[2024] UKUT 22 (AAC)

The standard of proof is the balance of probabilities. In other words, what is more likely than not. This is succinctly explained in the STC’s Statutory Document 10:-

If the DTC has before him cogent and cohesive evidence, which he accepts, then he can find a fact proved, on the balance of probabilities. He can then draw inferences from found primary facts.

The DTC did not simplistically make a binary choice to accept the evidence of James Strathearn and Hana Simpson on the one hand and, on the other hand, to reject the evidence of Johanna Dunne, Gordon Dunne and Aaron Harrison. He carefully considered and weighed all evidence together, both oral and documentary. His consideration of the evidence and his reasoning are set out in detail in paragraphs 232 to 311 of his decision. Given Hana Simpson’s clear evidence, which was accepted by the DTC, about the setting up of CHL and Aaron Harrison’s involvement in that, the fact that there was no documentary evidence produced does not undermine that finding.

Reference was made by Mr Kelly to Document X3 as an example of Aaron Harrison being omitted from set up arrangements. This was an email from Lilian Wallace, an Executive Assistant and PA at DWS Building and Civil Engineering. Document X3 was among a string of emails about the setting up of CHL email addresses for James Strathearn, Gordon Dunne and Lilian Wallace. We do not consider this anything other than neutral. It does not undermine the acceptance of Hana Simpson’s evidence on the setting up of CHL and why the DTC reasoned he could accept that evidence.

Mr Kelly suggests that Hana Simpson had a motive to lie about the involvement of Aaron Harrison in the set-up of CHL. In his oral evidence he said the only explanation was the argument between James Strathearn and the Dunnes. However, if the argument was between them that does not explain why Hana Simpson would tarnish Aaron Harrison by falsely saying he was present at a set-up meeting. The DTC found Hana Simpson to be a credible witness, that her evidence was consistent with that of James Strathearn that he had worked with Aaron Harrison in the management of the transport activities of CHL from its inception, and that the documentation supported that assertion. He considered that Aaron Harrison had a motive for lying about his knowledge of the set-up of CHL. If he knew the arrangement was a front for a disqualified operator (James Strathearn) then he would risk losing his good repute as a TM.

We therefore reject the submission that the DTC was plainly wrong to reject Mr Harrison’s evidence on this issue as implausible.

As regards grounds 2 and 3, Aaron Harrison had worked for Gordon Dunne since 2007 (pages 199 and 170). Gordon Dunne described him as a trusted lieutenant (page 155 at 00:35:30). The DTC found that he had taken on the role of TM in CHL at the outset, It was accepted by Gordon Dunne that Aaron Harrison had assumed the role of TM by February/March 2020 (page 129). TE Stoner’s evidence was that in March 2020, she had made it clear to Johanna Dunne and Gordon Dunne that James Strathearn was a disqualified operator and should not be involved in the management of CHL (paragraph 290). Aaron Harrison sat in on the interview of Gordon Dunne by TE Stoner in March 2020 when the management of CHL was questioned. Given the background, the DTC was entitled to find that it was unbelievable that Gordon Dunne would not have made Aaron Harrison aware of the reason why James Strathearn’s role was being investigated. His reasoning is set out in paragraph 350 to 353 of his decision.

In considering whether the TM has lost his good repute, the DTC can take into account any matter. That includes conduct prior to the individual becoming the nominated transport manager that points to deceit and untrustworthiness. The DTC found that Aaron Harrison had been aware from the inception of CHL that it was a front for James Strathearn, a disqualified operator, and that Aaron Harrison was acting in the role of transport manager together with James Strathearn from the outset. Given those findings, Aaron Harrison was central to the operation. While it might go too far to suggest that he should have reported the situation to the OTC, given that he was working within a regulated industry, as soon as his role as de facto TM or nominated TM, and thus the eyes and ears of the OTC, coincided with his knowledge that a disqualified operator was concerned in the management of the operator, it was his duty either not to get involved at all or to withdraw from his role as TM. By continuing in post as TM, de facto or nominated, he was facilitating a fronting operation. We reject the 2^nd and 3^rd grounds of appeal.

Fronting is a form of deceit. It undermines the pillars of trust and fair competition on which the regulatory regime rests. TMs have to be aware that they cannot turn a blind eye to fronting operations. We did not understand that it was being argued that loss of repute was a disproportionate finding. Given the DTC’s findings of what was serious misconduct, a finding of loss of repute was not a disproportionate response. The DTC was therefore entitled to find that the 4^th appellant had lost his good repute as required by paragraph 14A(1)(b) of Schedule 3 to the 1995 Act. Disqualification was therefore mandatory (Footnote: ¹⁸).

Given the level of deception by the 2^nd and 3^rd appellants found by the DTC, it might be argued that the penalties imposed on the first three appellants were lenient (Footnote: ¹⁹). However, each case has to be considered on its own particular merits and circumstances. Aaron Harrison had a long association with Gordon Dunne and was regarded by him as a trusted lieutenant. Notwithstanding that the DTC acknowledged that Aaron Harrison had been in an invidious position, he is a transport manager and should be aware of his responsibilities within the regulatory regime. There is no finding that he was misled or deceived by Johanna Dunne or Gordon Dunne. Given the seriousness of the DTC’s findings regarding fronting, Aaron Harrison’s involvement in that and the finding that he had lied at two PIs, conduct which strikes at the very heart of the regulatory system, disqualification for a period of 12 months was not disproportionate.