maintenance investigation took place as a result of one of the Appellant’s vehicles being issued with an “S” marked prohibition for brake defects on 13 August 2012.  The defects included a pipe from the compressor to the tank being inadequately repaired by tape.  The investigation was marked “unsatisfactory” because of that prohibition and as a result of: the same vehicle having been operated for six weeks without an MOT certificate; the driver of that vehicle having been issued with a fixed penalty for a failure to produce tachograph records; he had also been given a fixed penalty for driving on a section of the M4 viaduct despite a 7.5 tonne weight restriction in force at the time; two delayed prohibitions having been issued during the maintenance investigation; the driver defect reporting system was not being fully used; the forward planner did not project six months ahead; no PMI records were available for inspection; no maintenance contract was available for inspection and the maintenance contractor had been changed without such change being notified to the OTC.  
(vi)	At the conclusion of the visit to the operating centre, VE Quagmire gave Mr Larkin until 5 November 2012 to produce the missing documents.  When no documents were produced, VE Quagmire telephoned Mr Larkin on 7 November 2012 and reminded him that he had agreed to submit the documents and a further deadline of 12 November 2012 was set.  No documents were submitted.  On 21 November 2012, VE Quagmire visited the operating centre and discussed with Mr Larkin the shortcomings identified by him during his maintenance investigation.  A PG13F&G was given to Mr Larkin for his response.  No response was received within the fourteen day deadline.   
(vii)	A public inquiry was scheduled for 6 March 2013.  However, on 5 March 2013, Mr Larkin contacted the OTC advising that as he had changed his correspondence address without notifying the OTC, the public inquiry brief had been sent to the wrong address.  The hearing took place on 13 March 2013.  Mr Larkin appeared on behalf of the Appellant which was not legally represented.  He submitted to the Traffic Commissioner: copy bank statements demonstrating financial standing for four vehicles; a copy maintenance contract dated 30 November 2012 with Barry Wilkes; a letter dated 12 March 2013 (the day before the public inquiry) addressed to Mr Larkin from Steve Braim, a CPC qualified Transport Manager which stated that Mr Braim would be happy to work with Mr Larkin to “get everything in place and up to date as is required by law and stated in your operator licence .. Initially it will be very tough to sort everything out but I am sure we will have everything running correctly and consistently”.  
(viii)	The only query Mr Larkin had about the report of VE Quagmire was whether the two delayed prohibitions issued during the maintenance investigation for insecure seatbelts were justified.  He could not explain why he had failed to provide the PMI and other records to VE Quagmire or why he failed to respond to the PG13F&G form.  He could not say why the vehicle which was stopped on the M4 did not have an MOT certificate; he thought that the presence of the vehicle on a weight restricted part of the M4 was because the driver was Romanian and was unfamiliar with UK road signs; he acknowledged that he had failed as an operator and that was the reason for using the services of Mr Braim; he had also changed maintenance contractors to Barry Wilkes.  
(ix)	Mr Larkin produced the PMI records at the hearing and it then became apparent that the Appellant was operating a vehicle which had not been specified on the licence.  This vehicle had been acquired in July or August 2012.  On close inspection of the records relating to that vehicle, it became apparent that the last maintenance inspection prior to change of ownership had been in March 2012; the first inspection undertaken by the Appellant was on 1 December 2012.  In relation to another vehicle, PMI records were missing and Mr Larkin could not provide an explanation.  
(x)	Mr Larkin did not produce any driver defect report books as they were kept by the drivers rather in the vehicles.  Books kept in vehicles tended to go missing.  Mr Larkin thought that his system was acceptable (indeed VE Quagmire had found the system to be acceptable although it was not being used effectively).  Mr Larkin accepted that items recorded on PMI records were the sort of defect that the drivers should have been picking up during their daily walk round checks.  He could not explain why the defects had not been identified.  He did however produce a photograph of a forward planner up to the end of 2014.
