Neutral Citation Number: [2013] UKUT 0399 (AAC)                                  Appeal No: T/2013/37

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

ON APPEAL FROM THE DECISION OF NICK DENTON, TRAFFIC COMMISSIONER for the SOUTH EAST AND METROPOLITAN TRAFFIC AREA, DATED 10 MAY 2013.

Before:
Judge Mark Hinchliffe, Deputy Chamber President (HESC); Judge of the Upper Tribunal.
John Robinson, Member of the Upper Tribunal.
Michael Farmer, Member of the Upper Tribunal.

Appellant:
UK LONDON SKIP HIRE BARKING LTD

Attendance:
For the Appellant: 	Mr Daly.
For VOSA:		Ms Evans.

Appeal heard at: 	Field House, Breams Buildings, London
Date of hearing: 	6 August 2013
Date of decision: 	13 August 2013

DECISION OF THE UPPER TRIBUNAL:

IT IS HEREBY ORDERED that the appeal be allowed.

We direct that a different traffic commissioner determine the application for the return of the impounded vehicle after an expedited hearing has been held to consider the application. We direct that any evidence to be relied upon by either of the parties in addition to that contained in our appeal bundle be served forthwith upon the office of the traffic commissioner and upon the other party but, to save time, we also direct that the written evidence contained within the appeal bundle need not be served again.

Subject matter:	
Impounding.
Determination by traffic commissioner of application for return of vehicle without a hearing.

Cases referred to:
41/2001 Tate Fuel Oils Limited
Close Asset Finance Ltd v Secretary of State for Transport [2003/3]
James Thorogood [2005/542]

REASONS FOR DECISION:

1)	This was an appeal from the decision of the Traffic Commissioner for the South East and Metropolitan Traffic Area (“the traffic commissioner”) made on 10/5/2013 when he refused an application by UK London Skip Hire Barking Ltd for the return of an impounded vehicle, a Mercedes 2 axle rigid skip loader goods vehicle, registration FN05 CHL (“the vehicle”).

