Central Haulage Limited & Ors

This is an appeal from the decision of the Deputy Traffic Commissioner (“DTC”) for the Scottish Traffic Area given on 24 April 2023. The decision of the DTC is summarised as follows:

The appeals were considered at an oral hearing at which the appellants were in attendance and legally represented, as noted above. There are two bundles of papers for this appeal. The bundle relating to the first three appellants comprises 2462 pages (“the CHL bundle”). The bundle for the 4^th appellant has 2349 pages. The latter bundle is referred to the “Master” bundle. Unless otherwise stated, any page numbers referred to will be in the Master bundle.

Section 2 of the Goods Vehicles (Licensing of Operators) Act 1995 provides that no person shall use a goods vehicle on a road for the carriage of goods, for hire or reward, or in connection with any trade or business carried on by him, except under a licence issued under the Act.

There is a requirement that the holder of a standard licence must be of good repute. This is set out in mandatory terms in Article 3 of EU Regulation 1071/2009 and sections 13 and 13A of the 1995 Act. “Good repute” is determined in accordance with paragraphs 1 to 5 of Schedule 3 to the 1995 Act.

Section13A(2)(d) sets out the requirement to be professionally competent. Section 13A(3) makes provision for appointment of a transport manager. The transport manager must be of good repute and professionally competent (Footnote: ¹).

In determining whether a transport manager (“TM”) is of good repute, the traffic commissioner (“TC”) may take into account any matter (Footnote: ²). If the TC finds that a TM has lost his repute, disqualification from acting as a TM is mandatory (Footnote: ³).

Once a licence has been granted the requirements of sections 13 and 13A, among other conditions, are continuing obligations that require to be met throughout the lifetime of the licence (Footnote: ⁴).

Section 27 provides that a TC must direct revocation of a standard licence if it appears to him that the licence holder no longer satisfies one or more of the requirements of section 13A. This would include loss of good repute.

The factual background to this appeal appears from the documents and the decision of the DTC and may be summarised as follows:-

The DTC’s considerations and conclusions are at paragraphs 312 to 372 of the decision. He concluded that there had never been a genuine business plan between Johanna Dunne and Hana Simpson to establish a haulage company; that the enterprise was always a business arrangement between Gordon Dunne and James Strathearn to provide the former with an investment opportunity, and to provide the latter with a route back into the industry, whilst both, for different reasons, stayed under the radar. To that extent, the obtaining of the licence, he concluded, was based on deceit. Hana Simpson was a front for Gordon Dunne and James Strathearn. He found that Gordon Dunne knew, when the venture was first discussed, that James Strathearn was a disqualified operator. He found that James Strathearn had contributed £6250 to the set-up of the business being a half share in the financial standing requirement and had a role in the management of the transport operations of the business.

The DTC accepted the evidence of Hana Simpson that Aaron Harrison had been present at meetings in 2019 when Johanna Dunne, Gordon Dunne and James Strathearn were discussing the creation of the operation (paragraph 248). He found that Aaron Harrison knew that James Strathearn was a disqualified operator and that he was engaged in a management role in the business. He worked alongside James Strathearn in a management role with that knowledge. Aaron Harrison attended an interview by DVSA TE Beverly Stoner of Gordon Dunne and said nothing while Gordon Dunne gave evidence that he, Aaron Harrison, knew to be false, about the role of James Strathearn. He did the same at the 2021 PI. The DTC concluded therefore that Aaron Harrison helped to mislead the DVSA and the TC. The DTC found that Aaron Harrison knew that Hana Simpson was a director in name only, and why. He had therefore lost his good repute as required by paragraph 14A(1)(b) of Schedule 3 to the 1995 Act.

The grounds of appeal for the first three appellants are at pages 2383 to 2397 of the CHL bundle. The grounds of appeal for the 4^th appellant are at pages 2303 to 2311. In addition, the parties submitted skeleton arguments, and lists of authorities with hyperlinks, for which we are grateful.

The first ground of appeal is the apparent bias of the DTC. The DTC had presided over the 2021 PI and while he did not hold fronting proved, he had been critical of the 2^nd and 3^rd appellants and of James Strathearn. The DTC had been asked to recuse himself on the grounds of apparent bias. By declining to do so, he had erred in law.

The second ground of appeal concerns the status of James Strathearn at the PI. It is submitted that he had variously been treated by the OTC as a witness, party and potential shadow director of CHL. The first three appellants understood that James Strathearn had been sent copies of the briefs and other documents produced by the OTC, productions lodged by the appellants and the statements of Johanna Dunne and Gordon Dunne. It was submitted that James Strathearn was, in fact, a witness. It is submitted that the DTC’s inconsistent treatment of James Strathearn was unfair and contravened the rules of natural justice and the appellants’ rights under Article 6(1) of the European Convention on Human Rights. (“the ECHR”). By treating James Strathearn as a party and allowing him sight of the brief, productions and statements, he had an opportunity to tailor his evidence. His partner, Hana Simpson, also had such an opportunity. This resulted in the appellants receiving an unfair hearing contrary to the principles of natural justice and contravening their rights under Article 6(1) of the ECHR.

