Neutral Citation Number: [2009] UKUT 219 (AAC)
Appeal No.  2009/252
IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
TRAFFIC COMMISSIONER APPEALS

ON APPEAL FROM THE DECISION OF 
Miles Dorrington DEPUTY TRAFFIC COMMISSIONER for the 
SOUTH EASTERN & METROPOLITAN TRAFFIC AREA Dated 3 April 2009

Before:
Frances Burton
Leslie Milliken
David Yeomans

Appellant:
ADRIAN O’MALLEY T/A O’MALLEY HAULAGE

	 
Attendances:
For the Appellant: Mark Laprell of Counsel

Heard at:	Victory House
Date of hearing:	11 September 2009
Date of decision:	10 October 2009

DECISION OF THE UPPER TRIBUNAL
IT IS HEREBY ORDERED that this appeal be ALLOWED and it is determined that the Appellant has demonstrated financial standing for the authorisation on his operator licence.

REASONS FOR DECISION

1.	This was an appeal from the Decision of the Deputy Traffic Commissioner for the South Eastern and Metropolitan Traffic Area dated 3 April 2009 when he revoked the operator’s goods vehicle licence under ss 26(1)(e), 26(1)(h), 27(1)(a) and 27(1)(b) of the Goods Vehicle (Licensing of Operators) Act 1995 (“the Act”) and disqualified the operator from holding or obtaining an operator’s licence for 24 months with immediate effect under s 28 of the Act. On 29 April 2009 the Appellant appealed to the Transport Tribunal against loss of his repute and disqualification on the grounds that the Deputy Traffic Commissioner failed to ensure a fair hearing, in that he failed to provide adequate disclosure of documents in the exclusive possession of the Traffic Commissioner’s office or of the police; that he reached conclusions in advance of the hearing to the prejudice of the Appellant in that he treated police evidence incorrectly; that he failed to carry out a proper balancing exercise when considering the evidence, in particular in relation to the alleged production of false letters by the Appellant; and failed to take account of submissions made on behalf of the Appellant.
2.	The factual background appears from the documents, the transcript of the public inquiry and the written decision of the Deputy Traffic Commissioner and is as follows :
(i)	The operator held a standard international goods vehicle licence authorising 4 vehicles and 1 trailer with his father as nominated transport manager. Additionally the operator (Mr Adrian O’Malley) is one of 2 Directors of O’Malley Haulage Limited, whose licence authorised 7 vehicles and 1 trailer. The Operator and Transport Manager were called to a public inquiry on 19 February 2009 owing to discovery of an allegedly false maintenance contract.
(ii)	At the public inquiry the hearing went immediately into camera and the Deputy Traffic Commissioner revoked the licence on the grounds of lack of financial standing under s 26(1)(h) and s 27(1)(b) of the Act.
(iii)	At the commencement of the open hearing the Operator and Transport Manager were represented by Mr R. Pelly of Pelly’s Transport & Regulatory law, and Mr Halpin of the London Borough of Harrow and Mr Farrar, Transport Consultant, were also present as witnesses, as were the Appellant and Transport Manager and D.I. Rose of the Metropolitan Police. Statements were lodged by D.I. Rose, the Appellant and Transport Manager and formed part of the evidence. Two letters not previously seen were disclosed to the Appellant and Transport Manager and their adviser and time was given to take instructions. Evidence was heard from Mr Halpin and Mr Farrar.
(iv)	The Deputy Traffic Commissioner reserved his decision. The gist of the issues at the public inquiry was whether the maintenance contract was a false document. The reason for such a suggestion was that it bore an address from which no maintenance could be carried out and the name of a Mr Kelly whose actual existence was in question. D.I. Rose had interviewed 20 people in connection with Crown Court proceedings against a Mr Plummeridge, none of whom had ever admitted to seeing Mr Kelly and now  was he called as a witness by the Defence.  On the other hand the operator had stated that Mr Kelly did exist as he and others had met him on some occasions but that his services had been dispensed with as he had proved unreliable and unprofessional. Mr Halpin had also met Mr Kelly on one occasion. D.I. Rose, however, conceded that there was no evidence that either the Operator or the Transport Manager knew that the maintenance contract was a false document.   There was also a great deal of confusing evidence about correspondence which was regarded as misleading and had adversely impressed the Deputy Traffic Commissioner.
(v)	In the result the Deputy Traffic Commissioner had found against the Appellant, having believed D.I. Rose, and concluded that Mr Kelly was a fictitious character, the maintenance contract a false document and that the operator was not a credible witness. The Deputy Traffic Commissioner also concluded that the correspondence referred to had been created later than the dates thereon and that the Appellant knew they were false. He therefore concluded that the Appellant had been in breach of the trust at the heart of the operator system and took the action referred to in paragraph 1 above.
3.	At the hearing of the appeal the Appellant and Transport Manager were represented by Mr Mark Laprell of Counsel who presented us with a helpful skeleton argument for which we were grateful.