2)	The factual background to this appeal appears from the documents and the traffic commissioner’s decision and is as follows:
(i)	The application for the return of the vehicle was made by “UK London Skip Hire”, with John M Parish named as a director.
(ii)	The traffic commissioner proceeded on the basis that “UK London Skip Hire” was shorthand for the full name of the vehicle’s registered keeper, namely UK London Skip Hire Barking Ltd, a private limited company previously known as UK London Skip Hire Ltd. It changed its name in May 2011. Mr John Michael Parish is the director of this company, and has been since 2010. The company does not hold an operator’s licence.
(iii)	Although UK London Skip Hire Barking Ltd was the registered keeper of the vehicle, the vehicle was, in fact, specified on the operator’s licence of one Lauri Sapiano, trading as WJ Skips. It has not been possible to trace this operator.
(iv)	The circumstances of the impounding are as follows. Some time before 09:30 hours on 24/4/2013 the vehicle was stopped by police officers. The vehicle was loaded with sheeting, pieces of wood and remnants of load. No operator licence disc was displayed.
(v)	The driver subsequently explained that he was a casual driver and, that day, he was working for “London Waste” of Creek Road, Barking. He said that he had picked the vehicle up from Creek Road and he thought that the vehicle belonged to London Waste. He had already, that day, used the vehicle to drop off an empty skip at Ilford, and he had then collected a loaded skip, which he had taken back to Creek Road. When he was stopped, he was on his way to Forest Gate to pick up another skip. He said his instructions came from “Tony” at London Waste. 
(vi)	There is no operator licence known under the name of “London Waste” of Creek Road, Barking. When asked where the operator licence disc was for the vehicle, the driver produced a piece of paper upon which were written the following details:
“A R Waste, James Stephen Deary. OK0231322. (A phone number was written here). Steve Ashby.”
The driver said that he had spoken to his office and these were the details of the operator licence that the vehicle was running under.
(vii)	Mr Parish, the director of the company shown as registered keeper was contacted. He was told that the vehicle was being impounded, and he replied that he was in the process of selling the vehicle to A R Waste.
(viii)	Meanwhile, Mr S Ashby attended at the roadside. He was the CPC holder and Transport Manager for A R Waste – a company owned by Mr J Deary. Mr Ashby denied that the vehicle was being operated by A R Waste. He explained that he had received a telephone call alerting him to the impounding. He said that a Mr Bansal, who was a director of a company called Barking Waste, had previously told him that the impounded vehicle and another vehicle were for sale. He said that A R Waste was interested in buying the vehicles. He had, therefore, sent an email to the VOSA operator licensing team at Hillcrest House to ask that the two vehicles be put on the operators licence held by A R Waste. He had, he said, followed this up with a telephone call to Hillcrest House, in which he asked for the vehicles to be put on the licence for one month.
(ix)	Mr Ashby went on to say that A R Waste had not yet paid for the vehicles and that he did not know that the impounded vehicle was being operated that morning. He insisted that the vehicle had not been operating under the licence held by A R Waste when it was stopped. Mr Ashby said he did not know why the driver had his details, and he did not know why the driver had suggested that the vehicle was being operated by A R Waste.
(x)	Authorisation was given for the vehicle to be impounded, which it then was.
(xi)	On 25/4/2013 Mr Ashby contacted Hillcrest House and asked that the vehicle be removed from the operator’s licence held by A R Waste.
(xii)	Subsequently, Mr Ashby was spoken to again. He agreed that there had been a conversation with Mr Parish in relation to purchasing a number of vehicles, including the impounded vehicle, and that he (Mr Ashby) had sent an email to the team at Hillcrest House, Leeds on 22/4/2013 asking that the vehicle be authorised under the operator licence held by A R Waste. However, the impression was given that Mr Parish and Mr Ashby had agreed that the vehicles would not be operated under the A R Waste licence until after 1.00pm on 24/4/2013, as Mr Ashby wanted to be sure that the vehicles were in a fit working state.
(xiii)	The papers before the Traffic Commissioner contain copies of emails from Mr Ashby to VOSA. The first, sent at 16:59 hours on 22/4/2013 said:
“James Deary (of A R Waste) wishes to purchase two skip vehicles to add to his other vehicle. As his Transport Manager I have suggested that he operates them for a short time before parting with any money so that I can keep a record of their performance and any running repairs and fuel costs. Can you please add both vehicles onto the licence.”
Mr Ashby gave the particulars of the two vehicles, including the impounded vehicle.
(xiv)	On 25/4/2013, the day after the impounding, Mr Ashby sent two emails to Hillcrest House asking that the vehicle be removed from A R Waste’s licence, and asking that no vehicles be added to the licence unless personally authorised by Mr Ashby.
(xv)	Mr Deary was later interviewed. He agreed that he was the owner of A R Waste, and that Mr Ashby was his CPC holder. He agreed that he was in the process of buying the vehicle (and another vehicle) but said that the purchase had not been completed. He added: “I’m not sure if they are operated by me or not”. He accepted that he had instructed Mr Ashby to place the vehicle on his operator’s licence on 22/4/2013, but maintained that he did not authorise its use on the road on 24/4/2013.
(xvi)	Mr Parish on behalf of the applicant company made the application dated 30/4/2013 for the return of the vehicle. Two grounds were relied upon. He said that either the vehicle was being operated under the operator’s licence held by AR Waste or, if it was not being so operated, he did not know it was being used in contravention of section 2 of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”).
(xvii)	The details given on the application form included the following:
“On 22nd April 2013 A R Waste was going to take over two skip loaders and contract work (skip work). Before vehicles left Creek Road, I was shown emails … that OK023132, the operator’s licence, had been applied for to FN05CHL … A R Waste was buying both vehicles + work … I left a driver on FN05CHL as a contract driver which at a later date would be with A R Waste. I apologise profusely at the misunderstanding ... thinking that they would be OK to use the vehicle before they had completely purchased the sale.”
(xviii)	Mr Parish indicated that he did not wish the application to be considered at a hearing, and the traffic commissioner decided that he would, indeed, determine the application on the papers without a hearing. This meant that Mr Parish was not sent a copy, or even a summary, of the available written evidence The first that Mr Parish knew of the evidence considered and generally accepted by the traffic commissioner was when he read the traffic commissioner’s decision refusing his application.
(xix)	The traffic commissioner decided that the applicant was the owner of the vehicle. He found, on balance, that at the time of the impounding the applicant was still operating the vehicle, even though moves were afoot for A R Waste to try it out for themselves before buying it. Checks of the operator licensing system showed that the vehicle was, in fact, added to the A R Waste licence at 3.34pm on 24/4/2013 – some two days after Mr Ashby’s email had been sent, and around six hours after it had been impounded.
(xx)	At paragraph 18 of his written decision, the traffic commissioner referred in his decision to evidence from “Steve Deary” (we assume he meant Steve Ashby) and to Mr Deary, and found that A R Waste was not operating the vehicle at the material time, and had not employed the driver. This, he found, was also consistent with the statements made at the time by the driver.
(xxi)	So far as the question of knowledge was concerned, the traffic commissioner found, at paragraph 19, that it was highly likely that “London Waste” (we assume he meant UK London Skip Hire Barking Ltd) was operating the vehicle, and therefore had actual knowledge that the vehicle was being used without an operator’s licence. There was nothing in Mr Ashby’s email of 22/4/2013 that would cause Mr Parish to believe that A R Waste intended to take on the contracts as well as the two vehicles. The traffic commissioner found that “London Waste” gave the driver details of A R Waste’s licence as a cover for its illicit operation.