Ground 1: The DTC found that the 4^th appellant had been involved in the set-up of CHL and, as such, implicated and thus “he failed in his duty to decline the involvement and inform the TC” (paragraph 370 of the decision). It is submitted that the DTC was plainly wrong and misdirected himself on the evidence and/or the law in concluding (1) that the fourth appellant was involved in the set up and (2) he failed in his duty to the Traffic Commissioner. There was insufficient evidence for this finding. It was incorrect to state that Hana Simpson had no motive (paragraph 348) given the evidence of Mr Strathearn.

Ground 2: The DTC concluded that the 4^th appellant had been deceitful throughout from 2019. The 4^th appellant’s evidence was that James Strathearn had not breached the conditions of his disqualification. The DTC had failed to state when the 4^th appellant failed in his duty; the 4^th appellant not being the nominated transport manager until October 2021. Furthermore, it was submitted that the test for the transport manager and the assessment of the duty to the traffic commissioner has to be subjective. The question of whether the evidence given by Gordon Dunne and Johanna Dunne was false, was only determined by an experienced DTC after three days of evidence (paragraph 369). Whilst it is accepted, that transport managers are the eyes and ears of traffic commissioners, transport managers are not expected to act as de facto traffic commissioners, and make findings of fact, and as such the DTC erred in law.

Ground 3: It is submitted that the DTC was in error of law, and plainly wrong, in concluding that the fourth appellant’s position at the PI, that he was sufficiently remote from management and administration of the company should a finding of fronting be made out, was not arguable, given that the fourth appellant was involved in the set up (paragraph 367). There is no suggestion that the fourth appellant was a de facto or shadow director of the operator. It is submitted that the expectations on a transport manager are not clear in such a situation (paragraph 371). Having arrived at the conclusion there was fronting, the DTC had to assess how remote, or otherwise, the appellant was from the purported fronting. This he failed to do.

Ground 4: Further, it is submitted that the DTC erred in disqualifying the 4^th appellant for 12 months which is disproportionate and excessive. The DTC failed to draw a distinction between disposal of the operator’s case and the 4^th appellant’s case.

At the commencement of the appeal hearing, we heard an application made on behalf of the Secretary of State for Transport to be added as a respondent to the appeals by the first three appellants only. The Secretary of State had no submissions to make in respect of the 4^th appellant.

Following the DTC’s decision, the appellants had intimated their intention to appeal to the OTC and sought a stay of the decision. This was duly granted. The DTC advised the case worker that the decision and the appellants’ intention to appeal should be intimated to the Senior Traffic Commissioner. Notices of Appeal were timeously lodged with the Upper Tribunal and the case was set down for hearing on 12 December 2023.

On 6 December, correspondence was received in the office of the Administrative Appeals Chamber of the Upper Tribunal from the Office of the Advocate General for Scotland stating that an application was being prepared on behalf of the Secretary of State for Transport to be added, albeit late, as a respondent to the appeal. The application, together with a skeleton argument on the merits of the appeals, was received on Friday 8 December.

Paragraph 5 of the Schedule to the Tribunal Procedure (Upper Tribunal) Rules 2008, provides that the appropriate national authority, and any other person to whom the Upper Tribunal has sent a copy of the notice of appeal may apply for a direction under rule 9(2) to be added as a respondent. The application under paragraph 5 must be sent or delivered to the Upper Tribunal so that it is received within 14 days of the date that the Upper Tribunal sent a copy of the notice of appeal to the person making the application (Footnote: ⁸). Paragraph 7 provides that if a person makes an application in accordance with paragraph 5 and 6, then the Upper Tribunal must give a direction under rule 9(2) adding that person as a respondent.

Mr Tosh informed the tribunal that a copy of the notice of appeal had been sent to the Secretary of State for Transport, the “appropriate national authority” in the present case, on 13 June 2023. No application under rule 9(2) had been made within the period provided in paragraph 6. He therefore sought an extension of time to lodge the application under rule 5(3) or, if that was inapt, then waiver under rule 7.

Mr Tosh explained that the Secretary of State for Transport did not ordinarily participate in appeals against decisions of traffic commissioners, unless some issue of principle or of other significance (such as an allegation of bias) was raised. In that event, there was a protocol in place between the offices of the Secretary of State for Transport, and the Office of the Traffic Commissioner, that the latter will notify the former of the significance of the appeal in order that the applicant may apply to be a party to the appeal. In this case, that protocol had not been followed. He explained that there had been recent changes in staff in the OTC and pressure on resources which appear to have caused or contributed to the failure to follow the normal protocol. As a result, the significance of the issues raised by the present appeal were not appreciated until recently.

