Neutral Citation Number: [2011] UKUT 360 (AAC)

Appeal No: T/2011/35

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

ON APPEAL FROM THE DECISION OF PHILLIP BROWN, TRAFFIC COMMISSIONER for the SOUTH EASTERN & METROPOLITAN TRAFFIC AREA, 
DATED 5 MAY 2011

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

Appellant:
PROFESSIONAL TRANSPORT LTD

Attendance:

For the Appellant: 	Mr. P. F. V. Carless

Appeal heard at: 	Victory House, London
Date of hearing: 	29 July 2011
Date of decision: 	12 August 2011

DECISION OF THE UPPER TRIBUNAL:

IT IS HEREBY ORDERED that the appeal be dismissed

Subject Matter:	

Proportionality;

Questions by the Traffic Commissioner concerning the effect of regulatory action are not to be mistaken for an “indication” of the likely outcome.

Cases referred to:

Eurofast (Europe) Ltd [2011] UKUT 46 (AAC)
1997 J37 Galloway Refrigerated Transport Ltd

REASONS FOR DECISION:

1)	This was an appeal from the decision of the Traffic Commissioner for the South Eastern & Metropolitan Traffic Area made on 5/5/2011 when he curtailed the number of vehicles authorised under the operator’s goods vehicles operator’s licence from 11 vehicles to 8 vehicles, under Section 26 of the Goods Vehicles (Licensing of Operators) Act 1995.

2)	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 was the holder of a standard national goods vehicle operator’s licence authorising 11 vehicles and 7 trailers.
(ii)	A maintenance investigation was carried out on 3/12/10. The operator had undertaken that safety inspections would take place every six weeks. However, an examination of the records showed four occasions when the time gaps had become stretched – up to ten weeks on two occasions, and 13 weeks on two occasions. The driver’s defect reporting system was not always used, and the MOT first-time pass rate was well below the national average. Over a five-year period, 11 prohibition notices had been issued, including 5 immediate prohibitions, which indicate that the vehicle was, or would be, an immediate danger on the roads. In addition, there were 4 variation/refusals which suggest an inability to rectify a prohibitable item effectively. A previous written warning had been issued in January 2010, arising from an earlier unsatisfactory maintenance investigation which had shown similar shortcomings.
(iii)	A public inquiry took place on 5/5/2011. Mr Carless represented the company, and Mr Wickham, Director, also attended. A number of mitigating features were put forward, particularly in relation to the MOT failures, which included a high number of headlight aim failures which were attributed to the operator’s maintenance contractor failing to adjust headlight aim prior to test. If these were taken out of the calculation, the first-time pass rate would have been better than 70%. It was also submitted that some of the prohibitions were “down to driver defect reporting” and that none were “S” marked (although Mr Carless frankly accepted that one of the prohibitions, for two loose wheel studs, might well have attracted the “S” marking, indicative of a significant failure of maintenance). In relation to the stretched time gaps between preventative maintenance inspections, it was suggested that some of the vehicles might have been off the road, although no proper VOR record was kept.
(iv)	Mr Wickham was called and, towards the end of his testimony the Traffic Commissioner asked about vehicles in possession, and discussed the consequences of possible regulatory action. Mr Wickham said that the company was currently using eight vehicles, it being the company’s busiest period.
TC: All right. So if I were to reduce the number of vehicles which you could operate, how would that affect the licence?
A: Well if we cannot operate vehicles, we would have to then employ sub-contractors to do the same job and we would have to pay the staff not to do any work. They are all employed staff …
TC: What about if that reduction were temporary? I know you are going to say that depends on the length of the temporary reduction
A: Exactly.
TC: And if it were a week or three?
A: Anything is obviously going to hurt. Obviously, as these vehicles are actually operating at the moment, then it is going to hurt.
TC: So you have got eight out at the moment, have you?
A: Yes …
TC: All right. You have got no immediate plans to expand this fleet …?
A: Well not immediate …
(v)	In his closing submission Mr Carless said:
“ … He has got work for eight; he is busy with eight; he has got a margin of three. I am sure you will come to a decision that is equitable and proportionate and I would hope that you could see that as being removal of some, or even all, of the margin for a period of time, which would put down a marker as to what this company can and cannot do. In many ways, it would be a good thing because Mr Wickham could go back and tell his co-director and his drivers, “We have lost the margin. We have got to be very very careful because, next time, we will lose a lot more than that” – if there is a next time. I do not believe there will be.”
(vi)	The Traffic Commissioner retired and then delivered an oral decision. He noted the negative aspects as detailed in the evidence of the Vehicle Examiner, and he balanced against this the mitigating and positive features that were placed before him by the operator and Mr Carless. He noted that this was the first public inquiry for this operator. He recognised that efforts had been made to address the problems found. He concluded:
“I am going to curtail the number of authorised vehicles on your licence from eleven vehicles to eight vehicles, which is the number you are currently working with, with immediate effect. That means that if you wish to increase your fleet at any stage, you will need to apply for a variation.”
(vii)	The Grounds of Appeal are:
“The decision is not proportionate to the level of compliance failure and is contrary to the indications given during the P.I. as to the likely level of action to be taken by the Traffic Commissioner”.

