Case No. UKUT-00148-(AAC)

24.We consider each of the Appellant’s five grounds of appeal in turn.Ground (1) - Requirement to produce documentation 25.The Appellant’s first ground of appeal was that the Traffic Commissioner erred in law in including the ‘requirement’ to produce the documentation in the calling in papers without there being an evidential basis to do so, thereby reversing the burden of proving compliance and landing that burden on the Appellant. Mr Backhouse submitted that nevertheless, in the interest of co-operation, the Appellant produced such documentation to the Traffic Commissioner, understanding that they were producing those documents to an impartial and independent inquisitor. 26.Mr Backhouse submitted that in reaching her decision, the Traffic Commissioner commented on the standard of documentation as summarised below: a) The similarity of the maintenance records to Titan Haulage Ltd as well as the sufficiency of detecting driver identified defects and the consistency of brake testing. b) Concerns in respect of the driver defect sheets and their authenticity. c) The TC expressed her own view that the picture in respect of the Appellant’s capacity to comply with the undertaking to ensure that vehicles are kept in a fit and serviceable condition is “disappointing” and did so with reference specifically to maintenance records produced for KX64TKZ. d) The Traffic Commissioner undertook a further review of produced maintenance documentation and defect sheets with reference to specific dates and with commentary on the sufficiency of brake tests. e) The TC identified as an aggravating factor “Safety critical deficiencies in the maintenance systems including the cited failings around brake testing, driver defect audit and lack of a robust retorque system.”27.Mr Backhouse submitted that the TC’s observations were made with reference to documentation that the Appellant provided in a co-operative manner, in response to a ‘requirement’ to produce documentation contained within the ‘calling in’ papers issued by the Traffic Commissioner in her role as an impartial inquisitor when in the medium of Public Inquiry. 28.This requirement was included in those papers despite there being no pre-notification of issues or allegation in respect of the standard of maintenance/drivers’ hours contained within those same calling in papers, nor was there any evidence from any DVSA Officer or other witness within the Public Inquiry material making any such allegation. 29.He submitted that in the absence of any evidence, witness or otherwise, and/or in the absence of any pre-notification that the production of the required documentation may give rise to an allegation under section 26 of the 1995 Act, the Traffic Commissioner had no evidential basis to include such a ‘requirement’ in the calling in papers, in particular, where there was no statutory power that allows her to include such a ‘requirement’ at all. 30.He submitted that by including such a ‘requirement’ without having an evidential basis to do so, the Traffic Commissioner reversed the burden to prove compliance and placed that burden erroneously on the Appellant to produce documentation to satisfy her that their vehicles and drivers’ hours systems are compliant – without her having any evidence to suggest that they were not. 31.He relied on the statement of Lord Justice Rix in the Court of Appeal in paragraph 69 of Muck It Limited, Hazel Merritt, Hayley Merritt v The Secretary of State for Transport [2005] EWCA Civ 1124 as below: “Turning back to sections 26 and 27 of the 1995 Act, I would conclude that for revocation to be possible under the former or mandatory under the latter, it is the commissioner who must be satisfied of the ground of revocation, and not the licence holder who must satisfy him to the contrary. That seems to me to be the natural way to regard both the language of those sections, and the situations contemplated in them. The context is that of a licence holder and the possible revocation of his licence. Revocation can only be done on some specified ground (section 26) or because one or other of the three fundamental requirements is no longer satisfied (section 27). Under section 26(4), the commissioner can only act if “the existence of” a ground comes to his notice. It is counter-intuitive to think of a licence holder being required to negative the existence of a ground raised against him. So with section 27. The commissioner must revoke if “it appears to him” that the licence holder is no longer of good repute or of appropriate financial standing or professionally competent. That seems to me to mean that the commissioner must be satisfied that the requirements are no longer fulfilled. If it had been intended to place the same burden on the licence holder as had been placed on the original applicant, then the same language as that found in section 13 would have been used.” Our analysis32.We are satisfied that there is substance and merit to this ground of appeal but in the manner it was originally put at paragraph 2 the grounds of appeal rather than the way it was presented in the skeleton argument and submissions. 