Regarding the addition of the Secretary of State for Transport as a respondent, Mr Tosh submitted that the tribunal would have had no discretion and would have been required to give a direction under rule 9(2) adding the Secretary of State for Transport as a respondent had the application been made timeously. The appeal makes allegations of bias and unfairness. If sustained, the decision on the appeal might have a wider impact on the conduct of proceedings before TCs generally. In those circumstances, it was appropriate that a contradictor was available to ensure that the issues were fully argued and ventilated before being determined. That would be consistent with the overriding objective in rule 2(1) to enable the tribunal to deal with cases fairly and justly. He submitted that it should be a rare case where the door of the tribunal should be closed to a party with title and interest. Mr. Tosh referred to the case of Melvin Murray t/a Melvin Murray Transport (Footnote: ⁹) in which the Upper Tribunal had exercised its discretion under rule 7(2)(a) to waive the requirement to comply with the time-limit under paragraph 6. Finally, Mr Tosh stated that he did not seek an adjournment if the application were granted.

The application was opposed by Mr Adams. He submitted that the tribunal should only exercise its discretion under rule 7(2)(a) if it was satisfied that it was just in the circumstances to do so. Mr Adams submitted that the DTC had put the caseworker on notice that this case should be intimated to the STC on 17 May 2023, that was a week before the notices of appeal were lodged. Thereafter nothing was done for 6 months. No good reason had been given for the failure. Even in the absence of a contradictor, the appellants still had to persuade the tribunal of the merits of the appeal. To some extent, the tribunal was the contradictor. Therefore, the lack of a contradictor was not a persuasive factor. The late submission of the application and skeleton argument for the Secretary of State for Transport had required additional work to be done by the 1^st to 3^rd appellants’ legal team in the day prior to the hearing. That had caused additional expense.

Mr Adams submitted that the courts often give considerable leeway to public bodies. However, there is authority that public and private litigants should be treated equally. SN v Secretary of State for the Home Department (Footnote: ¹⁰) which considered the principles to be applied when an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order. The case concerned an application for strike out under rule 8 of the 2008 rules following a number of egregious failures by the appellant’s solicitors. Reference was made in that case to the principles set out in the cases of R (Hysaj) v Secretary of State for the Home Department (Footnote: ¹¹) and Mitchell v News Group Newspapers (Footnote: ¹²). The court in R (Hysaj) said all the circumstances of the case should be considered as listed in the Civil Procedure Rules 1998 (“CPR”) rule 3.9 and have regard to the Mitchell principles. The Mitchell principles state:-

The court in SN also referred to Denton v White [2014] EWCA Civ 906, which concerned an application to extend time in the wake of a failure to file a notice of appeal within the time prescribed by CPR 52.4(2). In its judgment the Court stated, at [24]:

Mr Adams referred to Brogan v O’Rourke Ltd (Footnote: ¹³) for an example of the court refusing to exercise the dispensing power in rule 2.1 of the Rules of the Court of Session. In that case, a pursuer’s solicitor had failed to have a summons in a personal injuries action called within three months and a day after the date of signeting. Rule 43.3(23) provides that where the summons is not called within that period then “the instance shall fall”. The court commented that the rules of court were “… designed to serve the interests of justice, by ensuring, inter alia, that cases are dealt with expeditiously, without undue expense, and without undue demands on the resources of the court. The interests of justice are not well served by an approach which too readily excuses failure to comply with those rules.” (Footnote: ¹⁴)

In the case of Murray because of the working procedures adopted by the respondent in that case, a practice had arisen whereby applications under rule 9(2) were routinely being made late. The Upper Tribunal was highly critical of that system and stated that it was imperative that it be changed and improved. Nevertheless, the Upper Tribunal exercised its discretion under rule 7(2)(a) and waived the requirement to comply with the time limit. In Brogan the pursuer’s solicitor was in ignorance of the special rule for the shortened period in which a summons in a personal injury action must be called. This was a circumstance the judge at first instance considered inexcusable. However, the motion that the court exercise its discretion under rule 2.1 was, in any event, incompetent because the summons had fallen and was no longer in existence. The comments quoted above are therefore obiter, but nonetheless relevant to efficient administration of justice.

We have had regard to the guidance referred to in the authorities cited to us. Unlike in Murray, in the present case, we were assured that there was a protocol in place to ensure timeous applications to be added as a respondent. It was unfortunate that, due to recent staff changes and resourcing problems, the. significance of this particular case was missed until late in the day. This resulted in a late application along with late submission of a skeleton argument.

The only prejudice cited by counsel for the first three appellants was the additional expense of the work required to consider the late application and skeleton argument.

We accepted the respondent’s submission that, potentially, more turned on the outcome of this appeal than its consequences for these appellants. We accepted that the decision on the appeal might have a wider impact on the future conduct of proceedings before TCs generally. Looking at the skeleton arguments and other material available, we considered it likely that the appeal proceedings would be concluded in the time already allocated.

In all the circumstances, we considered it fair and just to exercise our discretion under rule 7(2)(a) and to waive the time requirement in paragraph 6 of Schedule 1. Having done that, therefore, in terms of paragraph 7 we are obliged to add the Secretary of State for Transport as a respondent to this appeal.

