Norfolk Farm Produce Limited, Re

In what follows, (unless the context otherwise indicates) references to “sections” (or “s”) or “Schedules” are to sections of, or schedules to, the Goods Vehicles (Licensing of Operators) Act 1995; and, to avoid having to say “he or she”, the Traffic Commissioner (the “TC”) will be referred to as “it”.

The appellant appealed to the Upper Tribunal against a direction of the TC revoking the appellant’s operator’s licence and notified to the appellant in a letter dated 22 December 2023 (TC’s case number OF0079657). That letter

On 13 February 2024, the Upper Tribunal issued a direction “staying” the TC’s revocation direction until the appellant’s appeal to the Upper Tribunal was disposed of,.

The holder of an operator's licence may appeal to the Upper Tribunal against a revocation direction given under section 27(1), in respect of the licence: s37(2).

The Upper Tribunal has jurisdiction to hear and determine all matters whether of fact or law for the purpose of the exercise of its functions under an enactment relating to transport. It has the power to make such order as it thinks fit or, in a case where it considers it appropriate, to remit the matter to a TC for rehearing and determination.

The Upper Tribunal may not take into consideration any circumstances which did not exist at the time of the determination which is the subject of the appeal.

The task for the Upper Tribunal on an appeal is to conclude whether or not, on objective grounds, a different view from that taken by the TC is the right one or (meaning the same thing) whether reason and the law impel the Upper Tribunal to take a different view (Bradley Fold Travel and anor v Secretary of State for Transport [2010] EWCA Civ 695 at [40]).

We had before us a bundle of 203 pages (which included a bundle of 144 pages prepared by OTC), a written skeleton argument of the appellant, a chronology prepared by the appellant, and 73 pages of additional evidence from the appellant.

The additional evidence included a letter of 8 March 2024 from the appellant’s solicitors to OTC, referring to the stay granted by the Upper Tribunal, and stating that the appellant wished to add a transport manager to its licence, Steven Braim; attached were a copy of a completed from TM1, a statement by Mr Braim about how he would be continuing to manage his hours, and qualification and refresher training certificates from 2009 and 2021. There was also a printout dated 26 March 2024 from the OTC’s system, indicating that an online application had been made in respect of Mr Braim.

We are grateful to Mr Yeo for his submissions on the appeal and his clearly and carefully presented documentary material.

Mr Yeo also sent the Upper Tribunal, at the same time as his skeleton argument, written “submissions relating to stay”. We note the following:

The appellant’s business is the production, storage and distribution of its own farm produce, in particular potatoes, rhubarb and carrots; and the storage and distribution of farm produce, in particular potatoes, sugar and grain, for third party customers. The appellant remains a family business. As part of its distribution process, the appellant runs a fleet of lorries, employing five drivers and two workshop members of staff.

The appellant obtained its operator’s licence in 1993.

On 25 March 2023, the appellant’s transport manager, who had been in post since 2015, unfortunately died, after a short illness. OTC was informed on 28 March 2023.

On 1 April 2023 OTC wrote to the appellant under the heading, “Loss of transport manager”. The opening paragraph stated in bold type that failure to address the concerns raised in the letter would result in the TC revoking the licence; it said that this applied even if the appellant had already submitted an application to nominate a new transport manager which had not yet been granted by the
TC. The letter cited s27(1) and stated that it appeared to the TC that the second requirement in s13A was no longer satisfied (designating a suitable number of Schedule 3 compliant transport managers). It said that the letter was notification under s27(2) that the TC was considering giving a revocation direction under s27(1). It said that the appellant could make written representations to the TC, by 22 April 2023. It said that s29(1) allowed the appellant to request a public inquiry, in order to offer further evidence as to why the licence should not be revoked. It said that the representations could include an application to add a replacement transport manager to the licence. It said that the TC may consider granting a period of grace to enable the appellant to find a replacement or whilst its nomination of a new transport manager was being considered – but the appellant had to ask.

