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Upper Tribunal (Administrative Appeals Chamber)
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TRAFFIC COMMISSIONER APPEALS
ON APPEAL from the DECISION of Nick Jones
TRAFFIC COMMISSIONER for the Welsh Traffic Area
Dated 15 September 2011
His Hon Michael Brodrick, Judge of the Upper Tribunal
Her Hon Judge Beech, Judge of the Upper Tribunal
Stuart James Member of the Upper Tribunal
VEHICLE & OPERATOR SERVICES AGENCY
SECRETARY of STATE for TRANSPORT
For the Appellant: Tim Nesbitt, instructed by Dyne, Solicitors
For the First Respondent: Chris Hallsworth, of Woodfines, Solicitors
For the Second Respondent: Gordon Nardell QC, instructed by the Treasury Solicitor
Heard at: Victory House, 30-34 Kingsway, London
Date of hearing: 27 & 28 March and 16 April 2011
Date of decision: 2 July 2012
DECISION OF THE UPPER TRIBUNAL
IT IS HEREBY ORDERED that this appeal be DISMISSED.
SUBJECT MATTER:- International issues: International Carriage, Cabotage, Combined Transport; Impounding: approach, lack of knowledge, proportionality; Miscellaneous: Independence of Traffic Commissioners
CASES REFERRED to:-
Air Canada v UK (1995) 20 EHRR 150,
Agip (Africa) Ltd v. Jackson  4 All ER 385 at 405,  Ch 265 at 293
Agip SpA v. Navigazione Alta Italia Spa, The Nai Genova  1 Lloyd’s Rep 353
Asset 2 Asset Ltd Appeal 2011/25
Baden v. Societe Generale pour Favoriser le Developpement du Commerce et de l’Industrie en France SA (1982)  4All ER 161,  1WLR 509
BCCI Ltd v Akindele  4 All ER 221
Berkley v Secretary of State for the Environment and another  2 AC 603
Cia Maritima San Basilio SA v. Oceanus Mutual Underwriting Association (Bermuda) Ltd, The Eurysthene  3All ER 243 at 251,  QB 49 at 68
Close Asset Finance Ltd v Secretary of State for Transport Appeal 2003/3
Commission for the New Towns v. Cooper (GB) Ltd 1995 2All ER 929
Customs and Excise Commissioners v Newbury  1 WLR 2131
Ghaidan v Godin-Mendoza,  UKHL 30
Lindsay v Commissioners of Customs & Excise  EWCA Civ 267
Lombard North Central PLC Appeal 2011/21
Morsil Properties Ltd v. Allied-Lyons plc  CA Transcript 1132
Petch v Gurney  3 All ER 731
R v. Senior (1899) 1QB 283
Romantiek Transport BVBA and others, Appeal 2007/172
WC Commercials Ltd Transport Tribunal Appeal 134/2002
White v. White  2 All ER 43, HL
ACTS, REGULATIONS, ARTICLES and other DOCUMENTS REFERRED to:-
Article 8.3 – Article 8.3 of Regulation (EC) No. 1072/2009 of the European Parliament and of the Council,
Regulation 1072/2009 - Regulation (EC) No. 1072/2009 of the European Parliament and of the Council,
The Impact Assessment – The Commission Staff Working Paper, dated 23 May 2007, which accompanied the Proposal
The Proposal - ‘Proposal for a Regulation of the European Parliament and of the Council’, dated 1 June 2007
The Protocol- Article 1 of the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms.
The Sentencing Act - The Powers of Criminal Courts (Sentencing) Act 2000
The 1897 Act - The Police Property Act 1897
The 1960 Regulation - Council Regulation No. 11 of 27 June 1960
The 1985 Act – The Transport Act 1985
The 1992 Directive - Council Directive 92/106/EEC of 9 December 1992
The 1992 Regulation - Council Regulation (EEC) No. 881/92,
The 1995 Act - Goods Vehicles (Licensing of Operators) Act 1995
The 1995 Regulations - Goods Vehicles (Licensing of Operator’s) Regulations 1995
The 1996 Regulations - The Goods Vehicles (Licensing of Operators) (Temporary Use in Great Britain) Regulations 1996
The 2000 Act – The Transport Act 2000
The 2001 Regulations - Goods Vehicles (Enforcement of Powers) Regulations 2001
The 2009 Regulations - Goods Vehicles (Enforcement of Powers) (Amendment Regulations) 2009
The 2010 Regulations - Goods Vehicles (Licensing of Operator’s) (Amendment) Regulations 2010,
DfT - Department for Transport
AG – Amended Grounds of Appeal
CMR - Convention relative au contrat de transport international de marchandises par route, also known as - The Convention on the Contract for the International Carriage of Goods by Road 1956
Combined Transport – Use under Article 1 of Council Directive 92/106/EEC and the 1996 Regulations
GFP – Graduated Fixed Penalty
HGV – Heavy Goods Vehicle
JN/1 - Draft Cabotage and Combined Transport. Overview by Ireland, (see paragraph148).
JN/2 - Report of meeting between the Department of Transport, Ireland, and the Department of Transport, UK, in relation to cabotage, combined transport, and international journeys, (see paragraph s 149 &150)
NT – Nolan Transport
NRT - NRT Logistics Ltd, a subsidiary of NT
OLR Division - Operator Licensing and Roadworthiness Division
SVE – Senior Vehicle Examiner
TE – Traffic Examiner
Temporary use under Article 1 of 1072/2009 – Use under Article 1.5(d) of Regulation 1072/2009
The Daf - DAF Tractor Unit 07WX6976 impounded on 17 May 2011
The Mercedes - Mercedes Actros 2 axle articulated vehicle 03WX718 impounded on 20 May 2011
VOSA – Vehicle & Operator Services Agency
VE - Vehicle Examiner
[Amended pursuant to Rule 42 of The Tribunal Procedure (Upper Tribunal) Rules 2008]
1. This is an appeal from the decision of the Traffic Commissioner for the Welsh Traffic Area who refused the Application by the Appellants, Nolan Transport, (“NT”) for the return of two Vehicles impounded by the Respondents, (“VOSA”).
2. The unusual constitution of the Tribunal, namely two judicial members and one specialist member was approved by the President of the Administrative Appeals Chamber in accordance with Paragraph 3(c)(ii) of the Practice Statement on the Composition of Tribunals, issued on 1 October 2010. In giving approval the President of the AAC had regard to the special difficulty of some of the points of law and the important points of principle raised by the appeal.
3. NT is an unlimited company established in the Republic of Ireland although all of the company’s shares are held by Vespasian and Trajan Limited, entities which are based in the Isle of Man. There are thirteen directors of the company, all of whom are siblings. The principal directors, for the purposes of this appeal, are Richard Nolan, who describes himself as being responsible for the strategy of the company and John Nolan who is responsible for IT and journey planning.