Mr Adams adopted the terms of the Notice of Appeal to the Upper Tribunal and his written skeleton argument.

He submitted that there had been a general failure by the DTC to apply the rules of natural justice and follow fair procedure. The DTC had considered the issue of fronting at the 2021 PI. While he determined that CHL was not a front for James Strathearn and that the second and third appellants retained their good repute, he had criticised them and James Strathearn. He suspended James Strathearn from occupational driving for a period for a driver conduct issue.

Thereafter, James Strathearn went to DVSA and made allegations of, essentially it was submitted, a criminal conspiracy to pervert the course of justice. In presiding over the second PI the DTC was acting as a repeat fact finder on the same facts; and, if he concluded that the appellants had lied at the 2021 PI, then he was a witness to crime. As a witness to a crime, this put him in an onerous position.

Mr Adams submitted that by failing to recuse himself, the DTC had tainted the proceedings with apparent bias. It was inappropriate for him to sit in the 22/23 PI which caused him to revisit the findings of fact and law he had made after the 2021 PI. He was in effect, judging his own cause. The risk of appearing to have formed views was too great (R v A (Harold) [1999] Crim LR 420, Dar Al Arkan Real Estate Development Co v Majid Al-Sayed Bader Hashim Al Refai [2014] EWHC 1055 (Comm), [32] to [37]).

The DTC erred when he concluded that there were not “real grounds for doubt” about the risk of perceived bias. There was a real risk that the fair-minded and informed observer, having considered the facts, would have concluded that there was a real possibility that the DTC was biased given his previous involvement in assessing the same witnesses about the same matters on which he had already made findings in fact and law, including adverse comments about the appellants (Porter v Magill [2002] 2 AC 357, [102] – [103], HCA International Ltd v Competition and Markets Authority [2015] 1 WLR 4341, [62], [64], [68] to [71]). The DTC ought to have taken a cautious approach in such circumstances (P Elsagood Transport Service Ltd, Appellant [2019] UKUT 0117 (AAC), [17]).

By failing to take such a cautious approach and electing to preside over the second PI, there was a violation of the appellants’ rights under Article 6(1) as the DTC lacked the requisite impartiality and independence given that he had reached final findings in fact and law in relation to the same matters at the 2021 PI (Gerovska Popčevska v Macedonia (2018) 66 EHRR 12, [43] – [56]).

Furthermore, the gravamen of Mr Strathearn’s allegations amounted to a crime that the Commissioner was a witness to. It was inappropriate for him to assess the same witnesses and the same body of facts anew in those circumstances.

The DTC erred by giving undue weight to the concession made by the appellants’ counsel on 15 November 2022 that the assessment of a witness’ credibility is about more than what a witness says. That was a trite acceptance of known judicial practice. It did not amount to a suggestion that, the DTC having previously seen and heard the second and third appellants and Mr Strathearn give evidence, that overrode the undermining of the principles of fairness and natural justice caused by apparent bias.

Regarding the second ground of appeal and the inconsistent treatment of James Strathearn before the second PI, this was unfair and contravened the rules of natural justice. The procedure adopted contravened the appellant's rights under Article 6(1) of the ECHR.

The appellants had a reasonable expectation that the procedure adopted by the Commissioner at the second PI would constitute a fair hearing conform to the rules of natural justice (2003/094 Dawlish Coaches Ltd, [4]). Similarly, the appellants had a reasonable expectation that the procedure adopted by the DTC at the second PI would comply with section 6 of the Human Rights Act 1988 and Article 6(1) of the ECHR (R (Al-Le Logistics Ltd) v Traffic Commissioner for South Eastern & Metropolitan Traffic Area [2010] EWHC 134 (Admin), [92]).

Standing (i) the approach taken by the DTC at the second PI, and (ii) the terms of his decision of 23 April 2023, Mr Strathearn’s status was properly that of a witness, he was not, for the purposes of paragraphs 3 and 5 to schedule 4 of the Goods Vehicles (Licensing of Operators) Regulations 1995 (“the Regulations”), a “person entitled to appear” at the second PI. Therefore, he had no entitlement to sight of the briefs produced by the OTC and the documentation and statements lodged by the appellants. The same applied to his partner, Hana Simpson.

While public inquiry proceedings are inquisitorial in nature, they perform a regulatory function. The determination made by a commissioner has regulatory consequences that, such as in the instant case, may put an operator out of business. They are not, therefore, akin to proceedings under the Inquiries Act 2005 or the Inquiries into Fatal Accidents and Sudden Death etc. (Scotland) Act 2016.

In that context, parties to a public inquiry have separate, and competing, interests. A party has the right to cross examine witnesses and make submissions to the commissioner at the conclusion of the evidence (paragraph 5(2) to schedule 4 of the Regulations). Disclosure of evidence is also made to a party to the proceedings. Those rights do not extend to witnesses. Indicating that Mr Strathearn was a witness, but providing him with materials lodged on behalf of the appellants to the inquiry, the Commissioner (or the OTC acting under his direction) acted inappropriately and inconsistently. Mr Strathearn and Ms Simpson were able to gain access to material that, as witnesses, they should not have had access to. They were thus able to tailor their evidence and prepare for cross-examination in a manner which a witness would ordinarily be unable to do. Moreover, they were able to do so without fear of regulatory sanction.