3)	At the hearing of this appeal, the Appellant was represented by Mr Daly. VOSA did not formally apply to be a party to the appeal but, nevertheless, we permitted representations by Ms Evans on behalf of VOSA, and Mr Daly did not object. The Grounds of Appeal set out the appellant’s case in some detail, and VOSA submitted a skeleton argument. We were grateful for this assistance.

4)	Mr Daly’s key point was that Mr Parish had not had the advantage of seeing the evidence submitted by VOSA to the traffic commissioner and, consequently, had not been given any opportunity to challenge the veracity and reliability of the evidence, which had been accepted by the traffic commissioner without question. It was Mr Parish’s case that he was selling the vehicle together with some contractual business to A R Waste – including the business being undertaken by the vehicle when it was impounded. Mr Parish understood that, before the deal was finally completed, A R Waste wanted a trial period, and this was why Mr Ashby had sought to have the vehicle specified on A R Waste’s operator’s licence. 

5)	Mr Daly submitted that the email sent on 22/4/2013 suggested that A R Waste wished to have authorisation to operate the vehicle from that date. Mr Parish knew of the email and considered that the vehicle was, from that point, lawfully operating under the authority of an operator’s licence. On a trial basis, A R Waste had taken over the vehicle, and its work that day, and that was why the email had been sent two days earlier. There had been no request in the email seeking any delay in adding the vehicle to the licence, and it was not in dispute that the email had been sent, and received.

6)	Mr Daly’s second point was that, even if the totality of the evidence considered by the traffic commissioner led him to conclude that the vehicle was not, in fact, being operated by A R Waste, the traffic commissioner had not properly considered whether Mr Parish mistakenly believed that it was and, if so, whether this belief meant that he did not have the necessary knowledge of unlawful use that would be required to allow the traffic commissioner to refuse the application.

7)	On behalf of VOSA, Ms Evans’ key point was that the appellant had not asked for a hearing and the application form clearly stated:

“Please note that if no hearing is held, the application will be determined on the basis of the written evidence submitted by you and by VOSA.”

The traffic commissioner had, therefore, been entitled to determine the application administratively, without a hearing, and there had been no duty to disclose VOSA’s evidence to the applicant.

8)	Ms Evans also pointed out that Mr Parish, in the application, had said that the vehicle driver would transfer to A R Waste at “a later date” – which demonstrated that, whatever hopes Mr Parish had for a sale of the vehicle, or for transfer of some business contracts, no sale or transfer had taken place at the time of the impounding.

