[2024] UKUT 22 (AAC)

James Strathearn was the holder of a standard national goods vehicle operator licence. He had traded as JS Haulage. The licence was revoked on 31 October 2018 on the grounds of loss of repute, loss of professional competence, material change, breach of the licence undertakings and false declaration. He was disqualified for five years from applying for or holding an operator’s licence, being a director or holding a controlling interest in a company or subsidiary which holds a licence and from operating any goods vehicles in partnership with a person who holds such a licence (Footnote: ⁵).

Forth Valley Commercials Limited (“FVC”) was incorporated on 4 July 2018. The initial director was Rebecca Strathearn, the sister of James Strathearn. She was later replaced by Eileen Strathearn, James Strathearn’s mother. FVC was a drivers agency.

Central Haulage Ltd (“CHL”) was incorporated on 7 February 2019. The sole director on incorporation was Hana Simpson. The shareholders in the company were Hana Simpson and Johan Thorburn George Dunne, otherwise known as Johanna Dunne.

As director of CHL, Hana Simpson applied for a standard national licence. The nominated transport manager (“TM”) was David Honeyman. CHL’s application was granted on 17 June 2019 with authorisation for 2 vehicles and 2 trailers.

On 27 August 2019 Johanna Dunne (under the name Johan Thorburn George Dunne) was appointed a director of CHL. Johanna Dunne is married to Gordon Dunne. Gordon Dunne is titled the Managing Director of CHL albeit he is not registered in Companies House as a director of CHL. The operator conceded that Gordon Dunne was a “de facto” director of the company.

On 10 March 2020, during a routine enforcement check, a DVSA Traffic Examiner (“TE”), Barry Wardrop, encountered one of the operator company’s vehicles being driven by James Strathearn.

TE Wardrop saw what he believed to be the operator company’s tachograph card in Mr Strathearn’s wallet. Mr Strathearn declined to show TE Wardrop the card, unless police were in attendance.

This encounter prompted DVSA Traffic Examiner investigations, which were complex and substantial. The investigations resulted in a public inquiry (PI) over 2 days on 30^th September 2021 and 1^st October 2021. DTC A R Seculer presided over the public inquiry (“the 2021 PI”).

The call-up letter for the 2021 PI alleged breaches of the undertaking to comply with the rules on drivers’ hours and tachographs. Eight drivers were called to conjoined driver conduct hearings.

The call-up letter also raised the issue of the role of James Strathearn in the set up and operation of the operator company, and posed the question whether Hana Simpson, as named director, was a “front” for James Strathearn. There were suggestions that Hana Simpson was the partner of James Strathearn, the driver/ disqualified operator.

The DTC issued a written decision (Footnote: ⁶). In paragraph 17 of the 2021 decision, he stated, “that the suggestion of “fronting” was the most serious issue facing the operator as this would suggest that the licence had been granted on the basis of deceit and would almost inevitably lead to loss of repute and revocation”. The DTC stated (at paragraph 27) that he had significant doubts over the role of Hana Simpson and the account given by Mr and Mrs Dunne as to how she came to be named as sole director of a haulage company when:

The standing of the named directors was further put into question by Hana Simpson then being replaced by Mrs Dunne as director. Mrs Dunne had no background in transport herself, was unable to answer any operational questions in 2020 and Gordon Dunne was clearly the operational mind of the business. He was not named as a director and despite assurances that he would be “within weeks” of the inquiry in October 2021, he had still not been added by the date of the PI in November 2022 and February 2023 (“the 22/23 PI”).

During the DVSA investigations in March 2020, and at the 2021 PI, Mr and Mrs Dunne both stated that they had no knowledge of a relationship between James Strathearn and Hana Simpson.

Johanna Dunne described Hana Simpson as a gym/mindfulness class friend she met independently of her husband or James Strathearn. She later found out about her (Hana Simpson’s) family background in Scotland and business aspirations.

Johanna Dunne stated to DVSA during the 2020 investigation that she had no knowledge of James Strathearn.

Gordon Dunne described Hana Simpson as an acquaintance of his wife who he had no involvement with initially, but then he became involved in the business proposition.