On 18 April 2023 the appellant wrote to OTC asking for a period of grace to allow the appellant to complete its plan over the next six months. That plan involved the appellant’s longstanding general manager, Mr Hornigold, attending a course in May 2023 to qualify as a transport manager; and the appellant seeking to employ a suitable candidate in the next few weeks whilst Mr Hornigold completed the course. Once Mr Hornigold passed the course, he would take over the day to day responsibilities and develop the role through CPD on a continuous basis.

On 15 May 2023 OTC wrote to the appellant giving a period of grace until 12 August 2023.

On 20 July 2023 the appellant wrote to OTC saying that Mr Hornigold had failed part of the course for qualifying as a transport manager. It said that he was booked to re-sit the exam on 2 October 2023. The appellant asked OTC to grant “the full 9 months grace period” to allow him to retake the exam and receive the results. It said that they had been conducting interviews with prospective candidates to fill the position, regardless of Mr Hornigold’s results, and would have someone in place before the end of September.

On 24 July 2023 OTC wrote to the appellant saying that the period of grace would now end on 12 November 2023.

On or around 30 October 2023, the appellant submitted an application to add Mr Bell as a transport manager. OTC wrote to the appellant on 31 October 2023 saying that the application was incomplete (including that Mr Bell had attained his relevant certificate more than 10 years ago).

On 9 November 2023, the appellant submitted an application to add Mr Shilling as transport manager.

On 24 November 2023, OTC wrote to the appellant, referring to its application to nominate Mr Bell and Mr Shilling as transport managers; the letter said that the TC had declined to accept the nominations, as both required additional information/documents. The letter said that the appellant’s extended period of grace had expired on 12 November; it said that “this may be the final deadline the traffic commissioner will grant you to restore your professional competence”. It said that the information had to be provided by 8 December 2023. The letter said that the issue with regard to Mr Bell was that his certificate was more than 10 years old. It said that he needed to provide details of any professional development undertaken, or the appellant needed to offer an undertaking for Mr Bell to attend training within three months. The letter said that the issues with regard to Mr Shilling were (i) the proposed working hours for him were less than OTC recommended (ii) he had other responsibilities which might impact his availability; under this heading, the letter also said that Mr Shilling had ongoing issues due to his involvement with a previous licence; in the following line, it said Mr Shilling was involved with another licence with adverse history (iii) OTC needed more information about the arrangement between the appellant and Mr Shilling. The letter said that what the appellant had to do as regards Mr Shilling was (1) for him to confirm that he would be dedicating a minimum number of hours to reflect the licence’s vehicle authorisation (2) for him to provide a document explaining how he would meet the requirements of the role, to ensure continuous and effective management of the appellant’s and any other licence he was specified on and (3) upload the contract for services signed by Mr Shilling and the appellant.

OTC’s letter of 22 December 2023 stated that the appellant’s response to OTC’s 24 November 2023 letter, dated 6 December 2023, included the required information in support of Mr Shilling’s application (but not Mr Bell’s). One of the documents uploaded to OTC by the appellant on 6 December 2023 was a one-page document signed by Mr Shilling on 4 December 2023, which states, under the heading “Statement of Fact”: “It is known to Traffic Commissioner regarding issues with previous company that I was external transport manager. This being Coast Transport Limited. There was almost no knowledge of what was happening within the business, as the director kept everyone at arm’s length, and decided to deal with issues themselves. As a result, I am now undertaking a transport manager refresher (2 day) from Thursday 7^th – Friday 8^th December, with National Compliance Training. Meeting with Traffic Commissioner on Monday 11^th December.”

An internal OTC memo from 14 November 2023, created by a member of staff, includes that Mr Shilling had ongoing compliance issues, including a pending public inquiry due to be held on 11 December 2023; it was called specifically due to Mr Shilling’s reluctance to attend a ‘PH’ that was set for October 2023; the memo said that good repute was in question in the inquiry on 11 December.

An internal OTC memo from later the same day, created by the OTC decision-maker, includes the observation that the second application, to add Mr Shilling, was more problematic (than the application for Mr Bell), as not only would the TC require additional evidence in relation to how he intends to maintain continuous and effective control, but in addition he was due to attend a transport manager only public inquiry (on 11 December) and his repute remains in question. The internal memo indicates that the decision-maker envisaged a final extension of 14 days to complete the applications in their entirety or nominate a suitable alternative.