As Mr Strathearn and Ms Simpson have (i) had sight of all the material lodged on behalf of the appellants, including their statements, and (ii) been cross-examined by counsel for the appellants and the DTC it is submitted that, where either ground of appeal is upheld, the appellants cannot receive a fair re-hearing before an alternative commissioner. That is because both Mr Strathearn and Ms Simpson had access to all the materials put to them at the second PI and an awareness of the likely lines of examination that would be put to them. Thus, they could be aware of the likely future line of cross-examination they would face at any re-hearing and tailor their evidence accordingly.

Through his inconsistent treatment of Mr Strathearn’s status, the DTC has erred. In so doing, the appellants received an unfair hearing which went against the principles of natural justice and contravened their rights under Article 6(1) of the ECHR.

The circumstances relied upon by the 1^st to 3^rd appellants are not sufficient to give rise to a complaint of apparent bias. Accordingly, it was submitted, the 1^st to 3^rd appellants’ contention has no merit.

Where apparent bias is alleged, the question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the decision-maker was biased. Bias is an attitude of mind which prevents the decision-maker from making an objective determination of the issues he has to resolve. The mere fact that the decision-maker has previously decided an issue or commented adversely on any party or witness, or found the evidence of a party or witness to be unreliable, does not, without more, justify a conclusion of apparent bias: AMEC Capital Projects Ltd v Whitefriars City Estates Ltd [2004] EWCA Civ 1418 at [16]-[21].

In AMEC the same person had been appointed as arbitrator to deal with the same issue twice. On the first occasion he had no jurisdiction to decide the issue, although he had done so. The Court of Appeal decided that there was no possibility of bias when he decided the same issue again, this time with jurisdiction. Mr Tosh referred to the dictum of Lord Dyson at [20] and [21], where he stated that the vice which the law must guard against is that the tribunal may approach the hearing with a closed mind. The mere fact that the tribunal has decided the issue before is therefore not enough for apparent bias. There needs to be something of substance to lead the fair-minded and informed observer to conclude that there is a real possibility that the tribunal will not bring an open mind and objective judgment to bear.

The findings of the first public inquiry were evidence before the second public inquiry. They would have fallen to be taken into account by the DTC or any other commissioner appointed to preside at the second inquiry. There is no suggestion that the DTC made any judicial error at the first inquiry. That being so, the fair-minded and informed observer would not think that the DTC was in any different position (other than, perhaps, a marginally better one by reason of his experience of the earlier proceedings) than any other commissioner who may have been appointed to conduct the second public inquiry: JSC BTA Bank v Ablyazov (No 9) [2013] 1 WLR 1845 at [69].

There may be a risk of apparent or confirmation bias in circumstances where a decision-maker has made a decision, which is overturned on review or appeal, and the matter is remitted to or otherwise comes before the same decision-maker to determine exactly the same issue, on the same evidence and arguments, a second time. In that scenario, the risk is that the decision-maker may be inclined to reach the same decision a second time because it is plain from the earlier decision that his mind is made up and it will be difficult, if not impossible, to change it, or at least that there may be a human desire to reach the same result if only to be able to say “I told you so”. That is the risk of allowing a decision-maker a second bite at the cherry discussed in HCA International Ltd at [62].

The DTC was asked to determine broadly the same issue, but on new and different evidence and arguments, and he reached a different conclusion. The fact some of that evidence came from the same witnesses is irrelevant. The DTC was not having a second bite at the (same) cherry.

In any event, absent special circumstances, a readiness to change one’s mind upon some issue, whether upon new information or further reflection, and to change it from a previously declared position, may be taken to be a capacity possessed by anyone prepared and able to engage with the issue on a reasonable and intelligent basis: Sengupta v Holmes [2002] EWCA Civ 1104 at [31]-[37].

There are no special circumstances or other grounds to reasonably doubt that the DTC approached the second inquiry with anything other than an open mind or to reasonably suspect that the DTC approached the second inquiry with a closed mind or pre-judged the issue before him at the second inquiry. That is confirmed by the fact that the DTC reached a different conclusion. Any confirmation bias favoured the appellants.

In those circumstances, the complaint of apparent or confirmation bias has no merit. The DTC did not act unfairly, damage public confidence in thedecision-making process or act contrary to the principles of natural justice.

The appellants complain that two witnesses (James Strathearn and Hana Simpson) had access to material (documents and witness statements) which put them in a position to tailor their evidence and prepare for cross-examination in a manner not ordinarily available to such witnesses with the result that the public inquiry was conducted unfairly contrary to the principles of natural justice and article 6(1) of the European Convention on Human Rights. There is no substance to that complaint. There was nothing about the evidence of Strathearn and Simpson that rendered the conduct of the public inquiry unfair.