He knew of James Strathearn through a brief conversation at a Falkirk football match.

When asked by his advocate at the 2021 inquiry, “And as far as James Strathearn was concerned what involvement did you have with him?”, he replied, “I had none” (page 128, transcript of 2021 PI).

When asked by the DTC about the set up being a “front” for James Strathearn, Gordon Dunne stated, “I totally refute it and my wife, and I have worked very hard to start this business invested substantial sums of money and I’m talking over 1.2 million pound, and I wouldn’t want to have anyone else involved and if I’d known now, then I should have done more due diligence. But it’s., I totally refute that James Strathearn……”

As for James Strathearn, to the suggestion that Hana Simpson was a “front” for his involvement, this was emphatically denied by him. Not only did he deny any personal/romantic relationship, he denied even knowing Hana Simpson. He stated in interview on 28^th October 2020, when asked “Who is Hana Simpson?”, “Don’t know. Don’t know”.

At the 2021 PI, there was the following exchange between the DTC and James Strathearn (page 146)-

On the issue of fronting, in his decision after the 2021 PI the DTC stated:

The DTC determined the following: “Mrs Johanna Dunne and Mr Gordon Dunne appeared as experienced, respectable businesspeople. I could see no reason why their involvement in the licence needed to be concealed and indeed, Johanna Dunne was named (incorrectly) as a co-director on the application submitted by Hana Simpson on 3rd April 2019”.

The question was asked by Mr and Mrs Dunne’s advocate in closing representations; “Now I pose the question sir, having heard the evidence, what could Gordon Dunne, a man who has operated very large and complex businesses in the past, a man who is clearly intelligent, articulate and capable possibly want or need from James Strathearn?”

The DTC stated that on the information available to him, he could see no reason why Mr and Mrs Dunne would need Hana Simpson to “front” for them.

With regard to the DTC’s doubts and the burden and standard of proof, he stated at paragraph 29 of his 2021 decision;
“Case-law is quite clear that the more serious the allegation the more cogent the evidence needs to be, although proof remains on the “balance of probabilities”. Mrs Dunne and Mr Dunne were adamant in their denial of fronting and there is little doubt that since the early days of the licence Mr Dunne has been in operational control. Whilst there was a woeful lack of due diligence in the appointment of Hana Simpson as a sole director and David Honeyman as a transport manager, I do not find the suggestion of fronting made out to the required standard.”

The DTC stated that, crucial to that finding was the absence of a proven link between Hana Simpson and James Strathearn. At the 2021 hearing, the question of a relationship between Hana Simpson and James Strathearn was merely an assertion or suggestion. I took that to be outweighed by the categorical statements of Mr and Mrs Dunne and James Strathearn.

On 6 October 2021, the DTC approved the nomination of Aaron Harrison as TM, replacing David Honeyman.

Hana Simpson had not given evidence or attended the 2021 PI.

Following the 2021 PI, on 11 February 2022, James Strathearn contacted DVSA TE Beverly Stoner. On 25 February 2022 he had a meeting with TE Stoner. He told her that he and Mr and Mrs Dunne had lied at the public inquiry in 2021. He said that he was in a relationship with Hana Simpson, that he had been involved financially in the set-up of CHL and that he was significantly involved in the operations. He said that the drivers had lied at the 2021 PI at the behest of Gordon Dunne. This led to a further PI to re-consider the repute and fitness of the operator company and the approved transport manager, Aaron Harrison.

The PI was convened on 15 November 2022. The appellants were in attendance and represented. The PI was presided over by DTC Seculer. Counsel for CHL and Johanna and Gordon Dunne made a preliminary submission that the DTC should recuse himself. The DTC declined to recuse himself and issued a written decision (Footnote: ⁷).

The PI then proceeded before DTC Seculer with evidence and submissions being heard. The PI was heard over a total of 3 days, namely, 15 November 2022, 20 and 21 February 2023.

The DTC issued his decision on 24 April 2023. The DTC’s findings on the evidence are at paragraphs 228 to 311 of his decision.

The decision of the DTC

Grounds of Appeal