Neutral Citation Number: [2013] UKUT 0486(AAC)		Appeal No.  T/2013/42

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 24 May 2013

Before:
Her Honour Judge J Beech, Judge of the Upper Tribunal
Stuart James, Member of the Upper Tribunal
Michael Farmer, Member of the Upper Tribunal

Appellant:

PROJECT MOVEMENTS LIMITED
(JOHN NORCOTT)

Attendances:
For the Appellant: John Norcott appearing on his own behalf

Heard at: Field House, 15-25 Bream’s Buildings, London, EC4A 1DZ
Date of hearing: 17 September 2013
Date of decision:   26 September 2013

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that this appeal be ALLOWED to the extent that this matter be remitted for John Norcott to make representations as to why he should not be disqualified under s.28(1) of the Goods Vehicles (Licensing of Operators) Act 1995

SUBJECT MATTER:-  Disqualification of a Director; reasons and balancing exercise.

CASES REFERRED TO:-  None

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 24 May 2013 when he disqualified John Norcott from holding or obtaining an operator’s licence for a period of twelve months under s.28(1) of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”).  Whilst the appeal was lodged by Mr Norcott in the name of Project Movements Limited (“the company”), in reality it is Mr Norcott who is the Appellant and as a result it is he who will be referred to as the Appellant in the body of this decision.