4. NT holds an operator’s licence to operate national haulage within the Republic of Ireland. The company also holds a community authorisation to undertake international carriage of goods. To that end it operates over 450 tractor units and over 1,000 trailers and employs 500 people. Its operating centre is in Co. Wexford but it has sales offices in London, Bridgend, Leicester and Cherbourg. NT’s predominant mode of haulage, within Great Britain, is the movement of trailers, which travel unaccompanied on ferries between Rosslare and either Fishguard or Pembroke Dock. At present, an average of 1,385 journeys a week are undertaken by NT vehicles within Great Britain, in order to undertake international carriage, cabotage operations and combined transport and to reposition trailers. As far as the management of NT was concerned, the movement of trailers travelling unaccompanied on the ferries fell within the definition of “international carriage”, a term which will be considered and explained in due course, together with the other expressions which have just been mentioned. NT does not hold an ‘operator’s licence’ in GB, in other words a licence, issued by a Traffic Commissioner, under the provisions of the Goods Vehicles (Licensing of Operators) Act 1995, ["the 1995 Act"]. In May 2011 two vehicles operated by NT were stopped by VOSA employees, on separate occasions. VOSA took the view that NT was operating in contravention of the 1995 Act and, as a result, they impounded both vehicles. The drivers and, at a later stage, those in charge of NT asserted that the vehicles were being operated within exemptions to the general requirement to hold an operator’s licence, or that, if they were wrong on this point, they did not know that the vehicles were being used in contravention of the 1995 Act. They applied to the Traffic Commissioner for the return of the vehicles on one or other of these grounds. Their applications were rejected by the Traffic Commissioner, from whose decision they have appealed to the Upper Tribunal.
5. Stated in very general terms, at this stage, the issues which arise from the Notice of Appeal, (which was amended with the permission of the Tribunal), are these:-
(i) Was the operation of one or other or both of the impounded vehicles lawful? [AG 1, 5].
(ii) If the operation of one or other or both of the impounded vehicles was unlawful was the Traffic Commissioner correct in concluding that NT had failed to establish that it did not know that they were operating unlawfully? [AG 2, 3, 4 & 5A].
(iii) Should the Traffic Commissioner, when considering whether NT had failed to show that they did not know that they were operating unlawfully, have assessed the position in relation to each vehicle separately and independently? [AG 5B].
(iv) Was the Traffic Commissioner wrong to take into account, on the issue of knowledge, the evidence he heard and/or the decision he made in connection with an application for an operator’s licence made by a subsidiary company of NT? [AG 6, 7 & 8].
(v) Was the Traffic Commissioner wrong to conclude that evidence given by Duncan Buchanan was unchallenged and, if so, do his comments as to his position, if the evidence had been challenged, require the Tribunal to remit the application for re-hearing before a different Traffic Commissioner? [AG 9].
(vi) Is it necessary to read or write into the impounding provisions an element of discretion or a requirement to consider ‘proportionality’ in order to render the legislation compliant with Article 1 of the Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms? [AG 10], (“The Protocol”).
OPERATOR’S LICENSING & EXEMPTIONS
6. Unless permitted to do so under an exemption it is unlawful, in Great Britain (“GB”), to use a goods vehicle on a road, for the carriage of goods, either for hire or reward or for or in connection with any trade or business carried on by the user of the vehicle, without holding a licence, (known as ‘an operator’s licence), issued under the Goods Vehicles (Licensing of Operators) Act 1995, ["the 1995 Act"]. See s.2 of the 1995 Act
7. Use of a goods vehicle in contravention of s.2 is a criminal offence punishable by a fine not exceeding £5,000. See s. 2(5) of the 1995 Act
8. Since NT did not hold an operator’s licence authorising them to use Heavy Goods Vehicles, (“HGV’s”), in Great Britain their claim to have been using the vehicles lawfully can only succeed if they can show that each impounded vehicle was, at the material time, being operated within an exemption to the general requirement to hold an operator’s licence. Hence the need to consider the scope of a number of exemptions and, in some cases, the requirements which must be fulfilled in order to rely on them.
9. The 1995 Act, [s.2(2)(b)], specifically excludes ‘international carriage’ from the requirement to hold an operator’s licence. The definition of international carriage is considered in paragraphs 13-16.
10. In addition, by s.2(2)(d) of the 1995 Act, Parliament gave power to make regulations exempting other classes of vehicles from the requirement to hold an operator’s licence. That power was first exercised to make the Goods Vehicles (Licensing of Operator’s) Regulations 1995. More recently those Regulations have been amended by the Goods Vehicles (Licensing of Operator’s) (Amendment) Regulations 2010, (“the 2010 Regulations”), to exempt ‘cabotage’ under Regulation (EC) No. 1072/2009 of the European Parliament and of the Council, (“Regulation 1072/2009”), from the requirement to hold an operator’s licence. The definition of ‘cabotage’ is considered in paragraphs 17-57.
11. A third category of exemption is relevant to this appeal, namely ‘combined transport’. As a result of Regulation 5(c) of The Goods Vehicles (Licensing of Operators) (Temporary Use in Great Britain) Regulations 1996, (“the 1996 Regulations”), s.2(1) of the 1995 Act does not apply to the use in Great Britain of a Northern Ireland or foreign goods vehicle for the carriage of goods between Member States of the European Community where the vehicle is being used on a journey for combined transport as defined in Article 1 of Council Directive 92/106/EEC, (“the 1992 Directive”). The definition of “combined transport” is considered in paragraphs 59-68.
12. Finally we should mention, for the sake of completeness, a further exemption, which is now set out in Article 1.5(d) of Regulation 1072/2009, though it can be traced back through a series of earlier provisions. We will refer to this as “temporary use under Article 1 of 1072/2009”.
13. It is important to start by considering the scope of International Carriage because it is the delivery of the goods carried on an international carriage which triggers the right to perform Cabotage operations. Cabotage was one of the exemptions relied on by NT.
14. The circumstances under which a journey amounts to international carriage are set out in Council Regulation (EEC) No. 881/92, (“the 1992 Regulation”). International carriage is defined in Article 2 in the following terms:-
“A journey undertaken by a vehicle the point of departure and the point of arrival of which are in two different Member States, with or without transit through one or more Member States or non-member countries”.
Article 2 also defines ‘vehicle’ in these terms:-
‘vehicle’ – “shall mean a motor vehicle registered in a Member State or a coupled combination of vehicles the motor vehicle of which at least is registered in a Member State and which are used exclusively for the carriage of goods”.
15. It is accepted that the impounded vehicles were owned by NT and that they were registered in a Member State, namely the Republic of Ireland. Initially the view taken by NT was that the definition of international carriage was either wide enough to apply to unaccompanied trailers, or if that was wrong, that it should be extended to cover such trailers. As we understand the position it is now accepted that that interpretation is wrong. In our view NT are right to make that concession. International carriage involves a journey by a ‘vehicle’. In the case of articulated vehicles the definition of vehicle requires that a trailer can only take part in international carriage if coupled to a tractor unit. To make the point crystal clear a journey undertaken by an unaccompanied trailer from, for example, a port in Ireland to a port in Wales, cannot amount to international carriage.
16. It may be helpful to make some further points. A journey by a tractor unit, whether coupled to a trailer or uncoupled, from the Republic of Ireland to Wales will be international carriage, because the journey starts in one member State and ends in another. However a journey, which starts in Northern Ireland, and ends in Wales will not be international carriage, even if the vehicle passes through the Republic of Ireland on the way, because the point of departure and the point of arrival are in the same member state. On the other hand if the journey starts in the Republic of Ireland, passes through Northern Ireland and ends in Wales it will be international carriage. Exactly the same results will apply if the journeys are reversed.
