Neutral Citation Number: [2014] UKUT 0459 (AAC)                            Appeal No: T/2014/42

IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
(TRAFFIC COMMISSIONER APPEALS)

ON APPEAL FROM THE DECISION OF JOAN AITKEN, 
TRAFFIC COMMISSIONER for SCOTLAND, 
DATED 23 APRIL 2014

Before:
Judge M Hinchliffe, Deputy Chamber President (HESC); Judge of the Upper Tribunal.
Mr J Robinson, Member of the Upper Tribunal.
Mr A Guest, Member of the Upper Tribunal.

Appellant:
BRIAN ROBERT CUTMORE

Attendance:
For the Appellant: 	Mr P Symon, Trainee Solicitor.

Appeal heard at: 	George House, Edinburgh
Date of hearing: 	11 September 2014
Date of decision: 	13 October 2014

DECISION OF THE UPPER TRIBUNAL:

IT IS HEREBY ORDERED that the appeal be dismissed

Subject matter:	
Transport Manager – loss of repute. Indefinite disqualification.

Cases referred to:
None

REASONS FOR DECISION

1)	This was an appeal from the decision of the Traffic Commissioner for Scotland made on 23 April 2014 when she found that the appellant had lost his repute as a transport manager and disqualified him indefinitely from working as such for any operator.

2)	The factual background to this appeal appears from the documents, the transcript and the Traffic Commissioner’s decision and is as follows:
(i)	This case concerns two operators of which Mr Cutmore was transport manager. Mr Cutmore was also director of both companies.
(ii)	‘A Trip in Time Limited’ has held a standard national public service vehicle operator’s licence since December 2004, initially for one vehicle. It was a condition of the grant that the sole trader licence held by Mr Cutmore was surrendered. Further, because of the history of non-compliance in relation to local services, a condition was attached to the new licence preventing the company from operating a local service of any description until at least October 2007 – effectively a three-year ban on operating local services.
(iii)	The company was called to public inquiry again, on 18/9/2008 and 18/3/2009, following receipt of adverse reports from VOSA and North Lanarkshire Council. A number of regulatory orders were made and the licence continued.
(iv)	In November 2013 the Traffic Commissioner’s office was advised that the company no longer had permission to use its operating centre and no longer had sufficient financial assets.
(v)	Stonehouse Coaches Ltd was granted a standard international public service vehicle operator’s licence on 17/8/2005. In April 2012 Mr Cutmore was nominated as transport manager but, given that he had only a national CPC, the licence was changed to standard national. Again, in November 2013, the Traffic Commissioner’s office was advised that this company no longer had use of its operating centre. Stonehouse had registered six local registered services. During 2013 local services were monitored by VOSA and adverse reports received. The Traffic Commissioner was also concerned that she had not been kept informed of material changes.
(vi)	A conjoined public inquiry took place in Edinburgh on 25/2/2014. Mr Cutmore attended as director and as transport manager for both licences. Ms Stephanie Cutmore was also called up in her capacity as a director of Stonehouse at the material time covered by the adverse reports. The companies and Mr Cutmore were not represented at the public inquiry. Ms Cutmore was represented by a trainee solicitor, Mr Symon  (who appeared before us on appeal, representing Mr Cutmore).
(vii)	The VOSA evidence of bus monitoring in relation to ‘A Trip in Time’ found 100% non-compliance. In relation to Stonehouse, 61 instances of non-compliance were found following 80 observations, an overall non-compliance rate of 76%. In relation to one service, there was a 100% failure to operate. The VOSA examiners set out their findings in a report and spreadsheet that was copied to the operator. The operator failed to respond in writing but there was a conversation between the examiner, and Mr Cutmore. He made various comments and said that times were tough. A request was made for a written response, but nothing was forthcoming. Further intelligence revealed that Stonehouse was no longer operating, and this was confirmed by a further monitoring exercise. Overall, even when services did run, monitors saw unregistered journeys, passengers dropped off at places other than bus stops, instances where tickets were not issued despite money paid, and other irregularities over fare levels and concessionary charges.
(viii)	Other monitoring exercises of Stonehouse services were carried out by Strathclyde Partnership for Transport (SPT) and Transport for Scotland. The results also showed very poor service quality and fare payment irregularities.
(ix)	At the public inquiry Mr Cutmore told the Traffic Commissioner that he thought monitors had used the wrong timetable but this had not been mentioned previously when the report and spreadsheet were sent for comment, and Mr Cutmore did not bring evidence to support his assertions. The Traffic Commissioner specifically noted that, since he had not brought documentation to substantiate the points that he was making, it was difficult to follow his argument.
(x)	In her written decision the Traffic Commissioner concluded that Mr Cutmore was the controlling presence in respect of both licences and that there had been a pattern of delays and failures to notify material changes to the licence and, of course, there was a relevant adverse regulatory history. By the end of 2013 both companies ceased to have any operating centres and Stonehouse had lost financial standing, and so far as bus reliability was concerned, despite a few instances of misinterpretation and inappropriate adverse inference (which the Traffic Commissioner acknowledged), the overall picture revealed very serious and substantial non-compliance.
(xi)	The Traffic Commissioner found that services had become unreliable to the point of being unpredictable. The Traffic Commissioner did not find that the operators or their transport manager had established reasonable excuse for failure to operate local services in accordance with the timetables registered by the companies with the Traffic Commissioner’s office - notwithstanding a fire at the depot of ‘A Trip in Time’ in May 2011, and allegations of deliberate vandalism by competitors. In fact, the documentation showed efforts by the Traffic Commissioner to establish the specifics of the allegations of vandalism and intimidation, but nothing had been forthcoming.
(xii)	The Traffic Commissioner found that Mr Cutmore had lost his repute as transport manager. He had given many assurances at previous public inquiries, and had been given chances and warnings in the past. The Traffic Commissioner concluded that Mr Cutmore could not be trusted with a public passenger vehicle operator’s licence and, having disqualified the companies from holding an operator’s licence indefinitely, she found that she could not put a lesser time than ‘indefinite’ on any transport manager disqualification. The Traffic Commissioner said:
“I would not want him as a transport manager on any other entity for the same reasons as I do not want him to have an operator’s licence. I could not trust him with any other person’s entity and there might be the temptation on him to try and re-emerge as an operator if he was placed at the heart of any other operation. I cannot think of any rehabilitative measure which would restore the attitude of mind and fortitude towards compliance which is an essential characteristic for a transport manager”.
(xiii)	The Notice and Grounds of Appeal put forward on behalf of Mr Cutmore contend that “the sentence would have been less if legal representation had been present”; insufficient weight had been given to the threats and intimidation from competition in North Lanarkshire including vandalism to vehicles; monitors had used the wrong timetable, and there were no maintenance or drivers hours/tachograph issues.