2.	The factual background appears from the documents and the Traffic Commissioner’s decision letter and is as follows:

(i)	Following a public inquiry, the company was granted a standard international licence authorising three vehicles and three trailers on 10 January 2011.  The following undertakings were attached to this company’s licence:
a)	Safety inspections will be pre-planned and never more than 8 weeks apart.  The PMI reports will be fully and properly completed, show rectification and be retained for at least two years;
b)	All tachographs will be independently analysed and monthly reports will be prepared, acted upon and retained for at least two years;
c)	A training programme provided by RHA/FTA or similar and relating to New Operator’s responsibilities will be undertaken by Mr John Norcott within six months.  Written details of sessions and attendees must be submitted to the Traffic Area Office within ten days of the course;
d)	A CPC refresher course within six months to be undertaken by the Transport Manager Michael Found.  Thereafter, the operator will ensure that all existing and new drivers, the Transport Manager and Mr Norcott will receive annual training and records of all training sessions and attendees will be kept for at least 2 years;
e)	Company to provide 6 months bank statements from January 2011 to 31 July 2011 to show necessary finance, by no later than 15/8/11.
There was nothing within the appeal bundle to indicate why these undertakings were recorded on a new operator’s licence.  Mr Norcott informed the Tribunal that the undertakings were attached to the licence because a previous business entity linked with the company had gone into liquidation and its licence had been surrendered.  That explanation cannot account for the undertakings set out at a) to c) above.  It is clear that there must have been some concerns (at the very least) about maintenance, drivers hours and records and regulatory compliance during the life of the previous licence.  
(ii)	On 14 March 2012, a vehicle examiner carried out an operator inspection (no report is included in the appeal bundle).  The company was subsequently called to a public inquiry.  It was recorded in the Case Summary compiled by the Office of the Traffic Commissioner (“OTC”) for the benefit of the Traffic Commissioner, that the company had failed to comply with its undertakings that the transport manager would attend a CPC refresher course and to provide bank statements by 15 August 2011.  A public inquiry took place on 6 September 2012 at which the Traffic Commissioner curtailed the operator’s licence to one vehicle and one trailer until 6 January 2013.  He also suspended the licence from 7 September to 13 September 2012.  A period of grace was granted until 31 December 2012 to allow the company’s proposed transport manager (Nikki Huxtable) to pass the international CPC examination.   The following additional undertaking was recorded on the licence:
“Monthly bank statements to be submitted to the Office of the Traffic Commissioner, Eastbourne by the 20th of each month for a period of 6 months.  The finances must show access to sufficient financial resources i.e. £7,700 during the period of curtailment and £11,900 thereafter.  The first bank statement to be supplied no later than 20th October 2012”.  
(iii)	The decision letter issued to the company following the public inquiry advised:
“The Traffic Commissioner reached this decision as the company had not abided by the previous undertakings given when the licence was granted.  The operator had in place for many months a Transport Manager who was not continuously and effectively managing the transport side of the business.  The operator did not address the task of replacing the Transport Manager with sufficient urgency or request a period of grace in which to find a replacement.  Credit was given for the fact that a VOSA fleet inspection had been carried out and marked as satisfactory, showing that there were no significant maintenance failings”.  
(iv)	On 26 February 2013, the OTC received a letter from Nikki Huxtable dated 25 February 2013 informing the Traffic Commissioner that she had passed the international CPC examination but that she had terminated her contract with the company with effect from 1 March 2013.  The letter reminded the Traffic Commissioner that Ms Huxtable had attended the public inquiry on 6 September 2012 with Mr Norcott and that at the time, there were a number of issues regarding the former nominated transport manager, Mr Norcott’s management of the business and the company’s financial standing.  The letter went on:
“You extended the period of grace for a further six months on the basis that I sat and passed the international CPC and that Mr Norcott took a much more responsible stance with regards to running his business in line with VOSA regulations.  Mr Norcott was required to demonstrate that the sum of money recently paid into his account to meet the financial standing requirement remained in the account for six months”.
Ms Huxtable complained that she had only received irregular payments for her services despite numerous requests and that she was still owed a “considerable sum covering December 2012, January 2013 and February 2013.”    She enclosed the letter she had sent to Mr Norcott terminating her contract with the company.
(v)	On 27 February 2013, the OTC received a letter from Mr Norcott also dated 25 February 2013.  The letter complained that Ms Huxtable only attended the operating centre on rare occasions although when she did attend, the company’s records were all in order.  The letter continued:
“We feel that perhaps her time with this company will be short lived. We are currently interviewing for a replacement transport manager, however for the time being we are without one.  To try and alleviate this problem arising in the future and pending our failure to appoint a replacement transport manager within a couple of weeks, we will send one of our own employees on the next available CPC transport manager’s training course ..”
Enclosed with the letter was a copy of one addressed to Ms Huxtable which complained about her conduct and service “to date”.  The letter questioned whether she was completing her contractual hours and that monthly meetings had not taken place between Ms Huxtable and the works manager.  Further, she had taken to constantly telephoning and texting Mr Norcott when he was working in dangerous environments.  Her account would be paid in full once Mr Norcott had written evidence of work undertaken by Ms Huxtable.  The letter warned that the company and Ms Huxtable may have to “part company”.  