17. The definition of ‘cabotage’ is now set out in Regulation (EC) No. 1072/2009 of the European Parliament and of the Council, (“Regulation 1072/2009”). As a result of Article 19 the whole Regulation ‘entered into force’ on 4 December 2009. However Article 19 went on to provide that it was to apply as from 4 December 2011, with the exception of Articles 8 and 9, (which deal with cabotage) which were applied from 14 May 2010. It follows that these Articles had been in force for about a year by the time of the relevant impounding.
18. Article 8 sets out the general principles which apply to cabotage in these terms:-
“1. Any haulier for hire or reward who is a holder of a Community licence and whose driver, if he is a national of a third country, holds a driver attestation, shall be entitled, under the conditions laid down in this chapter, to carry out cabotage operations.
2. Once the goods carried in the course of an incoming international carriage have been delivered, hauliers referred to in paragraph 1 shall be permitted to carry out, with the same vehicle, or, in the case of a coupled combination, the motor vehicle of that same vehicle, up to three cabotage operations following the international carriage from another Member State or from a third country to the host Member State. The last unloading in the course of a cabotage operation before leaving the host member State shall take place within 7 days from the last unloading in the host Member State in the course of the incoming international carriage.
Within the time limit referred to in the first subparagraph, hauliers may carry out some or all of the cabotage operations permitted under that subparagraph in any member State under the conditions that they are limited to one cabotage operation per Member State within 3 days of the unladen entry into the territory of that member State
3. National road haulage services carried out in the host Member State by a non-resident haulier shall only be deemed to conform with this Regulation if the haulier can produce clear evidence of the incoming international carriage and of each consecutive cabotage operation carried out.
Evidence referred to in the first subparagraph shall comprise the following details of each operation:”
(a) the name, address and signature of the sender;
(b) the name, address and signature of the haulier;
(c) the name and address of the consignee as well as his signature and the date of delivery once the goods have been delivered;
(d) the place and date of taking over of the goods and the place designated for delivery;
(e) the description in common use of the nature of the goods and the method of packing, and in the case of dangerous goods their generally recognised description, as well as the number of packages and their special marks and number;
(f) the gross mass of the goods or their quantity otherwise expressed;
(g) the number plates of the motor vehicle and trailer”.
19. Before coming to the contentious issues concerning the interpretation of these provisions it may be helpful to set out a number of points about which there appears to be no dispute. The reason is that this will assist any haulier, from another Member State, who aims to carry out lawful cabotage operations in Great Britain.
20. Three points arise under Article 8.1. First, the haulier must hold a Community licence and second, if the vehicle in question is being driven by someone who is not a national or long-term resident of a Member State then that person must hold a driver attestation. Third, Article 4.3 provides that a certified true copy of the Community licence must be carried in each of the haulier’s vehicles and must be presented at the request of any authorised inspecting officer.
21. Two points arise out of Article 8.2. First, it is a pre-condition to the right to carry out cabotage operations that there has been an ‘incoming international carriage’. However for the purpose of triggering the right to conduct cabotage operations the definition of ‘incoming international carriage’ is narrower than that set out in paragraphs 13-16 above. The reason is that the right to conduct cabotage operations only commences once ‘the goods carried’ on the incoming international carriage ‘have been delivered’. In other words a tractor unit not coupled to a trailer can come within the definition of international carriage but it cannot trigger a right to conduct cabotage operations because it will not have delivered any goods.
22. The second point to arise under Article 8.2 is that cabotage operations must be carried out by the tractor unit responsible for the incoming international carriage. An operator can conduct cabotage operations using the same trailer used for the incoming international carriage or a different trailer. In our view the Regulation is quite clear in stating that a tractor unit other than the one which hauled the goods brought in on the international carriage cannot be substituted for the incoming tractor unit if the cabotage operation is to be lawful.
23. Article 8.3 of Regulation 1072/2009, (“Article 8.3”), gives rise to two issues, (the definition of haulier and the time at which clear evidence must be produced). But before we turn to them it is important to make one general point.
24. The general point concerns the way in which the first part of Article 8.3 has been drafted. Article 8.3 begins by stating that any use of a vehicle for the carriage of goods for hire or reward etc, (see paragraph 6 above), is national road haulage, (requiring a GB operator’s licence if it takes place in Great Britain), and “shall only be deemed to conform to this Regulation if the haulier can produce clear evidence” to bring it within the definition of cabotage. In our view it is for the haulier to produce the clear evidence. The clear evidence must satisfy each and every requirement in the list set out at the end of Article 8.3. Unless and until the haulier has produced the clear evidence, (including evidence of the incoming international carriage), to satisfy all the requirements of Article 8.3 the haulier will be unable to show that journeys made after delivery of the goods carried on the incoming international carriage amount to lawful cabotage operations. It follows that unless and until the haulier produces the clear evidence so that the journeys are ‘deemed’ to be cabotage operations they must be considered to be journeys in contravention of s.2 of the 1995 Act.
25. The first contentious issue in relation to Article 8.3 concerns the meaning of the word ‘haulier’. In the light of the submissions we received on this point we are satisfied that Mr Nesbitt is correct in submitting that for the purposes of the Regulation it means the operator of the vehicle, (whether a company, a partnership or an individual), as opposed to the driver, in other words in the present case it means NT. We were referred to a number of instances in the Regulation where the draftsman has contrasted ‘haulier’ on the one hand and ‘driver’ on the other, for example Article 8.1, (see paragraph 18 above). Given our conclusion it is not necessary to set out the other examples or to go into any greater detail.
26. The second contentious question in relation to Article 8.3 remains a very live issue, which we must now resolve. Put into the form of a question it can be stated in this way: “when is the operator required to produce the clear evidence required by Article 8.3”?
27. The Traffic Commissioner dealt with this issue between paragraphs 23 and 41 of his decision. It is only necessary to give a short summary of his reasoning and conclusions. He concluded that the expression haulier includes agents and employees, (he clearly had in mind drivers). He took the view, relying on his experience as a Traffic Commissioner that, if the paperwork was not held by the driver, enforcement would be wholly ineffective. He pointed out that he had been referred to documents prepared by the Irish and French Governments, (to which we will return in due course) in which they made it clear that, in their view, the documents had to be with the driver and that guidance had been given by the UK Government to the same effect. He relied on a number of passages in the recitals to Regulation 1072/2009 where the emphasis is on: “a simple clear and enforceable definition of ‘cabotage’” (recital 3.1), “clear and easily enforceable rules” (recital 15) and the need for “effective, proportionate and dissuasive penalties” (recital 25). Although it comes part way through his consideration of the timing of the production of the clear evidence it seems to us that this passage clearly states the Traffic Commissioner’s overall conclusion:
“Therefore I consider it proportionate to expect documentation to be available within a reasonable period of time. A reasonable period of time in this context is not more than minutes, enabling local enforcement officers to maximise efficiency and target those who they suspect of non compliance, to the benefit of all operators”.