9)	Ms Evans accepted that in relation to public inquiries the Transport Tribunal has said, repeatedly, that the operator must be told at least “the substance” of the case they have to meet before an adverse decision can be made. However, even if the tribunal considered that due process had not been followed, this application was bound to fail on the facts. Consequently, following 41/2001 Tate Fuel Oils Limited, a hearing before a different traffic commissioner would inevitably produce the same result.

10)	We turn now to consider the applicable regulations, guidance and case law. The Goods Vehicles (Enforcement Powers) Regulations 2001, as amended by The Goods Vehicles (Enforcement Powers) (Amendment) Regulations 2009, provide:

Applications to a traffic commissioner
10.—(1) The owner of a vehicle detained in accordance with regulation 3 may, within the period specified in regulation 9(2), apply to the traffic commissioner for the area in which the vehicle was detained for the return of the vehicle.
(2) An application under paragraph (1) shall be given in writing and shall be accompanied by—
(a) a statement of one or more of the grounds specified in paragraph 4(3) on which the application is declared to be based; and
(b) a statement indicating whether the applicant wishes the traffic commissioner to hold a hearing.
(3) An application under paragraph (1) shall be served before the expiry of the period specified in regulation 9(2).
(4) …
(5) The period referred to in paragraphs (1) and (3) is subject to regulation 23.

Hearings
11.—(1) If—
(a) an application under regulation 10(1) is accompanied by a statement to the effect that the applicant wishes the traffic commissioner to hold a hearing; or
(b) having received an application under regulation 10(1) the traffic commissioner decides that it would be appropriate to hold a hearing before making a determination on the application,
the traffic commissioner shall hold a hearing within 28 days of receipt of the application (subject to the power of the traffic commissioner to extend the period in accordance with regulation 23).
(2) A hearing shall take place at the time and place specified by the traffic commissioner in his notice of the hearing.
(3) At a hearing the parties shall be entitled to give evidence, to call witnesses, to cross examine witnesses and to address the traffic commissioner both on the evidence and generally on the subject matter of the proceedings.
(4) Subject to the following provisions of this regulation, a hearing shall be held in public.
(5) The traffic commissioner may direct that the whole or any part of a hearing be held in private if he is satisfied that by reason of—
(a) the likelihood of disclosure of intimate personal or financial circumstances;
(b) the likelihood of disclosure of commercially sensitive information or information obtained in confidence; or
(c) exceptional circumstances not falling within sub-paragraphs (a) or (b), it is just and reasonable for him so to do.
(6) where the hearing is held in private the traffic commissioner may admit such persons as he considers appropriate.

11)	The various classes of knowledge to be considered when an applicant claims that he did not know that a vehicle was being used in contravention of section 2 of the Act are:

(i)	Actual knowledge; 
(ii)	Knowledge that the person would have acquired if he had not wilfully shut his eyes to the obvious; 
(iii)	Knowledge that the person would have acquired if he had not wilfully and recklessly failed to make such inquiries as an honest and reasonable person would make; 
(iv)	Knowledge of circumstances that would indicate the facts to an honest and reasonable person; and 
(v)	Knowledge of circumstances that would put an honest and reasonable person on inquiry.  

12)	An operator may not shut his eyes to the obvious but, as the tribunal stated in Close Asset Finance Ltd v Secretary of State for Transport [2003/3], a high degree of fault is required in relation to categories (ii) and (iii). Having said that, no separate finding of dishonesty is necessary in relation to these categories because they inherently involve deliberate and intentional conduct, or failure strongly indicative of a lack of integrity. Dishonesty is generally required for categories (iv) and (v).

13)	We drew the advocates’ attention to a case that they had not referred us to, but which we thought might be relevant, namely James Thorogood [2005/542]. Here, the Transport Tribunal, considering an impounding case where the traffic commissioner had determined the application without a hearing, had said:

“We think it likely that in many cases owners of impounded vehicles may not ask for a hearing because they think that this is unnecessary and that the answer in their favour is obvious. It follows that traffic commissioners must be astute to order hearings to enable the issue of knowledge to be explored if the facts are other than straightforward …”

14)	Having regard to the terms of regulation 11(1)(b), we think it is clear that, where an applicant for the return of an impounded vehicle indicates that a hearing is not requested, the traffic commissioner should still consider whether or not it would be appropriate to hold a hearing before making a determination on the application. 