There is no rule against witnesses being given access to case materials before they come to give their evidence or discussing the evidence with other witnesses: Evidence (Scotland) Act 1840, s 3; Hughes v HM Advocate 2023 JC 40, 44 at [19]-[20].

The modern trend towards use of witness statements or affidavits as evidence-in-chief in civil proceedings specifically contemplates that witnesses will have access to the written evidence of other witnesses before they give their own oral evidence. It is a move away from “trial by ambush” and allows a witness to give a considered response to points which may be made against him and the evidence given by others: Luminar Lava Ignite Ltd v Mama Group plc 2010 SC 310, 327 at [72]. Consistent with that aim, in the guidance issued by the Commercial Judges of the Court of Session on the use of signed witness statements or affidavits (March 2012), it is explained that: “The statements of a party’s other witnesses or of another party’s witnesses may be disclosed to a witness after the exchange of statements between the parties.”

James Strathearn gave a statement at interview on 21 March 2022. In those circumstances, it was perfectly appropriate for him to be given access to, among other things, the statements of other witnesses. It does not matter whether that was done because he was treated or described as a participating party or a witness. The DTC bears no responsibility for the fact that Strathearn may have shared that material with Simpson.

In any event, the appellants were aware that Strathearn and Simpson had had access to such material before they came to give oral evidence. The matter was the subject of specific discussion in the early part of Simpson’s evidence [see the transcript in the bundle of documents for the appeal at p 1270] and before Strathearn came to give oral evidence. Despite that, there was no objection to those witnesses being allowed to give evidence on the basis of the complaint now made and, more importantly, the appellants had the opportunity to cross-examine Strathearn and Simpson and to invite the DTC to reject their evidence on the grounds that it had been tailored by reference to material which they had had available to them.

For all the foregoing reasons, Mr Tosh submitted that the appeal should be dismissed.

The 4^th appellant appeals against his loss of good repute and disqualification for a period of 12 months. Mr Kelly accepted that if a TM is found to have acted deceitfully then that is very serious. He submitted that because it was so serious the evidence relied upon to arrive at that conclusion should be incontrovertible and any contrary explanation should be capable of being discounted or ignored. In considering how likely it was that Aaron Harrison was involved in the set-up of the operator as a front for James Strathearn, the Upper Tribunal had to consider not only the good repute of the 4^th appellant but also how inherently probable or improbable it was that he would be so involved (Footnote: ¹⁵). Nevertheless, it was accepted that the standard of proof remained the balance of probabilities and it was acknowledged that the hurdle before the 4^th appellant was a high one.

Ground 1: Given the email evidenceproduced by James Strathearnto support the allegations or fronting, Mr Kelly submitted that it is striking the lack of emails either referring to Aaron Harrison or including Mr Harrison as a recipient. Had he been involved from the outset and acting as de facto Transport Manager, Mr Kelly submitted, there would have been such correspondence. He referred to document X3 [1462] as an example. Of the email evidence produced (listed at page 67) there was nothing showing that Aaron Harrison was involved in the setting up of Central Haulage.

Mr Kelly submitted that the finding that Aaron Harrison’s evidence about the setting up of CHL and the involvement of Hana Simpson was implausible [para 334 p2289] was not supported by the evidence. There was no documentary evidence about the setting up of CHL. Aaron Harrison’s evidence was that he did not know at the start thatHana Simpson was a director. The motive that Mr Harrison identified was as a consequence of the dispute that was ongoing [p1402 at 41:30] between James Strathearn and Johanna and Gordon Dunne. On the specific question of Hana Simpson's role as director of Central Haulage Ltd Mr Harrison's evidence was he did not know [p1404 at 51]. It was submitted that, in light of the evidence, to find that Aaron Harrison’s evidence was implausible was plainly wrong.

Ground 2: The Deputy Traffic Commissioner arrived at a conclusion that Mr Harrison failed in his duty to the Traffic Commissioner. The DTC has not stated when this duty arose. Aaron Harrison was not appointed TM until October 2021 which was 2 years after the start of the CHL operation. The DTC refers to the decision in Liliana Manole [2022] UKUT 002277(AAC) and the role of the Transport Manager to be the eyes and ears of the Traffic Commissioner. In his decision, the DTC found that this had not been a typical fronting operation. In those circumstances, what was Aaron Harrison to do and when?

The evidence of Aaron Harrison was that Central Haulage was the business of Johanna and Gordon Dunne. It is possible for the DTC to find there was a fronting arrangementand that Aaron Harrison was remote from that. The DTC rejected Aaron Harrison's argument finding as he was at the start up meetings {which was denied} and at the DVSA interview in March 2020 Mr Harrison's evidence was he was impartial at that meeting [p1396]. It is speculation by the DTC as to what Mr Harrison took from that interview Given the DTC never asked Mr Harrison this question it is was not open for him to speculate why.

Ground 3: Following from Ground 1, that having found Mr Harrison was involved in the set-up of CHL he is implicated in the arrangements that followed. The DTC did not consider even ifMr Harrison was at the start up meetings, to what extent he was implicated in what followed.