33.We are satisfied that the TC erred in law in failing to afford the Appellant natural justice and procedural fairness in the conduct of the hearing and the reasons for revocation relied upon in the decision. There was a procedural flaw in the decision whereby the TC revoked the Appellant’s licence on grounds that were not identified in the calling in letter or in the brief for the PI (the case summary). The TC failed to identify in advance the grounds and evidence on which she sought to rely upon against the Appellant. This significantly prejudiced the Appellant which was not properly informed of the case it had to meet at the PI and was deprived of the opportunity to understand the case it had to meet in rebuttal to the evidence that it had volunteered but which was relied on upon against it. 34.While the TC did not reverse the burden of proof by relying on the evidence produced by the Appellant, she did rely upon a case for revocation against the Appellant without a prima facie case for revocation (or breach of section 26) ever having previously been established and having rejected the grounds for revocation which had been relied upon in the calling in letter.35.The brief notice of the TC’s concerns which was given to the Appellant at the hearing, identified at paragraph 14 of the decision, was insufficient in time (being only a few minutes) and lacked specificity as to the grounds which were then to be relied upon for revocation. An adjournment should have been granted if these points were to be relied upon for revocation with notice in writing of the specific points of fact and law in issue (a fresh calling in letter).36.The Appellant was unable to make the submissions at the PI that it now makes at paragraphs 4-9 of its grounds of appeal as to why there were no significant defects in its maintenance of vehicles and driver sheets and that the TC should not make any findings as to there being a re-writing of defect history or misleading the inquiry about checking driver hours (serious allegations akin to dishonesty). We are satisfied that if the Appellant had had the opportunity to make these submissions, these would have had merit and would have made a material difference to the TC’s findings and conclusions for the reasons that are now submitted at paragraphs 4-9 of the grounds of appeal.37.If the evidence produced by the Appellant itself had given rise to substantive grounds for revocation in breach of section 26, then the procedural irregularities identified might have been immaterial. However, for the reasons set out in the Appellant’s grounds of appeal at paragraphs 4-9, we are satisfied that the evidence did not support the TC’s findings and conclusion that the significant sanction of revocation should be employed. We are satisfied that the Appellant has demonstrated that the factual findings and evaluative conclusions set out in the decision to support revocation were, on balance, wrong.Ground 2 - The Traffic Commissioner’s analysis of the documentation 38.The Appellant’s second ground of appeal was that the opinion evidence presented by the Traffic Commissioner on the documentation produced as to the merits of the Appellant’s maintenance systems should have been produced as expert evidence from a suitable expert, which is typically provided by a DVSA officer’s report and oral evidence. There was no opportunity for the Appellant in the PI to challenge the evidence by cross-examination or even to challenge a specific area of expertise. In effect, the TC acted as her own witness.39.The Administrative Court decided in R. (on the application of Al-Le Logistics Ltd) v Traffic Commissioner for the South Eastern and Metropolitan Traffic Area [2010] EWHC 134 (Admin) at paragraph 92: “In AM Richardson v. BETR 2000/65 the Transport Tribunal accepted that the Traffic Commissioner is a public authority and thus subject to control by section 6 of the Human Rights Act 1988. The Tribunal also accepted that the nature of proceedings before a Commissioner involves the determination of civil rights and obligations and that a Traffic Commissioner constitutes an independent and impartial tribunal.”40.Mr Backhouse accepted in the Appellant’s grounds of appeal that the Traffic Commissioner is a specialist regulator and can therefore comment on records in the course of a hearing and come to a view as to their adequacy. However, he submitted that it should not be the case that prior to that hearing, the Traffic Commissioner undertook a detailed review of the documentation produced by the Appellant for the purposes of in effect providing her own opinion evidence to the inquiry before the hearing has started. Furthermore, she should not then rely on her analysis of that documentation carried out prior to the hearing and put opinions she has formed, based on her analysis, to the Appellant. The reason this is plainly wrong is that in so doing the Traffic Commissioner was becoming an expert witness in a hearing where she has a responsibility in law to adopt an impartial position as an inquirer. 41.He further submitted that to preserve impartiality and protect the Appellant’s right to cross-examine (see below), the Traffic Commissioner should have referred the analysis of that documentation to a DVSA Officer (as a recognised expert witness) and have invited that person to enter their findings into the evidence to be considered at the Public Inquiry – be that either by written evidence or by requiring that person to attend the hearing. He submitted that it was well within the Traffic Commissioner’s power to do this, it is perfectly normal for this approach to be adopted, and that this would have preserved her neutrality, independence and impartiality prior to the commencement of the hearing. Our analysis42.We are satisfied that there is merit to this second ground of appeal for the reasons submitted. The TC further erred in law by failing to provide procedural fairness at the hearing, when making her decision and giving her reasons.43.The TC relied on evidence against the Appellant that was not the product or subject of examination, investigation or presentation by any independent party (namely the DVSA) nor the subject of any adversarial argument of opportunity for evidence in rebuttal. She conducted her own analysis of the Appellant’s evidence without it having previously been identified as problematic or a ground for revocation, and which had not of itself justified a PI, thus ‘descending into the arena’ effectively acting beyond merely an inquisitorial manner but in a prosecutorial manner or as her own witness.44.We are satisfied that on the facts of this case, and from reading the Traffic Commissioner’s decision, that referral to the DVSA for independent analysis or at least setting out the grounds for revocation in advance of the hearing were the proper approaches that the TC should have adopted. By undertaking her own analysis of the evidence produced by that Appellant, without advance notice, and setting out her opinion evidence to the inquiry relying on that prior analysis, in effect, the TC was acting as her own witness in the Public Inquiry. 