(vi)	On 6 March 2013, a “propose to revoke” letter was sent to the company in view of it no longer having a nominated transport manager.  The letter sent to the operating centre and was returned marked “Addressee gone away”.  
(vii)	On 18 March 2013, the OTC received a letter from Mr Norcott dated 15 March 2013.   He acknowledged receipt of the “propose to revoke” letter and further acknowledged the Traffic Commissioner’s concerns about the lack of a nominated transport manager.  However, the company’s one vehicle had passed its MOT upon first presentation; roller brake testing was undertaken three to four times a year and the vehicle’s mileage was low, being 6,000 miles in one year.  He repeated his complaints about Ms Huxtable and reminded the Traffic Commissioner that in an effort to be “completely transparent”, Mr Norcott had informed the Traffic Commissioner of the company’s dissatisfaction with Ms Huxtable by letter and that the company was “actively seeking  a replacement”.  Ms Huxtable could not live up to the company’s “exacting standards”.  If necessary one of the directors would sit the CPC examination but their time had recently been taken up completing the driver CPC courses along with fork lift truck training and first aid courses.  Mr Norcott asked for a further period of grace in which to appoint a transport manager.  
(viii)	The Traffic Commissioner refused Mr Norcott’s application and the letter, which was dated 25 March 2013, advised that a public inquiry would be held.  On 27 March 2013, the OTC received a letter from Mr Norcott advising the Traffic Commissioner that the company’s transport operation was to be suspended  and that the vehicle had been sold and the licence disc returned.  The company would continue with its engineering works and would need a restricted licence.  In the interim, the family would obtain a CPC qualification although one would not be required for a restricted licence.  He hoped that this would not present any problems.  
(ix)	A full call up letter was sent to the company on 17 April 2013, calling the company (and by a separate letter Ms Huxtable) to a public inquiry to be held on 23 May 2013.  In response, Mr Norcott wrote reiterating that the company had complied with all undertakings attached to the licence; that the licence had now been surrendered; that the only issue was the repute of Ms Huxtable and that it was the company that had written to the Traffic Commissioner notifying him that the company was unhappy with her.  The letter also informed the Traffic Commissioner that Mr Norcott had a pre-booked holiday on 23 May 2013 and asked if there was anything that could be done about the date of the hearing.  A member of the OTC staff later advised Mr Norcott by telephone that evidence was required of the pre-booked holiday.  None was forthcoming. 
(x)	In the interim, Ms Huxtable submitted to the Traffic Commissioner a full account of her dealings with Mr Norcott and the company including an account as to how she had fulfilled her functions as transport manager under the contract that she had with the company and the difficulties she had faced in receiving payment from the company.  She was still owed £600.  She enclosed the contract; a chronology of events and copies of correspondence and emails which had passed between herself and Mr Norcott.  
(xi)	On 21 May 2013, Mr Norcott sent an email to the OTC informing the Traffic Commissioner that the company had ceased trading with immediate effect.  
(xii)	On the date of the public inquiry, Mr Norcott did not attend and the company was not represented.  Ms Huxtable did attend, supported by her husband.  She went through her account of her dealings with Mr Norcott and the difficulties that she had encountered in receiving payment pursuant to the contract that she had with the company.  She was still owed £600.  She volunteered that when she did inspect the company’s documentation, all was in order as the driver of the vehicle was quite methodical in keeping all of the relevant records.  She accepted advice from the Traffic Commissioner about how she should undertake her duties as a Transport Manager and upon her charging rates.  She maintained that Mr Norcott must have received her letter of resignation on 26 February 2013 as it had been delivered by way of recorded delivery and that Mr Norcott had then sent a letter in reply and another to the Traffic Commissioner which he had “pre-dated” the 25 February 2013 to make it look as if he was alerting the Traffic Commissioner to the inadequacies of Ms Huxtable before she did the same about the company.  The Traffic Commissioner concluded on the balance of probabilities that this is what had taken place, describing it as a “huge coincidence that out of the blue on 25 February he (Mr Norcott) suddenly decided that everything had gone wrong” with the company’s relationship with Ms Huxtable.
(xiii)	By a letter dated 24 May 2013, the Appellant was notified of the Traffic Commissioner’s findings.  The company’s licence was revoked under s.27(1)(a) for failing to be of the appropriate financial standing and under s.27(1)(b) for not being professionally competent, the company having not had the benefit of a transport manager since 1 March 2013.  This was the second time that the company had been in this position as this was the subject of the public inquiry in September 2012.  Under s.28(1), the Traffic Commissioner disqualified the Appellant from being a director of a company holding or obtaining an operator’s licence for a period of 12 months (until 23 May 2014).  The reasons were stated to be:
“The history of the licence is one of repeated failure to abide by its undertakings, and repeated failure to employ a qualified transport manager.  Mr Norcott, if ever he wishes to apply for a licence in the future, or be a director of a company applying for a licence, needs time to reflect on what has gone wrong and on what he needs to do to make sure mistakes do not happen in the future and generally to educate himself on the responsibilities of a licence holder”.

