[2024] UKUT 226 (AAC)

Mr Backhouse presented the submissions on behalf of the Appellant at the appeal hearing. It was agreed by all parties that the sub-contracting of vehicles and of work arrangements is lawful per se. The Appellant had set up a sub-contracting arrangement with Forth & Clyde Logistics in mid-2022. It was accepted that the arrangement between the Appellant and Forth & Clyde Logistics was a conventional sub-contracting arrangement, and it was submitted that this was the intention for the arrangement between the Appellant and Mr Bett. This intention was frustrated when Mr Bett struggled with his bank account and his health, which meant that in order for the sub-contracting arrangements between them to work, the Appellant had to effectively become Mr Bett’s bank and take charge of some arrangements. This, it was submitted, was the reason why the Appellant was paying the drivers, paying for maintenance and repairs. It was conceded on behalf of the Appellant, at the hearing, that the relationship between he and Mr Bett was not a conventional one. However, it was submitted that this was not done to unlawfully circumvent any rules, but rather to benefit both businesses.

The Appellant submitted that the DTC was plainly wrong to find that the “user” of the vehicles, who must hold the operator’s licence, was the Appellant in this case. The Appellant relied on the Court of Appeal judgement in Interlink Express Parcels v Night Trunkers Ltd [2001] EWCA CIV 360 (“Night Trunkers”) to make his point. It was decided by the Court of Appeal that the drivers employed by Night Trunkers were the “servants” of parcel delivery company, Interlink, while driving Interlink’s vehicles. Although Night Trunkers employed the drivers, paid wages and managed discipline etc., Interlink had overall control of the operation and were therefore the “user” of the vehicles on the Interlink licence. It was submitted in the current case, that while the Appellant may have been providing the finance and some other assistance for the arrangement between he and Mr Bett, Mr Bett still had residual control over the drivers, therefore Mr Bett, as “the person for whom the driver was servant or agent”, was the “user” of the vehicles on his licence, in accordance with sections 2 and 58 of the Act. If Mr Bett was found to be the “user”, by applying the principles in Night Trunkers, the arrangement was a lawful circumvention of the curtailment and that would bring an end to the matter. The Appellant submitted that the DTC did not consider the test in Night Trunkers at the PI, and this made his conclusion, that the Appellant was the “user” of the vehicles on the licence, “plainly wrong”.

In the event, that the Upper Tribunal did not find in the Appellant’s favour on this point, then Mr Backhouse submitted that the disposals remained to be considered. In this regard, it was submitted that the Appellant had not been given the opportunity to make representations on these potential disposals at the PI and such a procedural irregularity made the disposal decisions of the DTC “plainly wrong”. The Appellant’s main argument was that the focus of the DTC’s decision was based on the notion that the parties had set up their business arrangement for a negative purpose, to unlawfully circumvent the curtailment. By using the term circumvention in that negative sense, the DTC, it was submitted, misdirected himself as to the severity of the issue before him, which in turn led to the disproportionate disposals. It was reiterated that the Appellant had intended to create an entirely typical sub-contracting arrangement between he and Mr Bett but circumstances frustrated these efforts. To support his submission that the arrangement was a genuine one, the Appellant highlighted the fact that he had another, more conventional, sub-contracting arrangement in place with Forth & Clyde Logistics. He pointed out that Mr Bett had applied for his licence before the Appellant’s licence was actually curtailed. Additionally, the Appellant cooperated fully with the investigation, and was responsible for offering up all the evidence that the DTC then used to find against him. He also highlighted the fact that circumventing a curtailment, for example through sub-contracting, is perfectly legal.

It was suggested on behalf of the Appellant, that there were other options available to the DTC such as further curtailment of the licence, suspension of the licence and prohibition from the Appellant’s vehicles being specified on other licences. Even if revocation was the only option for the DTC, it was submitted that the ten year duration of the disqualification as operator was excessive. The DTC could have, it was submitted, revoked the Appellant’s licence, disqualified him as a licence holder for a shorter period of time, thereafter permitting a fresh licence to be applied for.

It was accepted on behalf of the Appellant that disqualification as a transport manager was appropriate in the circumstances, as something of a “middle ground”, which would require the Appellant to employ a different transport manager, and have an independent person assist with the operation, before continuing his operation. It was submitted however, that the indefinite disqualification as transport manager was entirely unreasonable, and a much shorter disqualification would have sufficed.

The Appellant concluded with a submission that failing to hear representations on the disposal of the case amounted to a fundamental procedural unfairness which was “fatal to that element of the DTC’s decision” and rendered it “plainly wrong”. It was submitted that the Upper Tribunal should either remit the matter to be re-determined by a different TC, or should remake the decision, substituting the revocation for a suspension for the licence for a period of one month, while removing the disqualification from holding a licence, thus allowing the Appellant to continue operating after the one month period and when an alternative transport manager was appointed.