(xi)	As for tachographs and drivers hours, Mr Larkin stated that the drivers of the 7.5 tonne vehicles did not use tachographs because they did not drive outside a 50km radius from the operating centre and the 18 tonne vehicle had a digital tachograph.  He maintained that he regularly checked the printouts.  However, he was not aware of the obligation to download the digital information every 56 days and only some of his drivers who were driving under domestic rules kept a record of their driving time.  Mr Larkin was unaware of the minimum rest period requirements but stated that it was unlikely that his drivers would exceed 4.5 hours driving because of Appellant’s work being relatively close to the operating centre.  
(xii)	Mr Larkin stated that he employed six people with that number increasing to fourteen in summer, although he had been so busy throughout 2012 that his workforce had remained at fourteen.  The increase in his workload partly explained why he had not been sufficiently conscientious with regard to maintenance.  His business could not function without a licence and he now realised the gravity of his situation and with the help of Mr Braim, he was sure that he could operate compliantly.  
(xiii)	In his written decision, the Traffic Commissioner concluded that the Appellant had clearly not been operating in a compliant manner and amongst other things he described the driver defect reporting system as dysfunctional (although that is at odds with the finding of VE Quagmire).  Be that as it may, having set out all of the significant shortcomings of the operation, he noted that they were in very similar terms to those shortcomings identified in 2007, 2008 and January 2012 and he was struck by the fact that following the adverse report being provided to him in November 2012, Mr Larkin did nothing to address the shortcomings until he contacted Mr Braim for help.  On the positive side, the MOT rate had improved since January 2012 and a satisfactory forward planner was in use.  Mr Larkin also appeared to have realised that he could not continue operating vehicles as he had been and intended to engage a qualified Transport Manager.  
(xiv)	The Traffic Commissioner found that regulatory action was justified under ss.26(1)(f), (c)(iii), (ca) and (e).  He then asked himself the “Priority Freight” question (T/2009/225 Priority Freight) and concluded that it was unlikely that the Appellant would operate in compliance with the operator’s licensing regime in the future.  His reasons were that the Appellant had failed completely to improve compliance throughout the life of the licence despite warnings and two public inquiries, the last concluding with a warning that “severe” regulatory action would be taken if further non-compliance was found.  Mr Larkin did not understand the compliance responsibilities of an operator or what he needed to do to fulfil them.  Whilst Mr Braim’s potential involvement was positive, the Traffic Commissioner would have given more credit for that involvement if it had commenced after the public inquiry in January 2012 or even in November 2012.  Rather a letter setting out Mr Braim’s preparedness to work was dated the day before the public inquiry.   His conclusion about  future compliance tended to affirm the question posed in Bryan Haulage (217/2002 Bryan Haulage No.2) and his answer to that question was in the affirmative.  Mr Larkin did not appear to take maintenance, record keeping and supervision of drivers’ hours seriously enough.  As a result, the licence would be revoked with effect from 20 April 2013.  The Traffic Commissioner advised that should Mr Larkin apply for an operator’s licence in the future, he should at least attend an operator licence awareness course and acquire a basic knowledge of drivers’ hours and tachograph rules and of good maintenance practice and show genuine regard for those matters rather than considering them a distraction from managing his business.

3.	At the hearing of this appeal, the Appellant was represented by Tim Nesbitt who submitted a skeleton argument and a bundle of authorities for which we were grateful.  It was accepted on behalf of the Appellant at the outset of the hearing that this case was one which warranted significant regulatory action.  There had been persistent and significant maintenance failures although the MOT pass rate had improved since the previous public inquiry.  