An internal OTC memo from 19 December 2023 says, amongst other things, that Mr Shilling apparently chose not to attend the public inquiry on 11 December; and the deputy TC disqualified him to take effect on 15 January 2024.

The appellant’s solicitors wrote to the TC on 4 January 2024 seeking reconsideration of the TC’s direction to revoke. This represented that the appellant did not appreciate (and had not been told by Mr Shilling) that Mr Shilling’s “meeting” with the TC on 11 December 2023 (as Mr Shilling described it in the document he signed on 4 December 2023) was in fact a public inquiry at which his good repute was at issue.

The letter said that the appellant had taken steps to identify a suitable alternative candidate for transport manager, Mr Braim, who was available and qualified; in the alternative, it asked for a public inquiry.

OTC responded on 5 January 2024, refusing the appellant’s requests, other than extending the date on which revocation would take effect, to 22 January 2024.

The appellant’s grounds of appeal were:

The appellant submitted that if the appeal were allowed, the Upper Tribunal should simply quash the revocation direction (and make no further order); this was on the basis that

The statutory scheme relevant to the events set out above is that of sections 27 and 29: the TC is required by statute to direct revocation of a licence where, amongst other things, the licence-holder no longer has a Schedule 3 compliant transport manager; the statute itself sets out certain procedural requirements, such as the giving of notice by the TC, with its grounds; a 21-day period for the licence holder to make representations, which the TC must consider; a power of the TC to set a time limit (not to exceed, in this case, 9 months after the giving of notice by the TC) for the licence holder to rectify the situation, with a prohibition on the TC making the direction if the licence holder rectifies the situation within the time limit (the period up to the end of the time limit is known as a “period of grace”); and the right of the licence holder to require that the TC first hold an inquiry (known as a “public inquiry”).

In this case, a period of grace was granted, albeit in increments – ultimately, the time limit set by the TC was 8 December 2023 – and the way in which the appellant was trying to “rectify the situation” was to designate one or more Schedule 3 compliant transport managers. In a nutshell, the TC’s reasoning for directing revocation was that, by the time limit, no Schedule 3 compliant transport manager had been designated. That was because, in simple terms, the appellant had not, following the TC’s letter of 24 November 2023, pursued the nomination of Mr Bell – and the TC had decided that Mr Shilling, the appellant’s other candidate, did not meet the Schedule 3 requirements owing to his imminent disqualification as a transport manager.

We note case law that shows that the onus was on the appellant to persuade the TC that its transport manager candidates were Schedule 3 compliant:

As we have been unable to reach a unanimous decision, what follows in this sub-section is the reasoning of the majority of the panel (Judge Citron and Ms Pepperell) – which, under regulation 8 of the First-tier Tribunal and Upper Tribunal (Composition of Tribunal) Order 2008, is the decision of the Upper Tribunal. In the following sub-section, the views of the minority (Mr Roantree) are summarised.

The strand of the appellant’s case which the majority has found persuasive is that which points to unfairness in the procedure which culminated in the TC directing revocation because Mr Shilling was not a Schedule 3 compliant transport manager. There are two aspects to the procedure followed by the TC, following the appellant’s nomination of Mr Shilling in mid-November 2023, that appear to the majority of the panel unfair, both linked to the fact that the TC knew that Mr Shilling had a public inquiry on 11 December 2023 at which his good repute was to be considered:

The reason the first aspect above is, in the majority’s view, procedurally unfair is based on the following factual findings, which we make unanimously

In the view of the majority of the panel, the procedural unfairness in the context of the findings above is essentially that the TC’s decision was made on the basis of information that it had, but the appellant did not; and that, had the appellant had the information, it is reasonable to suppose that the outcome would have been different (because the appellant would have nominated a Schedule 3 compliant transport manager by the time limit, or by the time of the holding of a public inquiry).