3.	At the hearing of this appeal, Mr Norcott maintained that despite the contrary being clearly spelt out in the call up letter, he did not realise the importance of his attendance as a director at the public inquiry and that there was a risk of disqualification.  Neither did he appreciate that Ms Huxtable had been called to the public inquiry despite the call up letter clearly stating that this was the case.  He did not give any explanation for his failure to attend the public inquiry.   

4.	Mr Norcott did accept that the Traffic Commissioner did not have any choice but to revoke the company’s licence because it had ceased to trade.  He further conceded that he agreed with “most that the Traffic Commissioner did say”.  However, Mr Norcott blamed Ms Huxtable for any regulatory non-compliance and maintained that he had been transparent and open with the Traffic Commissioner about the deficiencies of Ms Huxtable and that he had written to the Traffic Commissioner “on numerous occasions” about her.  When asked to take the Tribunal to that correspondence, he was forced to accept that the first letter written to the Traffic Commissioner and indeed to Ms Huxtable was dated 25 February 2013 and that those letters were not received by the OTC or Ms Huxtable until 27 February 2013.  Mr Norcott was taken through the chronology of the email correspondence which had been produced by Ms Huxtable.  He was forced to accept that whilst Ms Huxtable was pursuing payment for her services in the emails, he did not at any stage complain that she was not fulfilling her duties under her contract until his letter of 25 February 2013 which the Traffic Commissioner found to have been “pre-dated” by Mr Norcott.  Mr Norcott accepted that it was unusual that the first piece of correspondence sent to a transport manager by an operator in which the operator complained about the conduct of the  transport manager should be sent to the Traffic Commissioner by the operator.  He accepted that Ms Huxtable now had a county court judgment against the company for £600.  

5.	Mr Norcott explained that the company had ceased to operate because the viability of the company had depended upon the operation of three vehicles.  The licence authorisation had then been reduced to one and the other operating overheads were too great.  He stated that it was a “tough world” and the company had tried to keep going.  New premises had been taken on to improve the company’s image but despite the difficulties, the company had been fully compliant with regard to its operator’s licence obligations.  The company had been let down by Ms Huxtable.  

6.	The Tribunal was not greatly impressed with the Appellant’s submissions.  He failed to attend an important public inquiry having been put on notice of the Traffic Commissioner’s powers.  He of course had previously attended at least two public inquiries: one resulting in the grant of a licence and the second for regulatory action to be considered.  The Tribunal does not accept that Mr Norcott did not appreciate the importance of attending the public inquiry even though the company had ceased to trade.  Neither does the Tribunal feel compelled on fact or law, to interfere with the Traffic Commissioner’s finding that in all likelihood Mr Norcott had “pre-dated” the letters of 25 February 2013 in order to pre-empt Ms Huxtable’s complaints of non-payment.  That is of course a serious finding which is tantamount to a finding of deceit.  

7.	The difficulty that the Tribunal has with the ultimate order of disqualification of Mr Norcott is that the single paragraph justifying such an order is inadequate to support such a serious order being made.  Whilst the order may very well be justified and proportionate, a reasoned decision was required with references to regulatory history, Mr Norcott’s involvement in that history, previous findings and the reasons for them, and evidence of a balancing exercise.  The Tribunal is also conscious of the fact that the serious finding of the “pre-dating” of letters was not something that was or could have been mentioned in the call up letter.  Having made a finding that this is what Mr Norcott had done, then he should have been given an opportunity to respond or to make representations upon that issue if it was a matter to be taken into account when deciding whether an order of disqualification was appropriate and proportionate.  It is unclear whether the Traffic Commissioner gave any weight to that finding when determining whether an order of disqualification should be made and if he did, what weight he attached to it.    

8.	This is not a case where the Tribunal could substitute its own decision for that of the Traffic Commissioner because of the paucity of information concerning the previous regulatory history of the company and its predecessor within the appeal bundle or within the Traffic Commissioner’s reasons for ordering disqualification.  As a result this appeal must be allowed and the matter be remitted to allow Mr Norcott an opportunity to make representations as to why he should not be disqualified from holding or obtaining an operator’s licence or from being involved in a company which holds or obtains such a licence.   He should be offered an opportunity to attend a public inquiry for representations to be made.

9.	The appeal is allowed and the matter remitted for Mr Norcott to make representations as to why he should not be disqualified under s.28(1) of the Act.  

Her Honour Judge J Beech
26 September  2013