4.	The first ground of appeal was that the Traffic Commissioner had applied the wrong test when considering the revocation of a restricted licence and/or had failed to identify the legal basis of revocation of the Appellant’s licence.  The Tribunal was reminded that the legal basis for revocation of a restricted licence is lack of fitness as opposed to a lack of repute in the case of a standard licence, which is a higher standard (even if only slightly higher).  The Tribunal decisions in Priority Freight and Bryan Haulage No.2 were cases concerning good repute under a standard licence and whilst consideration of the questions posed in those decisions may be useful exercises for a Traffic Commissioner to undertake when considering the question of fitness or indeed when considering the exercise of the discretion under s.26 of the Act in the case of a restricted licence, neither case laid down the test of fitness or the appropriate discretionary sanction in relation to a restricted licence.  The Tribunal decision of 2013/07 Redsky Wholesalers Limited was referred to.  In the absence of any further explanation justifying or explaining the use of those tests of repute, the only conclusion that can sensibly be drawn is that at the crucial moment of reasoning the Traffic Commissioner was treating the Appellant as if the key question was whether it had repute, which was the wrong test.  In the event that the Traffic Commissioner was in fact asking himself those questions with a view to exercising his discretion under s.26, then he has not made that clear.  As a result, the Appellant was left without knowing the statutory basis upon which his licence was revoked.
5.	It is, with the greatest of respect to Mr Nesbitt, plain and obvious that the Traffic Commissioner was exercising his discretionary powers under s.26 when he revoked the Appellant’s licence.  The grounds for taking such action are clearly set out within the decision. The questions posed in Priority Freight and Bryan Haulage No.2 are questions that must be answered in the negative in the first decision and in the positive in the second before a finding of loss of repute can be made in respect of a standard licence which will then inevitably result in a mandatory loss of that licence.  We can see no reason in law or logic for a lesser or different test to be preferred when a Traffic Commissioner is considering his discretionary regulatory powers under s.26 either when dealing with standard or restricted licences.  Indeed, had the Traffic Commissioner failed to pose those questions, in all likelihood, complaints would have been made about such failures.  We are sure that the Traffic Commissioner’s approach to the exercise of his discretion under s.26 of the Act cannot be faulted and is plainly set out.
6.	The second ground of appeal concerns the issue of proportionality.  Mr Nesbitt referred the Tribunal to R (Daly) v Secretary of State for the Home Department (2001) 2 AC 532 in  which the test of proportionality in relation to legislation and any limitations therein which might impair the right or freedom of an individual was framed in the question “whether the means used .. are no more than is necessary to accomplish the objective”.  The Tribunal was also referred to Bank Mellat v HM Treasury (2013) UKSC 39  in which the question was posed “whether a less intrusive measure could have been used without unacceptably compromising the objective”.  In this case, whilst there had been repeated regulatory failings, there was still a range of regulatory sanctions available to the Traffic Commissioner falling short of revocation, for example suspension and curtailment.  These alternatives should have been considered carefully, particularly as there had been an improvement in the MOT pass rate and that Mr Larkin had sought the appropriate professional help.  Such a deliberation about whether a lesser sanction might suffice would have been fair and appropriate along with orders of suspension and curtailment which would have been a sufficient and proportionate response in this case.
7.	For our part we do not think that the two questions posed in the above cases are materially different.  Consideration must always be given to whether regulatory action short of revocation would be appropriate and proportionate in any given case and it is clear that the Traffic Commissioner had such a test in mind when he was considering whether Mr Larkin could be trusted in the future to run a compliant operation.  It is implicit in that question that if the answer is yes, then something short of revocation can be ordered.  Both questions posed by the Traffic Commissioner have proportionality at their heart.  We are satisfied that the Traffic Commissioner considered the correct tests in this case and arrived at the obvious only appropriate and reasonable conclusion.  This was a very bad case of repeated non-compliance despite warnings and two previous public inquiries.  We do not feel compelled whether by logic or law to come to a different conclusion to that of the Traffic Commissioner, which is  the test enunciated by the Court of Appeal in the case of Bradley Fold Travel Ltd and Peter Wright v Secretary of State for Transport (2010) EWCA Civ 695.  
8.	In the result, the appeal is dismissed and the order of revocation will come into effect at 23.59 on 9 September 2013.

Her Honour Judge J Beech
12  August 2013