45.As Mr Backhouse accepted, the TC might be entitled to come to her own view as to the quality of paperwork provided by the Appellant in her role as an adjudicator but as a minimum, the perceived defects should have been notified to the Appellant in advance of the hearing so that it had a fair opportunity to address these grounds for revocation in submissions and evidence.46.Compounding the errors identified in Ground 1, the Traffic Commissioner therefore erred in failing to afford the Appellant a fair procedure by carrying out her own review of the maintenance evidence/documentation produced and, in effect, acting as her own expert witness against the Appellant (because the Traffic Commissioner was, in effect, giving opinion evidence to herself on the documents produced) in a hearing where the alleged defects she relied upon had not been previously identified or notified to the Appellant. Ground 3 Failure to allow the Appellant the opportunity to cross-examine a witness and test witness evidence 47.It was the Appellant’s third ground of appeal that the Traffic Commissioner erred in law and fair process by entering her own evidence into the Public Inquiry proceedings. Had the Traffic Commissioner referred the documents to the DVSA, as submitted in the Appellant’s second ground of appeal, then that DVSA Officer could attend the hearing, would be recognised as an expert witness to review such documentation, and the Appellant’s entitlement to cross-examination would be facilitated. 48.Mr Backhouse submitted that the Traffic Commissioner in this case essentially acted as her own witness, presenting her own conclusions at the hearing, relying on a prior analysis of documentation produced. 49.Paragraph 5(2) of Schedule 4 to the Goods Vehicles (Licensing of Operators) Regulations 1995 (“the Regulations”) reads as below: “(2) Subject to sub-paragraph (5), a person entitled to appear at an inquiry in accordance with paragraph 3 of this Schedule shall be entitled to give evidence, 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.”50.He submitted that by carrying out her own analysis of the documentation and relying on that analysis in the Public Inquiry, the Traffic Commissioner (to comply with the rights of the Appellant under the Regulations) should have allowed herself to become subject to cross-examination by the Appellant and/or the Appellant’s legal representatives. He accepted that under paragraph 5(3) of the Regulations, the Traffic Commissioner does have some discretion as to how witness evidence is entered into a Public Inquiry; however, he submitted that having allowed herself to enter her own evidence, the TC should have allowed the Appellant to challenge that evidence. The Appellant must have the opportunity as they would with any expert or qualified or specialist witness to cross-examine that person on their qualifications, methodology of their analysis, etc., and in this case the Appellant was not permitted to do so, as the opinion ‘witness’ was the Traffic Commissioner, who did not allow herself to be cross-examined. 51.Mr Backhouse submitted that it can be seen that the TC’s conduct of proceedings created a challenging position where the presiding decision maker expressed opinions on the documentation and the operator was likely to feel inhibited in challenging those opinions particularly where there is no expert witness to cross-examine. Our analysis52.We are not satisfied that this ground of appeal added anything to ground 2. In any event, the Appellant was not entitled to cross examine the TC.Ground 4 Reliance on the DVSA’s Guide to Maintaining Roadworthiness (GTMRW) and the Traffic Commissioner findings in respect of the Appellant’s maintenance systems 53.Mr Backhouse submitted as the fourth ground of appeal that the Traffic Commissioner’s decision to draw adverse conclusions in respect of the Appellant’s maintenance systems, and to conclude that there had been a breach of undertakings, only with reference to the GTMRW and with no other tangible evidence in front of her, was plainly wrong. 54.The Traffic Commissioner made findings that the Appellant had breached the undertakings on their operator’s licence relating to the proper maintenance of vehicles/trailers, thereby contravening section 26. The undertakings attached to an operator’s licence in respect of maintenance systems and document retention are to make proper arrangements to ensure that: “Records are kept (for at least 15 months) of all driver reports that record defects, and all safety inspection, routine maintenance and vehicle repair reports, and that these are made available on request;” “Vehicles and trailers, including hired vehicles and trailers, are kept in a fit and serviceable condition;” 55.Mr Backhouse made the point that these undertakings do not refer to the DVSA’s Guide to Maintaining Roadworthiness at all. 56.The Traffic Commissioner in her written decision stated: “10…The Guide to Maintaining Roadworthiness and linked documents are well known within the industry as crucial in ensuring systems are fit for purpose. The Guide's importance features in DVSA New Operator Seminars: one day Operator Licence Awareness courses and Transport Manager Refresher Courses.” 57.He submitted that whilst the GTMRW may well be well-known and the DVSA themselves may refer to it (which you would expect, given it is their document), there is no incorporation of that document in the undertakings attached to a licence. 