15)	A vehicle is a possession under the European Convention on Human Rights, and both VOSA and the traffic commissioner are public authorities. The process by which a public authority may legitimately deprive persons of the quiet enjoyment of their possessions must be fair according to international standards. It is important to remember that impounding applications generally involve two parties: the applicant and VOSA. A hearing involves pre-hearing disclosure of documentary evidence, and provides parties with an opportunity to give evidence, to call or cross-examine witnesses, and to address the traffic commissioner. A hearing need not take too long to bring about – indeed, unless time is extended, the hearing must take place within 28 days of receipt of the application.

16)	Of course, there will be cases where the documentary evidence before the traffic commissioner conclusively demonstrates that there can be only one outcome. It is for this reason, we presume, that a traffic commissioner has power in an appropriate case to proceed without disclosure of evidence and without a hearing. There will be cases where the applicant’s case is clearly established, and there will be cases where the applicant’s case is clearly not established - and where, in either scenario, there is no serious possibility that disclosing the evidence, or holding a hearing, will make a material difference to the outcome. In such circumstances, it may be appropriate to get the decision made and the vehicle returned or sold promptly, without drawing things out unnecessarily. 

17)	We therefore have some sympathy with traffic commissioners required to make this sort of decision. A hearing almost inevitably involves delay, and delay means that storage costs for the impounded vehicle will increase. This will either prejudice VOSA if the application is eventually successful, or it will prejudice the unsuccessful applicant because delay erodes any balance of funds that might be released once the costs of the impounding and storage have been deducted from the proceeds of sale. And even if the applicant is eventually successful, any delay in returning the vehicle may have serious commercial consequences for which there will be no recompense.

18)	However, despite these competing imperatives, we consider that the interests of justice must prevail. There should generally be a hearing if the case is not straightforward or if there is a serious possibility that pre-hearing disclosure of documentary evidence followed by a hearing might make a material difference to the outcome, one way or the other.

19)	In the present case we consider that the traffic commissioner had sufficient inconsistent evidence to conclude that the facts were not straightforward and that, particularly in relation to the owner’s knowledge, there was a serious possibility that, following disclosure of all documentary evidence to the applicant, a hearing might make a material difference to the outcome. There was a fundamental conflict of evidence in relation to crucial and relevant matters, and this conflict was apparent on the papers before the traffic commissioner. The applicant’s claim, at least to a degree, appeared to be supported by the pre and post impounding emails sent to the operator licensing team, and by the unsolicited arrival at the scene of Mr Ashby who, on his own version of the facts, had no involvement in the use of the vehicle that morning.

20)	It is, of course, quite possible that, after a hearing, a different traffic commissioner will conclude that the actual use of the vehicle on the morning of its impounding was nothing to do with A R Waste and that Mr Parish knew this perfectly well or, at least, had the level of knowledge set out in one or more of categories (ii) - (v), set out in paragraph 11 above.

21)	In all the circumstances we have decided that, especially when he became aware of the email dated 22/4/2013, the traffic commissioner should have decided to hold a hearing. This would have enabled him to resolve the conflict of evidence more fairly, and to establish whether or not the emails (and any other relevant factors) proved, on balance, that A R Waste was operating the vehicle at the relevant time or, if it was not, that Mr Parish was labouring under some sort of misunderstanding. If there was a degree of misunderstanding, a hearing might have enabled the traffic commissioner to establish what the nature, extent, cause and consequence of that misunderstanding actually was – which might then have allowed him properly to address the question of knowledge.

22)	The appeal is allowed. We direct that a different traffic commissioner determine the application for the return of the impounded vehicle after an expedited hearing has been held to consider the application.

23)	We direct that any evidence to be relied upon by either of the parties in addition to that contained in our appeal bundle be served forthwith upon the office of the traffic commissioner and upon the other party but, to save time, we also direct that the written evidence contained within the appeal bundle need not be served again.

Judge Mark Hinchliffe, DCP
13 August 2013