Case No. UKUT-00320-(AAC)

1.The information referred to in section 8 (4) is the following –(e) particulars of any relevant activities carried on, at any time before the making of the application, by any relevant person;…”57.As Mr Clarke further points out, “relevant person” and “relevant activities” are defined terms. Paragraph 2 to schedule 2 relevantly provides:“2.In this Schedule “relevant person” means any of the following persons, namely –(a) the applicant;(b) any company of which the applicant is or has been a director;(c) where the applicant is a company, any person who is a director of the company;(d) where the applicant proposes to operate the vehicles referred to in the statement under section 8 (3) in partnership with other persons, any of those other persons;(e) any company of which any such person is mentioned in sub-paragraph (c) or (d) is or has been a director;(f) where the applicant is a company, any company of which the applicant is a subsidiary.”58.Paragraph 3 of the same Schedule provides:“3.In paragraph 1 (e) “relevant activities” means any of the following –(a) activities in carrying on any trade or business in the course of which vehicles of any description are operated;(b) activities as a person employed for the purposes of any such trade or business;(c) activities as a director of a company carrying on any such trade or business”.59.Mr Clarke then stresses that neither Mr Lewis nor Mr Scott nor REL Investment Management Limited fall within the definition of “relevant person” as set out above.60.We do not see that the above legislation affords the appellant the assistance Mr Clarke seeks to persuade us that it does. Section 8 and the paragraphs we are taken to within Schedule 2 to the Act, are concerned with the rights of a TC to obtain information and the question of which persons are obliged, if such is required, to give it. It effectively requires further information to be given to a TC, in pursuant of that TC’s duties, by certain individuals or companies. But it does not, of itself, prevent a TC from considering material which is before him emanating from someone other than a “relevant person” nor does it do anything to prevent a TC from enquiring into or making findings about who might be the controlling mind of an operator which is seeking or resisting revocation of a licence. 61.Mr Clarke next points to the fact that it is the appellant company rather than any individual which is the applicant for the licence sought. We agree that, in the circumstances of this case, the “applicant” as that word is used at section 13A(2) of the 1995 Act, is the applicant company (REL Haulage Limited). Mr Clarke goes on to ask whether, against the above legislative background, a TC is permitted to consider the repute of shareholders of an applicant which is, as here, a corporate entity. He says that such is not permitted. As we say, we do not see that he derives any support for that proposition from section 8 of the 1995 Act. But he also relies upon case law regarding circumstances in which a corporate veil can or cannot be pierced. In oral submissions he seemed to rely, in particular, upon the decision of the Court of Appeal in VTB Capital PLC v Nutritek International Corporation and others [2012] EWCA Civ 808 in which it was said:“78…. First, ownership and control of a company are not of themselves sufficient to justify piecing the veil. Second, the court cannot pierce the veil, even when no unconnected third parties involved, merely because it is perceived to do so is necessary in the interest in justice. Third, the corporate veil can only be pierced when there is some impropriety. Fourth, the company’s involvement in an impropriety will not by itself justify a piercing of its veil: the impropriety “must be linked to use of the company’s structure to avoid or conceal liability”….. .Fifth, it follows that if the court is to pierce the veil, it is necessary to show both control of the company by the wrongdoer and impropriety in the sense of a misuse of the company as a device or façade to conceal wrongdoing. Sixth, a company can be a façade for such purposes even though not incorporated with deceptive intent”. 62.Mr Clarke says that none of those exceptions apply here. He also asserts that the Upper Tribunal has reaffirmed the correctness of that approach in this jurisdiction. He has in mind as to that, the decision of the Upper Tribunal in Vision Travel International Limited [2013] UKUT 0411 (AAC). It was said therein:“9.…. We agree that a Traffic Commissioner is required to respect the principle of the separate legal personality of an incorporated company. That principle has the result that there is a corporate veil between such a company and its directors and shareholders. Indeed, we accept that it is not enough per se that someone is the sole shareholder and the sole director of a company for a Traffic Commissioner to equate him with the company. Had the Traffic Commissioner adopted that approach she would have indeed erred in law. We refer to Edward Coakley, T/A C.R.A., T/2011/63 paragraph 6 (ii) where this Tribunal fully accepted as submission by Counsel for the appellant in that case which was summarised as follows:“In the paragraph cited the Traffic Commissioner had effectively required the appellant to answer for the company. In so doing she was lifting or piercing the corporate veil. It was the directors of the company not the appellant who were responsible for its management and control. The principle of corporate personality meant that even a 100% shareholder cannot generally be equiparated (sic) with a company whose shares he wholly owns. Yet that was essentially the approach taken by the Traffic Commissioner. Such a shareholder can be regarded as effectively the alter-ego of the company whose shares he owns if it is held that he its controlling mind. However, crucially, the Traffic Commissioner made no such explicit finding.”63.We do not seek to depart from what has been said in the above case law. But we are mindful that paragraph 1(2) of Schedule 3 to the Act requires a TC to have regard, amongst other things, to the previous conduct of the company or any of its officers, servants or agents, so long as it relates to the fitness to hold a licence (see above). That alone may justify the piercing of the veil with respect to such specified persons as it may be essential for it to be done so that the TC can perform his/her statutory duties. Further, it is apparent that there is no blanket bar to piercing the corporate veil for the purposes of inquiring into who is or might be the controlling mind of an incorporated applicant in the event of certain wrongdoing or impropriety. Such is often done in this jurisdiction in order to deal with a practice known as “fronting” whereby an applicant with a clean record might make a licence application, but the intention is that business operations conducted under the licence will be controlled by another who might not, if the application had been made in that others name, be given a licence possibly due to a poor track record within the industry regarding compliance or possibly due to his serving a period of disqualification. We appreciate that is not the situation which obtains here but the point is that wrongdoing can potentially justify the piercing. Further, what is envisaged in Vision Travel is an inquiry as to who is or may be the controlling mind of the company. We say that because the submission of Counsel accepted in Edward Coakely t/a CRA and in turn in Vision Travel (see above) was to the effect that where an explicit finding that a particular individual or entity is the controlling mind has been made, that person or entity (even if say a shareholder rather than a director, officer or servant) might be regarded as, in effect, the alter-ego of the company. 64.We are inclined to agree with Mr Clarke that the conclusion at paragraph 26 (vii) of the written reasons was essentially unreasoned or was made without sufficient in the way of clear factual findings to underpin it. We are inclined to the view that repute, in any event, has to be considered not in the context of any general moral distaste a decision-maker might feel for a particular business model or business practice, but rather in the context of whether an operator can or cannot be trusted to comply with the applicable licencing regime (see NT/2013/82 Arnold Transport and Sons Limited v DONI). But whether the TC did or did not err through piercing the corporate vale without making sufficiently clear and sufficiently justified factual findings to justify doing so (and without having to decide the matter we are inclined to think he did) it will be open to the next TC to do so, if considered appropriate, in accordance with what was decided in the above case law, and, of course in particular, what was decided in a transport context in the Vision Travel case.65.We have, as we have indicated, decided the TC erred through conducting what amounted to an unfair hearing and an unfair consideration of the application. Accordingly, the TC’s decision is set aside.