In the majority’s view, the second aspect of procedural unfairness identified at paragraph 36 above – the TC’s setting the time limit three days before Mr Shilling’s public inquiry – stands in addition to the first. In other words, even if the appellant had, in fact, known, prior to the time limit, about Mr Shilling’s forthcoming public inquiry, it would still have been procedurally unfair to set the time limit at three days prior to that inquiry. This is because, even though, prior to the time limit, the appellant knew about Mr Shilling’s public inquiry, it did not know (and could not possibly have known) its outcome; and the outcome was determinative of the TC’s revocation direction. The procedural unfairness is that the time limit set made it inevitable that the TC would have information before it, when deciding whether to direct revocation, that the appellant did not have (and could not have had) prior to the time limit. To put it in positive terms: given the importance of the outcome of Mr Shilling’s public inquiry to the TC’s decision as to whether to direct revocation, procedural fairness required that the appellant be given chance to react to it (including by one of the steps at paragraph 37c above), prior to the making of any decision by the TC; this could have been achieved by setting a later time limit (to the extent allowed by law) and/or holding a public inquiry.

In that regard, we note the Upper Tribunal’s decision in Atbus Ltd [2019] UKUT 0032 (AAC) where, in a complex factual matrix that engaged the same statutory framework as this case, it was held (at [34]) that “the circumstances and matters of fairness dictated that a PI ought to have been held”.

As to whether the procedural unfairness we have identified engages our jurisdiction, we believe it does: we have jurisdiction to hear an appeal against the TC’s revocation direction; and, in the words of R (Iran) v Secretary of State for Home Dept [2005] EWCA Civ 982 at [9], “committing or permitting a procedural or other irregularity capable of making a material difference to the outcome or fairness of the proceedings” is a legal error; indeed, it is well established in appeals of this kind that breaches of the rules of natural justice in the procedure adopted by the TC render the TC’s decision wrong and susceptible to set-aside. Here, the unfairness (in the view of the majority) in the procedure leading to the revocation direction (and which was material to the making of that direction) means that the direction itself was in error of law.

It follows from the above that the TC’s decision was, in the view of the majority (and therefore of the Upper Tribunal), legally flawed and so wrong, and falls to be set aside.

The view of the minority, in summary, is that, viewed in context, the TC’s decision to revoke the appellant’s licence did not involve material procedural unfairness. The contextual facts on which the minority places particular weight are:

The minority takes the view that, even though the TC had, and relied on, information that the appellant did not, that was not procedurally unfair, as it was for the licence-holder to discover, by its own diligence, relevant information about its nominated transport managers, including, in this case, the information about Mr Shilling known to OTC.

Having decided to allow the appeal and set aside the revocation direction for error of law, we have considered whether to make any further order. We note that because a stay was granted in this case, our allowing the appeal and setting aside the revocation direction continues, rather than alters, the status quo. On the evidence before us, the appellant has made reasonable endeavours to designate Mr Braim as its transport manager. We agree with the appellant’s submission that it is unnecessary for us to make any further orders, as it will now be for the TC to respond, if it has not done so already, to that nomination. We are aware that in Autoworx Recovery Ltd[2024] UKUT 421 (AAC) and Ashro Shipping Ltd [2024] UKUT 425 (AAC) (published on 18 December 2024 and 8 January 2025 respectively i.e. subsequent to the hearing of this appeal), the Upper Tribunal, in factual matrices engaging the same statutory framework as this case, did make orders upon allowing the appeal; but it seems to us that was the result of the different facts in those cases, including that there had been no stay of the TC’s revocation directions in those cases.

In the light of the above, it is unnecessary for us to consider the appellant’s other arguments and grounds. We would however make clear that we did not accept the argument that the revocation direction was in error of law by reason of the 22 December 2023 letter seemingly referring to a failure to satisfy s13A(3)(a) (because it referred to the appellant itself not being professionally competent), when that provision could not apply, given that the appellant was not an individual; in our view, it was obvious from the context that the provision being invoked was s13A(3)(b) (which applies to companies, and cross refers to the requirements of Schedule 3, which include the professional competence of the designated transport managers). The letter expressed itself clumsily; but that does not in our view amount to a material legal error, as the context made clear what was meant.