[2023] UKUT 184 (AAC)

Having summarised the evidence, the DTC dealt with the issue of whether JPT knew that the vehicle was being operated in contravention of s.2 of the 1995 Act in this way:

“17.

… I have reminded myself of the five categories of knowledge as established by the Upper Tribunal (paragraph 57 of the Senior Traffic Commissioner’s Statutory Guidance Document 7 refers. The first is actual knowledge.

18.

In considering whether there was actual knowledge that the vehicle was contravening the law, I bear in mind that the appellant is the company .. not any individual. For the ground of appeal to be made out, the company … must show that it had no knowledge of its vehicle’s illegal cabotage operations in the period 19-26 May 2022.

19.

I did consider Mr Perry’s evidence that the two planners had got things mixed up owing to exhaustion and a poor handover. But I was not convinced that a botched handover on Wednesday 25 May was a plausible explanation for illegal cabotage which began (according to both driver Mobbs and to DVSA’s analysis of the vehicle’s tachoscan data) on the evening of Monday 23 May. The evidence the planners did not know of the illegal cabotage is therefore very flimsy (to put it no higher).

20.

Having considered the evidence produced both in advance of and at the hearing, and irrespective of whether Messrs Dood and Groot had actual knowledge. I find that the company did have actual knowledge of this. The reasons for reaching this finding are:

i)

Driver Mobbs, who Mr Perry confirmed understood the rules relating to cabotage, knew that he was carrying out more than the two permitted cabotage journeys. Although not directly employed by (JPT) (he is employed through the UK company), he was the agent of the Dutch company in the week in question. The company’s agent knew that the vehicle’s schedule had passed into illegality during the week in question;

ii)

The schedulers in the Netherlands planned the incoming international journey on 18/19 May 2022 and (collectively) planned at least five cabotage journeys thereafter before the outgoing international leg due to take place on 26 May. Whether any individual scheduler knew that the permitted number of cabotage journeys was about to be exceeded or had been exceeded is immaterial. The fact is that the company as a whole had this knowledge and failed – whether through poor systems, miscommunication, human error or deliberate act – to prevent it.

21.

I have reminded myself of paragraph 59 of Statutory Document 7. This relates to the question of whether a company had taken steps to prevent illegal cabotage, which is not in fact the ground claimed in this application. However, it is worth citing at length because it illustrates starkly how insouciant the company has been in the face of the 2019 warning in causing or permitting further illegal cabotage operations since then.

22.

(the TC then set out paragraph 59)

23.

In re-reading this paragraph and its lengthy list of the kind of evidence which an appellant might be expected to produce, I am struck by the fact that (JPT) has not been able to produce any documentary evidence of any such actions. No evidence of journey planning systems or guidance, or of training for schedulers has been provided. No evidence of any investigation or any other action following the October 2019 warning letter from DVSA has been provided. No evidence of the discipling of the schedulers has been provided.

24.

As I mention above, the failure to provide such evidence is not strictly relevant to my finding that the company had actual knowledge of its transgression, but it illustrates the point that the company had actual knowledge of its transgression from October 2019 at the latest but failed to take any action to avoid a repetition and to design its systems to ensure that its servants and agents had the same knowledge which the company as a corporate entity had.

25.

(JPT) has failed to demonstrate that it did not know that vehicle 57-BK-V2 was being used during the period 19-26 May 2022 in contravention of Section 2 of the 1995 Act. That being the case, its application for the return of the vehicle is refused ..”

By way of an Appellant’s Notice dated 24^th August 2022, JPT set out three grounds of appeal:

“1.

The Applicant was not in breach of EU Regulation 1072/2009.

2.

The Deputy Traffic Commissioner took into consideration matters which he ought not to have taken (not further particularised); and

3.

The Applicant seeks clarification of the proper approach to be taken to an incoming international journey in which:

3.1

perishable goods are conveyed, and delivered, in specialised “cages” or stillages;

3.2

multiple deliveries are made from the one vehicle;

3.3

at each delivery point empty cages or stillages, delivered by the Applicant as laden cages or stillages on an earlier incoming international journey, are collected by the delivering vehicle for reuse by the Applicant; and

3.4

those empty cages or stillages are transported by the Applicant to his home country (sic) for reuse”.

Prior to the hearing of this appeal, both Mr Clarke and Mr Sasse submitted helpful skeleton arguments for which we were grateful and at the hearing, Mr Oliver appeared on behalf of JPT and Mr Sasse for the DVSA.