28. On behalf of NT Mr Nesbitt challenged this conclusion. First, he submitted that once it was established that ‘haulier’ in Article 8.2 means the operator and not the driver it necessarily follows that the haulier is entitled to produce the clear evidence at a later stage, for example by producing documents kept in an office. Second, he submitted that both individually and collectively, the arguments advanced by VOSA relying on guidance from Governments, difficulty over enforcement, and references to the Impact Assessment prepared in May 2007, the ‘Proposal for a Regulation of the European Parliament and of the Council’, dated 1 June 2007, (“the Proposal”) and the preamble and recitals to the Regulation, were insufficient to displace the ordinary meaning of ‘haulier’. Third, he submitted that when assessing any difficulty in relation to enforcement we ought to bear in mind that it is unlikely that those drafting the cabotage provisions would have been aware of the nature of the enforcement regimes in different Member States. Fourth, he submitted that those drafting the cabotage provisions have no difficulty in expressly requiring material to be kept in vehicles, with the result that the absence of such a requirement in Article 8.3 is significant. Fifth he pointed to the fact that if a vehicle was stopped part-way through a cabotage operation it would not be possible, if the documents had to be in the vehicle, to provide the signature of the consignee, whereas if his submission was correct that could be done.
29. On behalf of VOSA Mr Hallsworth submitted that the correct approach to interpreting the meaning of the Regulation was to decide the purpose of these provisions. He went on to submit that when seeking to ascertain the purpose we are not confined to the words of Article 8, but that we are, instead, required to consider other material if it assists in showing that purpose. Mr Hallsworth relied on several passages from the preamble and recitals, including those relied on by the Traffic Commissioner, as well as the guidance given by Governments, to which we have briefly referred. He relied also on the Proposal. He pointed out the uncertainty and delay, which would result if Mr Nesbitt’s submission was correct. He added that there was a risk of fraud if the documents were not available in the vehicle itself.
30. During the course of the argument we asked whether it was accepted that we were entitled to have regard to the contents of the Proposal when deciding the meaning of Article 8. In his submissions Mr Nardell QC referred to the second paragraph of the preamble to Regulation 1072/2009, which reads “having regard to the Proposal from the Commission”. He submitted that this made it quite clear that the contents of the Proposal should be considered when deciding the correct interpretation of Article 8 and in particular the time at which the clear evidence must be produced.
31. In our view we are not restricted, when interpreting these provisions, to the meaning of the words which have been used. Instead we are required to take a broader view, which involves ascertaining the purpose of these provisions, in order to achieve an interpretation which serves that purpose. It seems to us that a good starting point is the preamble to the Proposal. We should explain, at this point, that we have used ‘preamble’ to refer to the un-numbered paragraphs at the start of the Regulation and ‘recital’ for the numbered paragraphs which follow after ‘whereas’. We have done this because recital is the word used in the draft Regulation annexed to the proposal. In paragraph two of the preamble it is made clear that the Regulation was drafted “having regard to the Proposal to the Commission”. We will come to the terms of the Explanatory Memorandum, at the start of the Proposal, in due course. The first recital in the Regulation makes it clear that substantial changes were to be made to earlier Regulations dealing with access to the market in the carriage of goods and to the conditions under which non-resident hauliers may operate national road haulage services. The paragraph concludes: “in the interests of clarity and simplification, those legal acts should be recast and incorporated into one single Regulation”. The last part of recital 2 provides: “those rules must be laid down in such a way as to contribute to the smooth operation of the internal transport market”.
32. Recital 10 requires that “roadside checks” must be carried out without direct or indirect discrimination on grounds of nationality etc. Recital 15 explains why it was considered necessary, in order to assist the enforcement of this Regulation, to define more clearly the frequency with which cabotage operations can be performed. Recital 18 returns to the question of controlling cabotage operations and provides: “In order to perform efficient controls of cabotage operations, the enforcement authorities of the host Member State should, at least, have access to data from consignment notes and from recording equipment…..”, (ie tachographs). Finally recital 25 provides that: “Member States should take the necessary measures to implement this Regulation, in particular as regards effective, proportionate and dissuasive penalties”.
33. In our view the preamble and the recitals indicate that the purpose of Regulation 1072/2009 is to provide for a clear and simple definition of cabotage operations, so that such operations can be effectively and efficiently controlled in a way which contributes to the smooth running of the internal transport market. The Regulation was intended to resolve two problems which had emerged in relation to the earlier cabotage provisions. One was a lack of clarity as to what they meant, resulting in differing interpretations in different Member States. The other, perhaps at least partly because of the lack of clarity, was inconsistency in enforcement as between different member states.
34. The Impact Assessment is dated 23 May 2007. One purpose of the document was to assess the impact of each of the proposals for the reform of the definition of Cabotage. In our view reference to comments on proposals which were not adopted does not assist us. However one comment on the proposal which was adopted is important. It is this: “this measure would encourage more efficient controls and time spent during roadside checks would be reduced”.
35. The Proposal for a new cabotage Regulation is dated 1 June 2007. The last part of the Proposal consists of a draft of what has now become Regulation 1072/2009, with various drafting changes apparent on the face of the document. In particular Articles 8.2 and 8.3 are said to be new material. It is significant that these new paragraphs are in very similar terms to the final wording of Articles 8.2 and 8.3 contained in Regulation 1072/2009.
36. The first part of the Proposal consists of an Explanatory Memorandum. Paragraph 1.1 deals with the motivation and objectives of the Proposal. The paragraph ends: “the recast of these regulations is therefore to enhance the clarity, readability and enforceability of the current rules”. Some of the concerns which provided the general context for the proposal were that Member States were tending to implement divergent rules, which were difficult to enforce or which imposed an additional administrative burden, (paragraph 1.2). Other relevant considerations, in paragraph 1.4, are that the Proposal aimed to improve the efficiency of the internal market for road haulage by: “enhancing the legal certainty, cutting administrative costs and allowing fairer competition”. In addition it was stated that it would contribute “indirectly to improving road safety by a more effective monitoring of undertakings which operate in several Member States”.
37. Paragraph 3.1 sets out a summary of the proposed measures under the heading ‘Legal Elements of the Proposal’. The first and second sub-paragraphs set out some of the substantial modifications which were being proposed. We quote them in full:-
“- A simple, clear and enforceable definition of ‘cabotage’ allowing for up to three transport operations consecutive to an international journey and within seven days and the obligation for the holder to keep in the vehicles documents like the consignment letters which show the date and place of arrivals and departure;
- a simplified and standardized format for the Community licence, certified copies and the driver attestation in order to reduce the administrative burden and delays especially at road side checks”.
38. Paragraph 5.4 is entitled ‘detailed explanation of the proposal’. The second paragraph explaining Article 8 reads as follows:-
“Enforcement bodies will be able to check more easily whether cabotage is lawful by looking at the CMR consignment letters which indicate the dates of loading and unloading of an international carriage. For the sake of completeness Article 8 therefore identifies the information which should be documented and available within the vehicle, knowing that these data are in the CMR consignment letters used in all international transport. Such definition would allow for instance an efficient operator doing regular international transport to optimize the loading of its vehicle and to reduce their empty returns”.
“CMR” is the abbreviation for “Convention relative au contrat de transport international de marchandises par route” otherwise known as “The Convention on the Contract for the International Carriage of Goods by Road 1956”.
39. In our view the passages which we have just quoted make a number of important points which are relevant to the answer to the question: when is the operator required to produce the clear evidence required by Article 8.3? First there is concern that the new definition of cabotage should be simple, clear and enforceable. Second, it is envisaged that there should be a ‘paper-trail’, which will enable enforcement officers to check whether or not the vehicle is conducting a lawful cabotage operation. Third, in order to enable enforcement officers to do this more easily and thus keep delays to a minimum hauliers are to be required to keep the documents forming the ‘paper-trail’ in the vehicle so that enforcement officers can take decisions at road side checks. However there is one respect in which the quotation from paragraph 5.4 is not entirely accurate. We were told that CMR documents are not used in connection with the transfer of goods between Ireland and the UK and vice versa. However the clear evidence required by Article 8.3 is set out in general terms and we can see no reason why the fact that CMR documents are not used should alter the answer to the question about where the documents are to be kept and when they are to be produced.