4.	Mr Laprell’s first point was that the operator had felt that, in the eyes of the Deputy Traffic Commissioner, he was a “marked man” simply because he had had dealings with the well known dishonest Transport Consultant, Mr Plummeridge, who had widely forged documents in licensing applications, including CPCs, bank statements and maintenance contracts, and had been convicted of obtaining money or a pecuniary advantage by deception. However, he emphasised, that did not mean that every transaction in which Mr Plummeridge had been involved was necessarily dishonest, for example in the present case there was positive proof that the Appellant’s licence had been obtained using genuine bank statements and there had been no suggestion of a forged CPC. The issue in the present case had been the maintenance contract.
5.	Mr Laprell’s second point was that the Deputy Traffic Commissioner had misunderstood the burden of proof and the effect of Muck It (2005) EWCA Civ 1124. At the very beginning of the hearing he had said there was a case to answer so the burden of proof shifted to the operator. He had, moreover, decided there was a case to answer before the hearing began, which was an approach “swept away” by Muck It. We therefore agreed that Mr Laprell might amend the grounds of appeal, drafted by Mr Pelly, to include this ground,  that the burden of proof never rested on the Appellant.
6.	Mr Laprell’s third point was that the DTC had approached all his findings of fact on an incorrect basis but had found that even on this basis he could not be satisfied that the operator was dishonest in relation to the contract with Mr Kelly. He had instead relied on the fact that the letters written after their purported dates were deliberately used to mislead the Traffic Area Office.  It was argued that the basis for this finding was unreliable and illogical. It was not unknown for documents to have been lost or misplaced by the Traffic Area Office, especially at this time with the contemporaneous centralisation of documents at Leeds. This, together with the fact that they were not found during the investigation of the criminal proceedings, was insufficient to justify the “quantum leap” conclusion of the DTC. Accordingly, he submitted, there was no solid basis for finding that these letters were forged.
7.	Mr Laprell’s fourth point was that there had been no finding that the operator knew that the maintenance contract was a false document and there was no basis for the finding that the signature of Mr Kelly was not Mr Kelly’s.
8.	Mr Laprell’s fifth point was that the DTC had not analysed which parts of D.I. Rose’s evidence he had accepted and that he could not have accepted all of it as it had been “significantly diluted” in cross-examination. Mr Laprell took us in detail through paragraphs 23-38 of the DTC’s Decision indicating the DTC’s gaps in logic in deducing that the operator was wrong, dishonest and not credible and to paragraphs 40 to 42 where the DTC’s balancing exercise was not explicit in relation to the requirements established by the decision in Bryan Haulage Nos 1 and 2 and Priority Freight 2009/225. There had been no attempt to consider positives such as 2 years of criticism free running, no convictions, no previous regulatory action and no substantive maintenance or drivers’ hours issues, nor even any consideration of what the Appellant’s motives could have been in falsely nominating Mr Kelly when he had the services of his father available.  If the maintenance contract was forged, why was it not forged to a date which was consistent with evidence that would be given about when Mr Kelly ceased to provide services. Mr Laprell drew a parallel between the lack of a balancing exercise in the present case and in that of Ian Cotton 2009/176, concluding that the disqualification served no regulatory purpose.
9.	In summary Mr Laprell submitted that the evidence against the Appellant was not cogent and was built on insufficient foundations. He requested us to allow the appeal and to substitute our own decision as the whole edifice had been built on suspicion and submitted that we had enough material before us to do so. We noted that the decision in Priority Freight was after the DTCs decision in the present case but that the core flaw in the DTC’s decision was that the burden of proof had been wrongly applied and the balancing act was also significantly flawed.
10.	Mr Laprell asked the Tribunal to exercise its discretion with respect to the DTC’s finding of lack of financial standing. He submitted that at the Public Inquiry the Appellant company’s representative had failed to furnish the available evidence of financial standing. Mr Laprell sought and was granted permission to pass to us the original documents that had been available to the Appellant’s representative at the Public Inquiry: these documents were authenticated and copies taken. The bank statements and credit card statements established the financial standing of the Appellant at the date of the Public Inquiry. Rather than remit the case for rehearing we accepted Mr Laprell’s request to substitute our own decision and to determine that the Appellant Operator is of sufficient financial standing.   The Traffic Commissioner is of course entitled to require further evidence of financial standing at any time should he wish to do so.

Frances Burton
10 October 2009