[2025] UKUT 073 (AAC)

The 1995 Act provides a single ground on which a Traffic Commissioner may refuse an operator’s request for its licence to be terminated - that the “commissioner is considering giving a direction in respect of the licence under section 26 or 27”.

In the case of a standard operator’s licence, it will often be obvious whether, for the purposes of section 16(4) of the 1995 Act, a Traffic Commissioner is considering giving a direction under section 27. This is because section 27(2) requires the Commissioner, before giving a section 27(1) direction, to give the licence holder a written notice “that he is considering giving such a direction”. However, section 27 only applies to standard licences and this case involved a restricted licence so that the Commissioner’s enforcement powers were those conferred by section 26.

Section 26 of the 1995 Act contains no requirement for the Commissioner to give prior written notice that a section 26 direction is being considered. However, enforcement action in respect of restricted licences does not arise out of thin air. At some point before taking action under section 26, a Commissioner begins the mental process of considering whether to take such action. It is a question of fact, to be decided on the evidence, whether such action is under consideration at the point at which a restricted licence-holder submits a request for its licence to be terminated under section 16(3).

In the present case, on 18 July 2023, which was nearly two months before the Appellant submitted his request to terminate his restricted licence, the OTC wrote to the Appellant seeking certain information. That letter ended with the words “A written response must be received by no later than 01/08/2023 or regulatory action may be taken against the licence”. The OTC papers contain no evidence that the Appellant did provide a written response by 1 August 2023. Instead, his first communication following the letter of 18 July 2023 was the surrender request in September 2023.

The only sensible interpretation of the term “regulatory action”, as used in the 18 July 2023 letter, is that it meant a direction under section 26 of the 1995 Act. On 18 July 2023, therefore, a direction under section 26 was in some sense under contemplation. Otherwise, there would have been no point in writing that letter. That letter made it clear that, in the absence of a written response by 1 August 2023, regulatory action may be taken. We think that a section 26 direction was probably under consideration, for the purposes of section 16(4), on 18 July 2023 but do not need to make a finding on that point. This is because the absence of any response from the Appellant by 1 August 2023 meant that, even if a direction under section 26 was not under consideration on 18 July 2023, it clearly was after that date. So far as the Traffic Commissioner’s regulatory state of mind on 2 August 2023 was concerned, the evidence admits of only one conclusion. The Appellant failed to heed a warning to do something by 1 August 2023 or “regulatory action may be taken” so that the Commissioner must on 2 August 2023 have been considering a direction under section 26. There is no evidence that anything happened between then and the operator’s surrender request to change the Commissioner’s regulatory state of mind. It follows that the Commissioner was not required by section 16(3) to accept the Appellant’s surrender request. Instead, section 16(4) gave the Commissioner discretion to accept or refuse the request.

The Traffic Commissioner’s reasons did not address whether regulatory action under section 26 of the 1995 Act was under consideration when the Appellant submitted his termination request. However, that was unnecessary. As we have just said, the only reasonable interpretation of the evidence is that, at the date on which the termination/surrender request was submitted, the Commissioner was considering giving a direction under section 26.

The Traffic Commissioner’s reasons made it clear why she exercised her discretion to refuse the Appellant’s request to terminate/surrender his licence. The Commissioner found that the surrender request was “just one part of a catalogue of steps taken to prevent uncovering the full extent of mischief happening in the background”. That was a reasonable, and lawful, reason for refusing to accept the Appellant’s surrender request. No doubt, the Commissioner was well aware that, if the surrender request had been accepted, she could not have given a disqualification order under section 28(1) of the 1995 Act because such orders may only be made in conjunction with a direction revoking an operator’s licence.

The upshot of the above is that, if the lawfulness of a Traffic Commissioner’s refusal to accept an operator’s request to surrender its licence may be challenged before the Upper Tribunal, it does not help this Appellant. The Commissioner had power to refuse to accept this operator’s surrender request under section 16(4) of the 1995 Act, and she exercised that power lawfully and reasonably. This was not a case in which a Commissioner was bound to accept a surrender request, nor can it be viewed as a case in which a Commissioner unlawfully exercised the discretion to refuse a request. We may now, therefore, turn to the Appellant’s appeal against the Commissioner’s direction revoking his operator’s licence and the disqualification order.