40. Mr Hallsworth supported his submissions on this point by relying on the delay and inconvenience which would result if Article 8.3 was interpreted in a way which enabled the haulier to produce documents from its office or offices at a later date. Mr Nesbitt submitted that this concern was overstated and that, in any event, there was no evidence that those responsible for Regulation 1072/2009 would have been aware of the impounding regime in force in Great Britain.
41. We can deal with the suggestion that those responsible for Regulation 1072/2009 would have been unaware of the impounding regime in Great Britain quite quickly. We have already set out some parts of Regulation 881/92, which deals with ‘international carriage’. Article 14 of that Regulation provides that: “The Member States shall communicate to the Commission the measures they take to implement this Regulation”. One of the measures taken in Great Britain was the creation of the impounding regime in 2001, which we will describe in detail in due course. In our view, in the absence of any evidence that the UK Government failed to communicate details of the impounding regime, we are entitled to assume that they acted correctly and did so. Accordingly, in our judgment, we should proceed on the basis that the Commission was aware, when Regulation 1072/2009 was drafted, that one enforcement measure, which would be used in Great Britain, would be impounding. It is worth noting, in passing, that Great Britain is not alone in having an impounding regime. In a document, issued in English by the relevant French Government Department, which was intended to explain the French cabotage regulation the following appears in relation to penalties:
“Company vehicles that fail to abide by the cabotage regulation may be impounded until infringement has ceased and may be liable for a fine of €15,000”.
42. In order to assess the impact of the differing submissions as to when the clear evidence must be produced we must refer to three topics, which were considered during the hearing under Regulation 11 of Goods Vehicles (Enforcement of Powers) Regulations 2001, (“the Impounding Hearing”).
43. First, the Traffic Commissioner pointed out that it was within his knowledge that there were areas in Wales where mobile phone reception was either poor or non-existent. We accept that strictly speaking this is not evidence. However it seems to us that this is a matter of common knowledge of which we can take judicial notice. Indeed each member of the Tribunal has had recent personal experience of poor or non-existent mobile phone reception in different parts of Great Britain.
44. In our view difficulties over mobile phone coverage are reduced, though not removed, if the documents must be kept in the vehicle. If VOSA are able to check the documents at the roadside and all is in order the driver can be sent on his way. We accept that the driver may need to make a call, if there has been a significant delay, but in this situation he would be free to move to an area with better reception, if necessary. On the other hand if the documents are not in order or are not required to be in the vehicle we accept that the position becomes more difficult. Contact would then have to be made with the haulier to see where and when the matters required by Article 8.3 could be made available. In addition if the question of whether or not to impound the vehicle arose it might be necessary for VOSA to obtain authority to do so. We set out the evidence surrounding both impoundings below, it is sufficient to say, at this stage, that on 17 May Traffic Examiner, (“TE”), Matthews did ask for authority while on 20 May it appears that Senior Vehicle Examiner, (“SVE”), Rustage did not.
45. The second topic arises from the evidence of John Nolan, who said that it could take 24/48 hours to collect together the relevant documents. He described some of the factors which could cause delay. One was the notorious difficulty in getting documents out of drivers another was the need for the driver to find a fax machine so that material could be transmitted by or to the driver. He added that a delay of 24/48 hours would be ‘not untypical’.
46. The third topic concerns another NT vehicle which was impounded on 13 April 2011 but was subsequently returned. We will set out the facts relating to this vehicle in greater detail when we turn to the issue of ‘knowledge’. Suffice it to say, at this stage, that the driver was unable to produce the paperwork. There was some discussion between VOSA and NT as a result of which it was agreed that VOSA would release the vehicle if NT produced a satisfactory ‘paper-trail’ and also agreed that they understood VOSA’s policy and its application to cabotage and combined transport. The paperwork was produced at 15.15 pm on 14 April, which was after the deadline for advertising the fact that the vehicle had been impounded. The paperwork was then forwarded to the VOSA officer responsible for the impounding so that he could compare it to the information from the tachograph charts recovered when the vehicle was impounded. In the event the vehicle was not released until 4 May 2011, partly because the VOSA officer responsible for stopping the vehicle was not, immediately, available to check the documents sent by NT. In other words in this particular instance the fact that the paperwork was not available to be checked at the roadside resulted in the vehicle being out of action for three weeks.
47. The impounding regime was created by the Goods Vehicles (Enforcement of Powers) Regulations 2001, (“the 2001 Regulations”). At this stage it is only necessary to refer to two regulations. First, regulation 3(1) provides: “Where an authorised person has reason to believe that a vehicle is being, or has been, used on a road in contravention of section 2 of the 1995 Act, he may detain the vehicle and its contents”. (Authorised person is defined in paragraph 1(1) of Schedule 1A to the 1995 Act. It means an “examiner appointed by the Secretary of State under s.66A of the Road Traffic Act 1988 or a person acting under the direction of such an examiner”). Second, regulation 9(1)(a) requires the authorised person who has detained a vehicle under regulation 3(1) to publish a notice in the London Gazette, which must contain the details set out in the four sub-paragraphs which follow. We have been unable to find any specific provision as to the time within which the notice must be published. In our view that means that it must be published within a reasonable time. Given the urgency generally required when resolving issues in relation to impounding we are satisfied that for these purposes a reasonable time is to be measured in days not weeks.
48. We have already pointed out that Article 8.3 effectively says that a vehicle is performing national road haulage services unless and until clear evidence is produced by the haulier, that the vehicle is and has been conducting cabotage operations. When national road haulage services are performed in Great Britain, by a vehicle not authorised under an operator’s licence issued by a Traffic Commissioner in Great Britain, there is a breach of section 2 of the 1995 Act. It follows, in our judgment, that if a vehicle, which is claimed to be conducting cabotage operations, is stopped and the clear evidence, which must be produced in accordance with Article 8.3 is not immediately available, that the authorised person who has stopped the vehicle will have “reason to believe that the vehicle is being or has been used on a road in contravention of s. 2 of the 1995 Act”. In other words if the documents are to be made available at a later stage one consequence is that VOSA may be entitled to impound the vehicle and it’s contents. If they decided to impound they would then have the right to immobilise the vehicle or to remove it. In our view one only has to set out the potential consequences, which would flow from permitting the haulier to produce the clear evidence at a later date, to see that this interpretation would not achieve an efficient and effective enforcement regime nor would it contribute to the smooth operation of the internal transport market.
49. Mr Nesbitt has stressed that there is no express time limit in Article 8.3 within which the clear evidence must be produced. In our view this must mean that it has to be produced within a reasonable time. It seems to us that any decision as to what is or is not a reasonable time has to be determined by considering the impact on the purposes of the Regulation. It is difficult to see how a time limit which assists in achieving the purposes of the Regulation could be anything other than a reasonable time limit. By contrast a time limit which makes it more difficult, or worse, impossible, to achieve the purposes of the Regulation would be an unreasonable time limit. Mr Hallsworth submitted that the purposes of the Regulation would be best served by allowing drivers no more than a short time to put the paperwork together, at the roadside. Mr Nesbitt submitted that the period should be long enough to allow for the production of documents from the haulier’s office or offices, though he accepts that it could not be an extended period. He reinforced that submission by pointing out that if a vehicle is stopped part-way through a journey the driver will be unable to produce the signature of the consignee, as required by Article 8.3 whereas if documents can be produced at a later stage the problem can be solved. There are two answers to this point. First, the documents may not be available at a later date if the vehicle and its load are impounded, because in that situation the load may not be delivered. Second, the relevant sub-paragraph of Article 8.3, sub-paragraph (c), expressly contemplates that the date of delivery will not be available until the goods have been delivered, arguably that qualification applies to the signature of the consignee as well.