At the outset, it was confirmed by Mr Oliver that ground 1 had been abandoned. As for Ground 3, he frankly acknowledged that he may be in some difficulties in persuading the Tribunal to provide the clarification sought. We indicated without hesitation, that his analysis of the position was correct for the following reasons:

Ground 2 was re-presented as a new submission that the DTC had provided inadequate reasons to support the finding that JPT had “actual knowledge” that the vehicle was being unlawfully operated. Moreover, the DTC ought not to have found that Mr Mobbs was the agent of JPT and ought not to have determined that his knowledge of illegal cabotage could be taken to be the knowledge of the company. Mr Oliver sought permission to amend ground 2. Mr Sasse fairly conceded that by reason of the DTC’s equivocal wording in the last sentence of paragraph 20(ii) of his decision (see paragraph 16 above) and there being no clear-cut finding of dishonesty made by the DTC, Mr Sasse was in difficulties in defending that part of the DTC’s findings, although he wished to do so with respect to paragraph 20(i). In the event, he did not oppose the amendment sought.

It is JPT’s case that the DTC’s analysis of the facts was flawed. His finding that Mr Mobbs was an “agent” of JPT and that his knowledge of illegality could be ascribed to JPT had no basis on the evidence. There was no evidence that the driver held any office, had any decision-making authority or other control over the activities of the company. He was nothing more than a driver, employed by a different company who drove on a sub-contracting basis. The company held no “continuous and effective control” over his activities. In support of that submission, reference was made to paragraph 25 of Nolan Transport v VOSA & Secretary of State for Transport (2012) UKUT 221 (AAC) in which it was held that for the purposes of Article 8.3 of Regulation (EC) No. 1072/2009, “haulier” means the operator of the vehicle as opposed to the driver. Article 8 sets out the general principles which apply to cabotage. Moreover, whilst the TC was entitled to make findings about journey planning, in doing so he failed to engage in any reasoning so as to enable JPT to understand the adverse findings the DTC made on the company’s knowledge of illegality. Reference was made to paragraph 48 of Statutory Document 7 which indicates that when considering knowledge in impounding cases, “any other explanation put forward by the owner must be considered and assessed”. In this case, JPT’s explanation was dismissed as unconvincing and flimsy. However, the DTC failed to give any reasoning for that finding. That is important because paragraph 49 of Statutory Document 7 requires consideration of motivation for the operator’s conduct and that “circumstances which show that the owner’s conduct was inadvertent or accidental would mean that it was not wilful”. In describing JPT’s conduct in the way that he did, the DTC referred to different types of knowledge without considering each of the five categories of knowledge set out in Societe Generale Equipment Finance Limited v VOSA (2013) UKUT 0423 (AAC) and without determining which category of knowledge the conduct fell into. This was an important omission as descriptions such as “human error” or “miscommunication” could be categorised as conduct which was inadvertent or accidental and therefore “not wilful” and not dishonest (as would be required if the conduct fell within categories iv. and v. of knowledge as set out in Societe Generale) (supra). If the DTC had followed the process of considering the evidence and deciding which category it fell into, he would or should have concluded that the vehicle should have been returned.

By virtue of s.2 of the Goods Vehicles (Licensing of Operators) Act 1995 (“the 1995 Act”), it is a criminal offence to use a goods vehicle on a road for the carriage of goods, either for hire or reward or for or in connection with any trade or business carried on by the user of the vehicle without holding an operator’s licence.

The purpose of the impounding regime is to protect the public, improve road safety standards and ensure that operators compete fairly with other hauliers (see paragraph 261 of Nolan Transport(supra).

Everyone is taken to know the law, namely:

Every claim for the return of a vehicle under Regulation 4(3)(c) of the Regulations “raises a deceptively simple question, which the Traffic Commissioner must answer .. Has the claimant satisfied me that he, she or it probably did not know that the vehicle was being or had been used in contravention of s.2 of the 1995 Act?” (see paragraph 16 of Societe Generale) (supra). The burden of proof rests upon the applicant throughout to prove the negative and in the absence of any evidence capable of showing lack of knowledge of use in contravention of s.2, the applicant will have failed to discharge the burden of proof and there is no requirement for a TC to go further and embark on the process of deciding whether or not the applicant had actual, imputed or constructive knowledge of illegal use.

The starting point must be JPT’s history of illegal cabotage to which the DTC referred. There is a list of occasions in TE Hunt’s witness statement (pg 67 of the appeal bundle) when illegal cabotage had been found to have been committed by JPT. The first was in June 2019 when no action was taken by the DVSA. According to Mr Perry, he was aware of this stop. The second was in August 2019 when a driver fixed penalty notice of £300 was issued and resulted in the issuing of the impounding warning letter which was sent in October 2019 to JPT. Mr Perry was aware of this stop and of the warning letter. There were then two further stops in August and October 2020 when illegal cabotage was found to have taken place and again, no action was taken by the DVSA. Mr Perry gave equivocal evidence as to whether he knew about these stops and/or whether they had been investigated by JPT. Then crucially, after the relaxation of the cabotage rules came to an end in April 2022, there were further cabotage infringements between 2^nd and 16^th May 2022 before the vehicle was eventually impounded on 26^th May 2022. Mr Perry could not provide any explanation for those infringements and admitted that he had not investigated the circumstances in which they had occurred. Then there is of course, the illegal cabotage that resulted in the impounding. The only evidence before the DTC about the circumstances of this illegal cabotage was the admissions by Mr Mobbs and the bare assertions made by Mr Perry that the planners were reminded to abide by the rules in 2019, that driver and planning training had taken place, that a new electronic system was in the process of being installed. There was no documentary evidence before the DTC in the form of procedures, systems, training materials whether of drivers or planners, witness statements from Mr Mobbs and/or the planners and/or a director of the company, disciplinary records or indeed any of the types of documentation which a TC might expect to be provided with (and as set out in paragraph 59 of Statutory Document 7), which might have caused the DTC to accept the sole explanation for the illegal cabotage from 23^rd May 2022 as being human error or a “botched” handover on 25^th May 2022.