58.He submitted that in referring to ‘mere’ guidance in the Grounds of Appeal, what is meant by the Appellant is that the guidance in question has not been subject to legislative scrutiny nor has it been made with reference to any statutory requirement to comply with it. The DVSA’s Guide to Maintaining Roadworthiness (“the GTMRW”) is, ultimately, a document published by the Driver and Vehicles Standards Agency to assist operators in achieving a compliant system, it is not and does not purport to be the bible of mandatory elements of the operator’s maintenance compliance systems. 59.As a result, Mr Backhouse submitted it was not an automatic breach of a statutory requirement, nor justification for an inevitable conclusion that arrangements are not satisfactory, where an operator does not implement everything in the GTMRW into their own compliance systems. Nor is there a requirement in the wording of the undertakings attached to an operator’s licence to implement what is said in the GTMRW. 60.He submitted, therefore, that if a Traffic Commissioner wishes to make adverse findings in respect of an operator’s maintenance systems, then they must have more tangible evidence in front of them other than, simply, the operator in question did not comply with the GTMRW. There must be sufficient proof that there is a failure in the operator’s systems causing, or clearly likely to cause, vehicles to be out on the road not in a fit and serviceable condition, i.e., the wording of the undertaking identified in this skeleton argument. Then the degree of divergence from the undertaking must be assessed to determine if any, and if so, what action may be required – revocation is not inevitable at all. 61.He made the same submission in respect of the binding effect of guidance in respect of the ‘Careless Torque Costs Lives’ documents regarding the retorquing procedures adopted. Our analysis62.We are satisfied that the TC was entitled to take into account and rely upon the guidance in TGMRW and other published guidance and this ground adds nothing of substance. The point is that the flaws and defects relied upon by the TC at paragraphs 17-21 of the decision were undermined by the points made at paragraphs 4-9 of the appeal grounds.Ground 5 - Failure to undertake a proper balancing exercise and failure to identify breaches/contraventions as grounds relied upon for revocation63.The Appellant’s fifth ground of appeal was that the Traffic Commissioner’s decision to revoke the Appellant’s operator’s licence was based upon the basis of a defective balancing exercise, was plainly wrong and her decision was perverse without providing specific reasons and/or breaches which she considered contravened section 26 of the Act. 64.The Traffic Commissioner in her written decision listed several positive and some aggravating factors in this case. Mr Backhouse submitted that the list of positives outweighs the aggravating factors in length and level of impact. 65.He therefore submitted that the Commissioner failed to undertake a proper balancing exercise to justify the revocation of the licence, in accordance with 2009/225 Priority Freight Limited and Paul Williams. The number of positives listed by the Commissioner are numerous with only a small number of negatives. The perceived systems issues could quite easily be resolved through education and the assistance of the Transport Consultant identified by the Commissioner. Our analysis66.We are not satisfied that there is any merit to the argument that there was any error of law in carrying out the balancing exercise in the sense that it is not a mathematical exercise. It is not the number of negative indicators relied upon that matter when compared to the positive indicators. It is the significance of those indicators. 67.Nonetheless, we are satisfied that there were errors in findings in relation to the negative factors that were relied upon. We accept Mr Backhouse’s submission that, in fact, there was positive arguments or evidence in front of the Traffic Commissioner at the Public Inquiry relevant to the Appellant’s maintenance and drivers’ hours systems, and those positive points are particularised at paragraphs 4 – 9 of the Appellant’s grounds of appeal set out above. 68.Further, the TC made a finding that the Appellant's director was not checking defect reports as he was unaware of the defect being crossed through on two of the documents produced to the Commissioner. We accept Mr Backhouse’s submission that a director of a Transport Company (or a Transport Manager for that matter) is not expected to audit and review every single document produced in the course of their operation. There is also no evidence at all to suggest that the defect being crossed through was a deliberate act to for example hide a defect (presuming this is the allegation being made) as it is not identified. Therefore, it was wrong to make a finding that the failure to see this crossing-out represents a significant failing.69.More fundamentally, we agree with paragraphs 18-21 of the grounds of appeal. The Traffic Commissioner has failed to identify in her decision which undertakings recorded on the licence have not been fulfilled, or if obliquely identified, has failed to identify the evidence of such a breach of section 26 (1) (f). The undertakings identified and included in this decision are only those which Mr Backhouse identified as being relevant undertakings in respect of maintenance and document retention. 70.The same point applied in relation to each of the other grounds relied upon by the TC for revocation at paragraph 1 of the decision. 71.In her decision, the Traffic Commissioner has failed to identify the condition that the Appellant has breached to justify the adverse finding under section 26 (1) (b). The Traffic Commissioner has failed to identify the statement of fact which was false or the statement of expectation that was not fulfilled to justify the finding under section 26 (1) (e). The Traffic Commissioner has failed to identify the material change in any of the circumstances of the Appellant to justify the finding under section 26 (1) (h). 72.These were highly material errors of fact and law which render the decision plainly wrong.