50. If Mr Nesbitt’s submission on this issue is correct we do not understand him to be saying that hauliers could be prevented from having the clear evidence available in the vehicle. As we understand his submission he is simply saying that hauliers should have the choice of keeping the documents in the vehicle or producing them at a later stage. In our view this illustrates another problem with this submission, namely that it is likely to introduce an inconsistency in approach because some hauliers will opt to keep the documents in their vehicles while others will opt to produce them later.
51. At this stage we propose to consider what impact the rival contentions as to a reasonable time would have on the purposes of the Regulation 1072/2009 which we have identified above. We will do this under three headings, though we accept that there is some overlap between them:
(i) A simple, clear and enforceable definition of cabotage.
A requirement that the clear evidence is available in the vehicle so that it can be checked at the roadside is simple, clear and easily understood. Any haulier who wishes to conduct cabotage operations in Great Britain will know what is required, what will be expected by the enforcement authorities and what their drivers and customers must do. The enforcement authorities will know what they can require the driver to produce and when. By contrast permitting the clear evidence to be produced within a reasonable time, without defining what that is, is likely to result in different interpretations according to the requirements of the different enforcement regimes in different member states. The result, in our view, would be to run the risk of bringing back the uncertainty, lack of clarity and inconsistency, which the new Regulation was intended to remove. In our view a requirement to produce the clear evidence at the roadside furthers the purposes of the Regulation while permitting any greater delay in production will tend to frustrate them.
(ii) Clear and easily enforceable rules allowing efficient controls.
A requirement that the clear evidence is available in the vehicle so that it can be checked at the roadside is clear and easily enforceable. It allows VOSA to operate efficiently by making checks at the roadside, with all the material, including information from the tachograph available. While this may not eliminate the risk of fraudulent documentation, whether in relation to the Article 8.3 documents or in relation to the tachograph records (or both), it seems to us that it makes it much less likely. It also allows VOSA to make decisions more quickly so that a vehicle, which is operating lawfully, can be allowed to proceed as soon as the relevant checks have been completed. By contrast permitting production of the clear evidence at a later unspecified date is neither clear nor so easily enforceable. In addition it is likely to be less efficient for two reasons. First, it may mean that VOSA officers have to spend time in the office checking documents produced at a later date, when they ought to be making checks at the roadside. Second, it may mean vehicles and, perhaps, also their loads being detained until the paperwork has been checked.
(iii) More effective monitoring, contributing to road safety, without disproportionate interference with the smooth operation of the internal transport market.
One of the main reasons for the operator licensing regime is its contribution to road safety, by ensuring, amongst other things, that operators maintain their vehicles properly and have appropriate financial resources with which to do so. Because road safety is taken so seriously the European Community has set common standards which are to be met by all Member States. Effective monitoring of cabotage operations makes an important contribution to road safety because it ensures that vehicles registered in another Member State, which are outside the jurisdiction of Traffic Commissioners, can only operate in Great Britain within permitted exemptions to the operator’s licensing regime. In the case of cabotage operations that means within the limitation of three cabotage operations within seven days of unloading after an international carriage. If this exemption is effectively monitored and enforced it ensures that a vehicle, registered in another Member State, which is therefore outside the jurisdiction of the Traffic Commissioners, cannot operate in Great Britain as if it had a GB operators licence. In our view, for the reasons already given, requiring production of the clear evidence at the roadside furthers the aim of effective monitoring and, indirectly contributes to ensuring the safe operation of HGV’s on Great Britain’s roads. By contrast permitting the clear evidence to be produced later means that monitoring will be less effective because VOSA officers will be able to devote less time to it.
In our view requiring production of the clear evidence at the roadside achieves an acceptable balance between effective and efficient enforcement on the one hand and the smooth running of the internal transport market on the other. Again, by contrast, permitting hauliers to produce the clear evidence at a later stage may result in avoidable delay resulting in an unacceptable and disproportionate interference with the smooth running of the internal transport market.
52. We are very conscious of the fact that we have dealt with this question at great length. We have done so because the answer to the question we have posed is not confined to one of the issues which arise in this particular appeal. While this decision stands the answer will apply to every haulier, from another Member State, who wishes to conduct cabotage operations in Great Britain. In our view they are entitled to know where they stand and what steps they must take to operate without breaching s. 2 of the 1995 Act.
The answer to the question posed in paragraph 26 above.
53. In our judgment the material to which we have referred and the reasons we have given in paragraph 51 provide an unambiguous answer to the question, namely that the clear evidence, required by Article 8.3, must be kept in the vehicle and must be made available for inspection at any roadside check. We are satisfied that this interpretation provides for effective, efficient and proportionate enforcement which will better achieve the purpose of the Regulation than permitting the clear evidence to be produced at a later stage. In our view permitting the clear evidence to be produced at a later stage is likely to frustrate the purpose of the Regulation by re-introducing uncertainty and inconsistency as to both interpretation and enforcement.
54. At first sight there appears to have been an omission in Article 8.3, in that it makes no reference to a requirement to provide clear evidence of any journey after the third cabotage operation. After reflection we have come to the conclusion that this was a deliberate choice on the part of the draftsman and a choice made for good reason. Article 8.3 limits cabotage to three journeys, so talk of ‘fourth’ cabotage journeys is a contradiction in terms. Any journey made after a third cabotage operation will be a ‘national road haulage service’ unless it can be brought within the terms of an exemption other than cabotage, for example international carriage or combined transport. In other words it was unnecessary in Article 8.3 to set out a requirement to produce documents in relation to a journey after the third cabotage operation because the evidence required to show that some other exemption applies will be the evidence required to establish that exemption, not the evidence required to establish cabotage.
55. We do not believe that Groupage is defined in any Regulation or Directive, if it is, our attention was not directed to the definition. Judging by the evidence of Duncan Buchanan, (Head of the Operator Licensing Policy Branch of the Department of Transport), it is a concession, made for practical reasons, to determine how multiple collections and/or deliveries are to be counted towards the limit of three cabotage operations. In his witness statement Mr Buchanan said this, quoting the answer he gave to a question raised by his Irish counterpart:
“The trailer collected from the port in the UK is a single domestic collection. It is permitted to make multiple drops as a single job if there is a single collection point with multiple destinations. Conversely, if there are multiple collection points with a single destination (say the port en route back to an Irish port), that too is considered a single job.
However, care is needed. If there are multiple collections and multiple deliveries within the UK it can be considered to be multiple jobs. We have determined, for the purposes of enforcement of cabotage, that in such circumstances that we will take the number of collections made or the number of deliveries made – whichever is the lowest.
Example: 2 collection points – 7 delivery points would be considered to be 2 jobs”.