Of course, JPT’s explanation, even without taking account of the illegal cabotage history did not withstand close scrutiny. As the DTC correctly found, the explanation of a “botched handover” on 25^th May 2022 could not explain illegal cabotage which had commenced on 23^rd May 2022. In addition, the vehicle had been in the UK for eight days when it was stopped. The legal limit was/is seven days. There was no explanation for that save for the “botched handover” and the assertion that Mr Dood had wrongly assumed that Mr Mobbs had entered the UK on 23^rd May 2023. There was no evidence to support that assertion. Whilst it is submitted in Mr Clarke’s skeleton argument that the DTC failed to give reasons for rejecting the explanation given, we consider the DTC’s reliance on the timing of the commencement of the illegal cabotage and the timing of the handover to be adequate reasons for his rejection of the explanation along with the absence of any documentation as listed in paragraph 59 of Statutory Document 7 which might have shown systems in place to ensure that illegal cabotage did not take place, even by reason of human error.

Having rightly rejected the sole explanation for the illegal cabotage given by Mr Perry in bare assertions, the DTC was entitled to find that there was no evidence before him upon which he could be satisfied that JPT probably did not know that the vehicle was being used between 19^th and 26^th May 2022 in contravention of s.2 of the 1995 Act. Further analysis of JPT’s knowledge was not required and the DTC was fully entitled to refuse the application for return of the vehicle.

Nevertheless, the DTC then went on to find that JPT had actual knowledge of the illegal cabotage, giving his reasons in paragraph 20. It is accepted on behalf of the DVSA that the DTC’s reasoning contained in that paragraph cannot be supported, the DTC having referred to matters in paragraph 20 (ii) which are more indicative of the categories of knowledge in (iv) and (v) of paragraph 13 of Societe Generale (supra) which require additional findings of dishonesty, which the DTC did not then proceed to make.

So that leaves the DTC’s findings with regard to Mr Mobbs and determination that the driver was acting as an agent of JPT. What was available to the DTC in this regard was the admission made by Mr Mobbs to TE Hunt and the admission by Mr Perry in evidence that the former had been employed by the company for over 20 years. He was trained by JPT; he was disciplined by JPT; he drove the company’s vehicles; his work was scheduled by JPT planners and there was no evidence that he had any choice as to how or when he made the deliveries he was required to undertake. Moreover, he spoke daily to the planners in Holland and received instructions from them. For all intents and purposes, he was an employee of JPT and was under the continuous and effective control of JPT and its transport manager. The suggestion that this was not the case is misconceived. The suggestion that Mr Mobbs was being paid via another company (no evidence given and not explored) does not assist. If a conduit company was being used to pay Mr Mobbs in order to utilise the IR35 provisions to reduce the tax liability of both the driver and the employer, then that does not determine whether someone is in fact an employee, whether a “disguised employee” or not or self-employed or in some way at arms-length from JPT. The irresistible inference is that Mr Mobbs was a de facto employee of the company and there is no evidence to the contrary.

It matters not whether Mr Mobbs could have been characterised as an “agent” of the company in the circumstances of this case in addition/or in the alternative to being a de facto employee. Against the significant background of: the illegality found by DVSA officers since 2019; the absence of any documentary evidence upon which the DTC could be satisfied that JPT had all reasonable procedures in place to ensure criminal offences were not committed in the UK by itself and its drivers; the absence of any suggestion that Mr Mobbs was on a “frolic of his own” when he was stopped on 26^th May 2022; and the fact that illegal operations had been planned in Holland by the planners, the DTC was not plainly wrong to determine that the knowledge of Mr Mobbs could be imputed to the company. Even if we are wrong in our analysis, we nevertheless repeat that the DTC’s consideration of knowledge in this case was unnecessary by reason of the matters set out in paragraphs 26 to 28 above. His flawed reasoning as to actual knowledge in paragraph 20(ii) of his decision could not and should not be taken to undermine his primary answer to the “deceptively simple question” that he was required to answer which is set out in paragraph 25 above.

In all the circumstances this appeal is dismissed. We are not satisfied that the DTC’s decision was plainly wrong in any respect and neither the facts nor the law applicable in this case should impel the Tribunal to allow this appeal as per the test in Bradley Fold Travel Ltd & Peter Wright v Secretary of State for Transport (2010) EWCA Civ.695. The appeal is dismissed.