3)	At the hearing of this appeal, the Appellant was represented by Mr Symon, who submitted a lengthy skeleton argument for which we were grateful. The central point made in relation to the previous operating history was that the adverse issues related to bus reliability rather than maintenance. The appellant had sat and passed his CPC qualification in order to improve his knowledge and competence in the bus industry. So far as the non-compliance with timetables and delivery of services was concerned, the key submission was that, during the relevant period, the appellant was operating in exceptionally difficult circumstances. A fire had taken place at the depot for ‘A Trip in Time’ in May 2011 and there followed a series of incidents consisting of threats and intimidation. On 18/10/2013 solicitors acting for both companies had requested permission to cancel certain services without giving the required period of notice, but this request was refused (see below).

4)	In his written submissions, Mr Symon argued that, in finding that the appellant had lost his repute, the Traffic Commissioner had failed to have proper regard to the circumstances and had taken a “merely statistical approach in viewing the operator’s compliance history”. Mr Simon further submitted that repute should not have been lost and that indefinite disqualification was a disproportionate sanction. Finally, Mr Simon suggested that the Traffic Commissioner had failed to conduct a proper balancing exercise and, in particular, had failed to take account of the absence of any legal representation for the appellant, nor the good previous history of maintenance compliance. 

5)	At the hearing, the tribunal asked Mr Symon what point or argument would or could have been put forward on behalf of Mr Cutmore, had he been professionally represented, that would or could have made any difference to the outcome. Mr Simon said that, from his analysis of public inquiry outcomes, regulatory action appeared to be less severe where those called up had legal representation. Mr Simon thought that if Mr Cutmore had been legally represented, the Traffic Commissioner would have had her direction focused more forcefully upon the absence of maintenance/drivers hours irregularities, the lack of bad faith and the need to conduct a balancing exercise.

6)	So far as a request for short notice cancellation was concerned, the tribunal put to Mr Symon that, in response to the request, dated 18/10/2013, the Traffic Commissioner’s office had replied that, although she refused the request, this was because:

“It is not at all obvious why the full notice period was not given. She (the Traffic Commissioner) will reconsider if further information is provided and clarification given in relation to the remaining registrations and the operator’s business intentions. In addition, the Traffic Commissioner requires the alleged hostile competitors to be identified. The Traffic Commissioner is not clear as to which operators are considered by the applicants to be involved, nor why the operator links this to bus operation”.

7)	No reply to this request for further information was received. Mr Symon explained that this was because Mr Cutmore was “in a bit of a tailspin”. This also explained why the timetable issue had not been raised with the monitors. Mr Symon contended that the Traffic Commissioner’s decision was disproportionate. He referred the tribunal to well-known jurisprudence including Brian Haulage, even though this relates to the revocation of an operator’s licence rather than to decisions in relation to a transport manager.

8)	Whilst commending Mr Symon for his hard work, effort and diligence in putting forward the best arguments possible on behalf of Mr Cutmore, we find no merit in his submissions. The totality of the regulatory history can only lead to the view that Mr Cutmore had a very poor reputation within the industry, including the previous failure to operate local registered services – and, by the time of the monitoring exercises in 2013, his reputation as a transport manager hung by a thread.