56. In his evidence Mr Buchanan stressed a point made in the minutes of the European Commission Committee on Road Transport meeting on 25 October 2010 that “a cabotage operation is always related to one transport document (CMR) or other). A cabotage operation can involve several loading points, several delivery points or even several loading and delivery points, as the case may be”. In cross examination Mr Buchanan stressed that for groupage to apply to multiple collections with one delivery or one collection with multiple deliveries there had to be one document covering all the operations if they were to be counted as one cabotage operation.
57. Our provisional view is that Mr Buchanan’s evidence provides a workable solution to any issues raised by multiple collections and/or deliveries. However hauliers need to remember that if they seek to rely on groupage then the multiple collections and/or deliveries must all be related to one transport document, whether it is a CMR or some other form of transport document.
Temporary Use Under Article 1
58. Article 1.1 of Regulation 1072/2009 provides that the Regulation “shall apply to the international carriage of goods by road for hire or reward for journeys carried out within the territory of the Community”. Article 1.4 provides that the Regulation applies to “the national carriage of goods by road undertaken on a temporary basis by a non-resident haulier as provided for in Chapter III”. We have underlined the words ‘temporary basis’ because we wish to stress the importance of this qualification. Chapter III begins with Article 8. Accordingly it is the chapter which deals with cabotage operations. Article 1.5 provides:
“The following types of carriage and unladen journeys made in conjunction with such carriage shall not require a Community licence and shall be exempt from any carriage authorisation:
… (d) carriage of goods in motor vehicles provided that the following conditions are fulfilled”.
Five conditions are then set out. Articles 8.5 and 8.6 also refer to what we have called temporary use under Article 1 of 1072/2009. We have referred to this exemption for the sake of completeness. It was relied on by Mr Nesbitt to explain some of the movements of one of the impounded vehicles. The extent of this exemption was disputed by Mr Hallsworth but the movements in question had not been counted by VOSA when calculating the number of cabotage operations so it is unnecessary to resolve the dispute in deciding this appeal. Nevertheless we highlight two questions which may need to be resolved. First, does the towing of an unloaded trailer amount to the ‘carriage of goods in a motor vehicle’? Second, can the towing of an unloaded trailer, owned by the haulier, amount to the ‘carriage of goods’? The Transport Tribunal’s decision in 134/2002 WC Commercials Ltd related to an operator who was hauling empty trailers belonging to someone else in the course of a business involving the repair of vehicles and trailers. It does not necessarily follow that the same conclusion will apply in the case of a haulier hauling its own trailers.
59. This exemption to the requirement to hold an operator’s licence, when conducting transport operations in Great Britain, arises out of Council Directive 92/106/EEC of 9 December 1992, [“the 1992 Directive”], which was transposed into the law applicable in Great Britain by the 1996 Regulations, (see paragraph 10 above).
60. Article 1 of this Directive defines Combined Transport in this way:-
“For the purposes of this Directive, ‘combined transport’ means the transport of goods between Member States where the lorry, trailer, semi-trailer, with or without tractor unit, swap body or container of 20 feet or more uses the road on the initial or final leg of the journey and, on the other leg, rail or inland waterway or maritime services where this section exceeds 100 km as the crow flies and made the initial or final road transport leg of the journey:
– (this provision is confined to rail journeys, which are irrelevant to this decision).
– within a radius not exceeding 150 km as the crow flies from the inland waterway port or seaport of loading or unloading”.
61. In our view the easiest way in which to understand this provision, in the circumstances of this particular case, is to treat it as a journey split into three sections. In this case one section, it can be the first or the last, takes place on the roads of the Republic of Ireland, which happens to be the Member State of establishment for NT so it is a national journey. The middle section must always be a rail, inland waterway or maritime journey which exceeds 100 km, as the crow flies, between the start point and the arrival point. Finally the third section, which can either be the last or the first, depending on whether the journey has started or is to finish in the Republic of Ireland, must comply with the relevant restriction because when this section takes place in Great Britain it requires an exemption from the normal requirement to hold an operator’s licence.
62. We understand that it is now accepted that the journeys made by NT vehicles both to Pembroke Dock and to Fishguard exceed the 100 km minimum for the maritime section of the journey. At an early stage in this case it was being argued that as long as the loading or unloading point in Great Britain was within the 150 km radius of the seaport of loading or unloading it did not matter if the vehicle went outside the 150 km radius in the course of the journey. The practical importance of this argument was that both Pembroke Dock and Fishguard are more than 150 km from the Severn Bridge, whereas there are areas in, for example Somerset, that come within that radius. That argument has not been put forward at the hearing of the appeal.
63. In our view the terms of Article 1 are perfectly clear. They require that the whole of the journey within Great Britain must be made within the radius not exceeding150 km as the crow flies from the port of loading or unloading. That view is supported by the contrast in the way in which the rail, inland waterway or maritime section of the journey has been defined. It is also supported by the preamble to the Directive, which makes it very clear that one important objective is to reduce congestion on the roads and to limit the distance travelled by road.
64. By contrast with the provisions in relation to cabotage operations there is no express time restriction within which a combined transport operation must take place. However it is important to remember the full title of the 1996 Regulations: namely ‘The Goods Vehicles (Licensing of Operators) (Temporary Use in Great Britain) Regulations’. The underlining of ‘Temporary Use in Great Britain’ is ours, because in our view this makes it plain that the use of a vehicle in Great Britain, in order to conduct combined transport operation, must be temporary. The only question is beyond what period of time does use for combined operations cease to be temporary. The answer, at least for the time being will depend on the facts of each case in which the question arises.
65. Article 3 of the 1992 Directive contains important provisions in relation to the documentation required to establish that a journey comes within the exemption for Combined Transport. Regulation 5(c) of the 1996 Regulations expressly requires that, for the exemption from s.2(1) of the 1995 Act to apply:
“there is carried on the vehicle, or, in the case of a trailer, on the vehicle drawing it, a document which satisfies the requirements of Article 3 of that Directive, or a document issued by the competent authority of the Member State where the vehicle, or in the case of a trailer, the vehicle drawing it, is registered certifying that the vehicle is being used on such a journey”.
In order to comply with Article 3 of the 1992 Directive there must be a document which, at least, fulfils the requirements laid down in Article 6 of Council Regulation No. 11 of 27 June 1960, [“the 1960 Regulation”], but it must also specify “the ……. maritime loading and unloading ports relating to the maritime section of the journey”. Article 3 continues by providing that: “These details shall be recorded before the transport operation is carried out and shall be confirmed by means of a stamp affixed by the … port authorities in … the sea ports concerned when that part of the journey carried out by … sea has been completed”. The underlining is ours because it is important to stress first, that the requirement to record the details is mandatory and second, that it must be done before the journey is carried out. In our view that means before the journey begins and not as the journey progresses.
66. Article 6.1 of the 1960 Regulation provides that:-
“A transport document giving the following details shall be required for each consignment of goods within the Community:
– name and address of the consignor;
– nature and weight of the goods;
– place and date of acceptance of the goods for transport;
– place at which the goods are to be delivered;
– route to be taken, or distance to be travelled, if these factors justify a rate different from that normally applicable;
– frontier crossing points, where appropriate”.
67. Article 6.2 of the 1960 Regulation provides that:-
“Transport documents shall be made out in duplicate and shall be numbered. One copy shall accompany the goods; the other copy shall be retained by the carrier for two years …”.