Clearly from the evidence Mr Harrison was not acting as a director. He performed Transport Manager duties from October 2020 (accepting Mr Strathearn and Ms Simpson say he was acting as Transport Manager earlier). The evidence is he was performing the duties of Transport Manager pertinent to drivers hours, and administration and vehicle maintenance, well. (It is accepted Mr Strathearn stated that this was in part due to him [p1311 at 07:00]). However, the issue of Mr Strathearn being disqualified cannot be overlooked.

Even if there was something amiss with the company, Aaron Harrison was sufficiently remote from this to justify retaining his repute. The DTC should have made an assessment of his culpability. Aaron Harrison’s position is distinguishable from that of the TM in the Manole case. The TM in that case had been very involved in the fronting operation.

Mr Kelly submitted that, If Transport Managers are to be the eyes and ears of Traffic Commissioners the test for each Transport Manager must be subjective; for the professionally competent person to assess each given situation. Mr Harrison believed that he acted appropriately. The DTC after having had voluminous evidence (the Compliance Team Leader never had a case with such a volume of material in 16 years [p009]) arrived at his determination; much of which had not been seen by Mr Harrison before the Inquiry. The DTC’s conclusion on the evidence is therefore wrong.

Ground 4: The length of disqualification is excessive. The DTC acknowledged that Aaron Harrison had been put into an invidious position (paragraph 370). Regard is given to paragraph 323 [page 2287] of the DTC’s decision. Whilst each case is considered on its merits, that the Transport Manager, who has no familial relationship with Mr & Mrs Dunne, and has no shareholding in Central Haulage Ltd, be disqualified for the same length of time as the operator is perverse. Having regard to Aaron Harrison’s particular circumstances his period of disqualification should be shorter.

The following principles (extracted from the Digest of Traffic Commissioner Appeals) as to the proper approach to an appeal in the Upper Tribunal can be found in the decision of the Court of Appeal in the case of Bradley Fold Travel Ltd & Peter Wright –v- Secretary of State for Transport [2010] EWCA Civ. 695:

Operator licensing is based on trust, as has long been recognised by courts and tribunals.

“Traffic Commissioners must be able to trust those to whom they grant operator’s licences to operate in compliance with the regulatory regime. The public and other operators must also be able to trust operators to comply with the regulatory regime” (Footnote: ¹⁶).

In NT/2013/82 Arnold Transport & Sons Ltd v DOENI, the Tribunal said:

It is not in dispute that the appellants have a right to an unbiased tribunal and to a fair hearing compliant with Article 6 of the ECHR.

The appellants are not alleging actual bias but apparent bias. There was no dispute between the parties that the test for apparent bias is as set out in Porter, namely whether a fair-minded and informed observer, having considered all the circumstances which have a bearing on the suggestion that the decision-maker was biased, would conclude that there was a real possibility that he was biased (para 103). The answer in any particular case will be dependent on the facts and circumstances of that case.

The question then arises, what is a “fair-minded and informed observer”? The fair-minded and informed observer is “neither complacent nor unduly sensitive or suspicious” (Johnson v Johnson (2000) 201 CLR 488 at para 53). In Helow v. Secretary of State for the Home Department 2009 SC (HL) 1, Lord Hope stated:- 

Therefore, the Porter test must be applied while knowing what the fair-minded person would think were one looking at it objectively and considering reasons why the judge might be biased. It must also be kept in mind that what we are concerned with is a real possibility of bias, not a fanciful one.

Locabail was not directly cited to the Upper Tribunal however, it is discussed in AMEC. The passages already referred to by Lord Dyson are worth quoting at length:-

In the present case, the DTC is a specialist adjudicator in a regulatory regime which requires to be able to trust operators to comply with that regime in order to maintain public safety and fair competition. The DTC is a professional adjudicator who can be assumed to be trustworthy and to approach the issues he had to decide with an open mind and who would bring objective judgment to bear on the issues (AMEC and see AM Richardson v BETR 2000/65). With regard to the DTC in this case, there is nothing to suggest he would be anything other than open minded and would bring objective judgment to bear.

At the 2021 PI, he had heard evidence from Johanna Dunne, Gordon Dunne, James Strathearn and Aaron Harrison, among others. He determined the issue of fronting based on the evidence available to him at that time. He accepted the evidence of Johanna and Gordon Dunne. He referred to them as “experienced, respectable businesspeople” (see paragraph 9(xxiii) above). There is no suggestion of any improper, hostile or extreme comments made by him at the 2021 PI or even that he had erred in law, that would give rise to an apprehension of bias.

Counsel for the first three appellants submitted that the DTC had criticised Johanna and Gordon Dunne by commenting that there had been a woeful lack of due diligence in the appointment of Mr Honeyman as transport manager; that he did not find the suggestion of fronting made out to the required standard, rather than positively exonerating them. However, that has to be taken along with his finding that there was an absence of a proven link between Hana Simpson and James Strathearn. He found the suggestion of such a link was outweighed by the categorical statements of Mr and Mrs Dunne and James Strathearn (see paragraph 9(xxvii) above), which he accepted. Any comments he did make fall far short of suggesting that he might be biased against them and would approach the second PI with a closed mind. To suggest otherwise, is unduly sensitive and suspicious.