3)	At the hearing of this appeal, the Appellants were represented by Mr Carless who submitted a skeleton argument for which we were grateful.  The essence of the operator’s case is that the outcome was contrary to the indications given by the Traffic Commissioner during the public inquiry. He had accepted that the MOT failures were largely the fault of the contractor who had not corrected  headlight aim prior to test and, instead, routinely addressed this matter at test, and the Traffic Commissioner had also accepted that the operator had responded appropriately to the concerns raised and implemented improvements to maintenance systems. He had discussed a time-limited curtailment and so a curtailment that was not time-limited was unexpected and disproportionate. 

4)	On the question of proportionality, the tribunal finds no merit in this submission. In Eurofast (Europe) Ltd [2011] UKUT 46 (AAC) the tribunal said:

“Clearly, if there has been no balancing exercise, or if the challenged decision lacks either intelligible or adequate reasoning, or those elements that are regarded as the essential ingredients of a written decision are missing, or if there is an apparent and material error in the Commissioner’s understanding of the law or the key facts, then an appellate tribunal will be bound to consider whether it should intervene on the ground that the Commissioner’s decision is plainly deficient or wrong. But an assertion that a decision is “disproportionate” is often little more than an assertion that the Appellant disagrees with the Commissioner’s findings of fact, or thinks that the action taken was too severe. This does not, however, mean that an error of law has occurred, or that reason and the law require the tribunal to take a different view.”

5)	In the present case, there was a proper balancing exercise and there were, in particular, a number of negative features that required regulatory action. There had been a previous warning for similar matters. The headlight aim MOT failures had happened over time, and an alert operator should have picked up on these repeated failures - even in a case where an outside contractor undertakes pre-MOT preparation. A letter from the contractor placed before the Traffic Commissioner was dated the day before the public inquiry, so it cannot be asserted that the operator had been vigilant or proactive, or that the operator would have picked up the problem in any event. There had been seven prohibitions in 2010, plus a variation and refusal. This was unacceptable for a small fleet, even if some of the defects were operational or down to driver error, and any responsible operator should have picked up on the regularity of prohibitions and done something about it. Furthermore, a stretching of time gaps between safety inspections, with no documented explanation, is indicative of an operator that has taken its eye off the ball. In the circumstances, we have no doubt that the Traffic Commissioner gave adequate weight to the evidence that these problems were being addressed, albeit in some respects very belatedly. Had the Traffic Commissioner not attached weight to the positive aspects of the case then we anticipate that much more severe regulatory action would have been justified.

6)	We also find no merit in the argument relating to “indications”. From as far back as 1997, in J37 Galloway Refrigerated Transport Ltd the tribunal has encouraged Traffic Commissioners, where such a course is practicable and appropriate, to flag up the possible outcomes so as to enable an operator to make representations about the effect on their business.  Without such material, it has been suggested, Traffic Commissioners are unable to make an informed judgment as to, for example, the effect and proportionality of a lengthy suspension, or a substantial curtailment. Subsequently, this guidance has been tempered by a number of decisions that recognise the inherent difficulties in such a ‘rule’, and the current position is simply that such an exploration of the effects of regulatory action may or may not be possible or desirable, depending upon the particular circumstances.

7)	In the present case, the operator appears to have mistaken a perfectly proper discussion about current operational needs and the effect of a curtailment (whether time-limited or not) with an indication as to the likely outcome. The Traffic Commissioner was not, in our view, giving an indication, he was merely exploring possibilities. This is an extremely difficult thing to do – not least because, until all evidence and submissions have been heard, the Traffic Commissioner must have an open mind and, in serious cases, Traffic Commissioners should reserve their decision to allow further time for reflection. It will therefore be difficult, if not impossible, for a clear indication to be given during the evidence, and the best a Traffic Commissioner can hope to do is to make a number of pertinent enquiries as to the likely effect of various disposals although, in reality, the usual response that such enquiries produce is that anything that affects the operational fleet would be irretrievably damaging to the business. It is, however, very rare for such assertions to be backed up by any corroborative evidence.

8)	We therefore conclude that the Traffic Commissioner is to be commended for attempting to discuss consequences although, in the event, he did not remove any vehicles in possession. He simply removed the margin, which had the effect of preventing further expansion until such time as the operator could prove, by results, that real and sustained improvement had taken place. In the circumstances, we think that this was plainly right and sensible, and was an entirely appropriate outcome on the facts. The appeal is dismissed.

Judge Mark Hinchliffe, DCP
12/8/2011