9)	We are satisfied that the Traffic Commissioner took proper account of the fire in 2011 and, at the end of the day, local services registered by Mr Cutmore’s companies were not imposed upon him. The timetabled services were those that he elected to register and undertook to operate. Since the fire in 2011, there had been ample time to vary timetables by giving proper notice, as there was throughout 2012 and 2013. There continues to be no persuasive explanation for failures to keep the Traffic Commissioner’s office informed of various changes and developments and, if necessary, to relinquish or vary services in good time. The evidence presented to the Traffic Commissioner showed that the public were let down to a very great extent and, in any balancing exercise, the harm, inconvenience and distress caused by the failure to operate advertised and registered local services must carry significant weight. We do not think that being in “a bit of a tailspin” is an excuse or, even, a sensible explanation.

10)	The fact that this public inquiry was not concerned with maintenance or drivers hours/tachograph irregularities seems, to us, to be neither here nor there. Whilst the situation could, of course, have been worse, it was in our judgement bad enough to justify the regulatory action taken. Given the totality of the evidence, and the absence of stable and established centres of operations or, in the case of one company, appropriate finance, we consider that revocations of the companies were inevitable as were the disqualifications. These companies deserved to be put out of business and to have no prospect of being revived – at least not without a further and successful application being made to the Traffic Commissioner for any indefinite disqualification to be lifted.

11)	We do not think that a businessperson who chooses not to be represented before a commercial regulator can subsequently complain that they were disadvantaged by not having representation. Mr Symon could not point to any instance where the lack of representation prejudiced Mr Cutmore, and could not identify any area where representation would clearly have made a difference. 

12)	It is not open to an operator or transport manager to suggest that an incorrect timetable has been used if, first, they failed to draw the monitor’s attention to this when sent the initial report and spreadsheet and, second, they failed to establish the fact by persuasive evidence at public inquiry. Certainly on appeal, when the evidence could have been submitted much earlier, it is not something to which we can attach any weight. Even if new evidence had been offered to the tribunal, which it was not, we would not have been able to admit it because it could have been put forward earlier. Consequently we, like the Traffic Commissioner, must proceed on the basis that the failure to operate local services was properly established by reference to the registered timetables used by the monitors.

13)	The decisions appealed against relate to Mr Cutmore, and the correct approach with regard to transport managers has recently been explained in a number of tribunal decisions. In the present case, the Traffic Commissioner found that Mr Cutmore had lost his repute as a transport manager and we consider that, following an appropriate balancing exercise, there was an adequate evidential basis for such a finding. The Traffic Commissioner considered that the appellant was not fit to be a transport manager for any operator. Such a conclusion is consistent with the applicable framework.

14)	Regulation (EC) No 1071/2009 of the European Parliament and of the Council provides:

Article 14
Declaration of unfitness of the transport manager
1. Where a transport manager loses good repute in accordance with Article 6, the competent authority shall declare that transport manager unfit to manage the transport activities of an undertaking …

15)	The Goods Vehicles (Licensing of Operators) Act 1995 (as amended) provides:

Schedule 3

Determinations in respect of transport managers

16(1) In proceedings under this Act or the 2009 Regulation for determining whether a person who is a transport manager is of good repute or professionally competent, a traffic commissioner must consider whether a finding that the person was no longer of good repute or (as the case may be) professionally competent would constitute a disproportionate response.

(2) If the commissioner determines that the person is no longer of good repute or (as the case may be) professionally competent, the commissioner must order the person to be disqualified (either indefinitely or for such period as the commissioner thinks fit) from acting as a transport manager.
           …

Transport managers: cancellation or variation of disqualification order

17(1) The traffic commissioner by whom a disqualification order is made under paragraph 16(2) may, subject to sub-paragraph (2), at any time cancel the order or, with the consent of the disqualified person, vary the order.
…

16)	It follows that if a Traffic Commissioner finds that a transport manager has substantially failed in his or her duty to maintain continuous and effective control of an operator’s fleet of vehicles, the remedy is to consider (and where appropriate find) loss of repute as a transport manager. This is exactly what the Traffic Commissioner did. She went on to declare that transport manager unfit to manage the transport activities of an undertaking and ordered the appellant to be disqualified indefinitely.

17)	Although an indefinite disqualification appears to be draconian, the position is in fact tempered by the power under Paragraph 17(1) to cancel or vary the disqualification.

18)	We are satisfied that the Traffic Commissioner’s approach was both lawful, and proportionate. Although the Traffic Commissioner could not think of a remedial measure, this does not prevent Mr Cutmore from first taking steps, in a capacity other than transport manager, to develop the skills he will need in order to run a bus operation compliantly and then, after a period of time, to come back to the Traffic Commissioner to demonstrate that he has learned lessons and can be trusted. His regulatory history in relation to maintenance and other areas will be relevant. The Traffic Commissioner will then consider the position as at that time.

19)	The appeal is dismissed.

Judge Mark Hinchliffe, DCP
13/10/14