As regards, the 22/23 PI, the DTC had to determine broadly the same issue again. He heard evidence from Johanna Dunne, Gordon Dunne, James Strathearn and Aaron Harrison again. Judges often have to hear cases involving parties who have previously given evidence before them. Without more, that will not give rise to a real possibility of bias. In the 22/23 PI, much of the oral and documentary evidence was different. In addition, he heard evidence from Hana Simpson. The DTC had a rational basis for reaching a different conclusion. He made different findings and reached a different conclusion on different evidence. He has given cogent reasons why he was able to accept some evidence and reject other evidence. There is no suggestion that the evidence was insufficient to underpin the conclusions or that the findings were in some way perverse or irrational.

As regards a lack of evidence at the 2021 PI of a link between Hana Simpson and James Strathearn, counsel for the first three appellants submitted that when that evidence was provided in the 22/23 PI, this allowed the DTC to confirm his previous suspicions, thus leading to confirmation bias. We do not accept that submission. As explained in the previous paragraph, that was simply the DTC reaching a different conclusion on different evidence which he found acceptable. Nor could it be described as the DTC having “a second bite at the cherry”.Further, we agree with the submission for the respondent that, based on his findings at the 2021 PI, any risk of confirmation bias would have favoured the first three appellants.

We do not accept that the DTC gave undue weight to the concession made by counsel for the first three appellants that the credibility of a witness is about more than what a witness said. There was nothing unusual about such an observation. In any event, it is clear the DTC’s preliminary decision did not turn on that and that he had regard to many other factors.

Bearing in mind the guidance from the authorities cited, we do not agree that the facts and circumstances of this case give rise to a real possibility that the DTC was biased. We agree with the submissions made on behalf of the respondent that the test for apparent bias is not satisfied. Nor is the case for confirmation bias made out. For the same reasons, we find that the DTC did not err in law and was not “plainly wrong” by declining to recuse himself. We therefore reject the first three appellants’ submissions.

Counsel referred to other authorities which we considered did not add anything of significance to the principles and guidance found in the authorities we have referred to. In saying that, we mean no disrespect to the carefully researched arguments presented to us.

James Strathearn and Hana Simpson were not parties to the 22/23 PI but witnesses. They appear to have been provided with some, if not all, of the documents in the PI brief, including statements by the second and third appellants and, possibly, the fourth appellant. For the purposes of this appeal, we shall assume that they were provided with all the documents in the brief and all of the appellants’ statements.

We reject the submissions made on behalf of the first three appellants’ that disclosure of this material to these witnesses resulted in unfairness, a breach of natural justice and a contravention of the first three appellant’s rights under Article 6(1) of the ECHR.

The PI before the DTC was an inquisitorial process. However, even in an adversarial process, the presence of a witness in court while an opposing party gives evidence, or access by a party to an opposing party’s witness statements and productions before giving evidence, does not necessarily lead to unfairness. Indeed, it may promote a fairer outcome. This is recognised by the court approved or imposed practices of exchange of witness statements and the lodging of documents or productions to be founded upon in advance of a proof or trial (Footnote: ¹⁷). What is prohibited is the coaching of a witness with a view to influencing or altering the witness’s evidence.

Both James Strathearn and Hana Simpson provided statements before those given by Johanna Dunne and Gordon Dunne (see pages 71 and 1683) and before either James Strathearn and Hana Simpson had sight of those statements. Those statements therefore could not have been influenced by the statements given by Johanna Dunne and Gordon Dunne.

In any event, it is clear from the transcript of the PI, that James Strathearn and Hana Simpson had had access to the statements and documents before they gave their evidence (page 1270, transcript of Hana Simpson’s evidence) and that this was known to the appellants. If the first three appellants had concerns that oral evidence of James Strathearn and Hana Simpson might be influenced by what they had read, then a submission could have been made to have their evidence ruled inadmissible. That was not done. Further, counsel for the first three appellants had the opportunity to cross examine James Strathearn and Hana Simpson on the question of tailoring their evidence. Finally, counsel for the first three appellants could have submitted to the DTC that Hana Simpson and James Strathearn’s evidence had been tailored and that it should be rejected for that reason. That does not appear to have been done as such a submission is not contained in the written submission to the DTC (pages 2201-2214), nor is such an argument referred to by the DTC in his decision.

We accept and agree with the submissions made for the respondent. There is no merit in this ground of appeal.

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.

The decision of the DTC dated of 24 April 2023 is confirmed in all respects. The appeals of the first three appellants and the appeal of the 4^th appellant are dismissed.

A stay has been granted in this case. The revocation of the operator’s licence, and the disqualifications of all four appellants will come into effect from 23.59h on 6 March 2024.