Article 6.4 goes on to add that:- “the carrier shall be responsible for the proper preparation of transport documents”.
68. In our view the effect of all the provisions relating to Combined Transport, when taken together, is that the haulier or carrier must prepare a document, before the journey starts, setting out all the relevant information. This document must be carried in the vehicle, (see Article 5(c) of the 1996 Regulation). As the journey progresses the document must be confirmed by the addition of Port Stamps. If these provisions are followed it ought to be a relatively simple matter for a VOSA officer, who stops the vehicle, to determine whether it is being operated in breach of s.2 of the 1995 Act or whether it is exempt because the documents establish that it is engaged in Combined Transport.
69. We have already explained why, in our view, the movement of an unaccompanied trailer from one Member State to another cannot amount to international carriage. It seems to us that once an unaccompanied trailer has arrived at a port in Great Britain there are certainly three ways in which it can be moved, without a breach of s.2 of the 1995 Act. First, it can be moved by a tractor unit authorised under an operator’s licence issued by a Traffic Commissioner in Great Britain. Second, it can be moved by a tractor unit, which is entitled to carry out cabotage operations. Third, it can be moved by a tractor unit not authorised under an operator’s licence issued in Great Britain, provided the whole of its journey comes within the provisions relating to Combined Transport. Whether there is any other way in which a loaded trailer can be moved was not the subject of argument. If it ever arises the point must be decided in another appeal. It was submitted by Mr Nesbitt that an unloaded trailer can be moved under the exemption for temporary use under Article 1 of Regulation 1072/2009, provided, of course, that all the conditions required to conduct such operations are met. As we have indicated the point was not fully argued. If it arises it must be decided in another appeal. We have pointed out in paragraph 56 that that it does not necessarily follow, from the decision in 134/2002 WC Commercials Ltd that hauling trailers which are owned by the haulier amounts to the carriage of goods.
Exemptions – a general conclusion
70. In our view there is a common feature running through all the exemptions to which we have referred, namely that they permit the temporary use of HGV’s in Great Britain by operators from other Member States, who hold a Community Authorisation but who do not hold an operator’s licence issued in GB. We are satisfied that these exemptions, whether taken singly or in combination, are not intended to allow an operator, who does not hold an operator’s licence issued in GB, to operate in parallel to but outside the operator’s licensing regime created by the 1995 Act and the Regulations made under it.
THE FACTS SURROUNDING THE IMPOUNDINGS
DAF Tractor Unit 07WX6976 (“the Daf”)
71. On 17 May 2011, TE, Christopher Matthews was on duty at a mobile vehicle check on the A477 in Pembrokshire. He was in the company of Karen Raynor, a VOSA accredited stopping officer and VE Neil Thomas. At about 11.30hrs, the officers observed the Daf with a laden trailer in the livery of NT heading east. Mrs Raynor put the VOSA stopping car into a position where the driver could see it in his mirror and signalled the vehicle to stop and it did so by entering a lay by at the last moment without signalling. The driver was Stephen Hughes. Mr Hughes informed TE Matthews that he could not check his tachograph records because he had pulled into the lay by to take his break and that the officers would have to wait for 45 minutes. When reminded that VOSA had stopped him, Mr Hughes contended that such a stop was illegal and that he had stopped of his own accord. Mr Hughes did eventually produce his tachograph records along with a community authorisation, a ferry ticket dated 2 March 2011 for the vehicle, a book of NT consignment notes, a transfer note for his current load and 53 NT cabotage/combined transport documents. He maintained that he was undertaking a combined transport operation from Pembroke Dock to Tiverton Devon.
72. TE Matthews was of the opinion that the operation could not have been a combined transport operation because firstly, the goods were being transferred from Northern Ireland which is within the UK to a destination which was also within the UK; secondly, the vehicle was required to leave the permitted radius of 150 kms during its journey in order to use the Severn crossing and thirdly, the destination itself was outside the 150kms radius. In addition, upon examination of the Transfer Note produced in relation to the operation being undertaken by Mr Hughes (it being the only document relevant to the operation in his possession), whilst it recorded the name and address of the consignor, the nature of the goods, the place from which the goods were transferred, and the place at which the goods were to be delivered, the document did not state the weight of the goods, neither was there a stamp affixed to it by the port authority confirming when the journey by sea had been completed. The documentation did not therefore comply with the provisions of Article 6 of the 1960 Regulation, (see paragraph 66). It is of note that no additional documentation has since been produced by NT in order to remedy the defects found by TE Matthews.
73. Having discounted combined transport, TE Matthews then considered whether the journey could have complied with the cabotage rules. However, it could not because the tractor unit entered the UK on 2 March 2011 and was outside the seven day window for undertaking lawful cabotage.
74. In relation to the remainder of the paperwork in the possession of Mr Hughes, it revealed that the vehicle had left the 150kms radius area on 27 occasions for the purposes of reaching the loading/unloading address; that the delivery/collection address had been outside the 150kms radius on 16 occasions; that the loading/unloading address of the load had been Northern Ireland on 5 occasions; that the documentation was not generated prior to the journey commencing but rather was generated by the driver at Pembroke Dock; that the addresses on many of the forms were not completed in full.
75. Having consulted Caroline Hicks (National Enforcement and Compliance Manager for VOSA), a decision was made to detain the vehicle at which point Mr Hughes became abusive.
Mercedes Actros 2 axle articulated vehicle 03WX718, (“the Mercedes”).
76. On 20 May 2011, SVE Geoffrey Rustage was on duty at a police led heavy goods vehicle check at Carmarthen Mart site on the A40 as part of Operation Mermaid. At about 21.00hrs, he approached the Mercedes, which was coupled to a refrigerated 3 axle trailer. The trailer was loaded with peaches which had originated in Spain. The vehicle and trailer bore the NT livery.
77. The driver, Krystian Waclaw Lenik, produced documentation relating to the journeys he had undertaken whilst in the UK. Following discussions with the driver and examination of the paperwork, SVE Rustage became concerned that the vehicle may have been operating in breach of the cabotage rules. It was not possible to interview the driver upon the matter as he had become extremely distressed and angry.
78. SVE Rustage formed the following view upon the paperwork produced:-
(i) The tractor unit with an accompanying trailer had entered the UK on 16 May 2011 via Pembroke Dock and delivered to Sittingbourne, Kent. The paperwork in relation to this journey was compliant with the rules and established that the incoming journey was international carriage;
(ii) On 17 May 2011, the vehicle then undertook three separate collections, one in Sittingbourne and two in London. In relation to each of those collections, the NT consignment note produced by the driver had been signed to acknowledge that the load had been received intact. The paperwork in relation to all three collections/deliveries did not comply with Article 8(3). SVE Rustage, considered that the paperwork demonstrated that three cabotage journeys had taken place on 17 May 2011;
(iii) On the same day, the trailer was dropped at Pembroke Dock and a loaded trailer was collected.
(iv) On 18 May 2011, the consignment note indicated that the trailer, which had been collected was to be delivered to Cembrit Limited. The consignment note had been signed to acknowledge safe receipt of the goods. The driver was also able to produce a delivery note. SVE Rustage was content that apart from the absence of a signature of the consignor on the documents, the documents were compliant. In his view upon the basis of the paperwork, this was the ‘fourth cabotage operation’ and therefore an unlawful domestic journey;
(v) On the same day, the tractor unit with the same trailer collected another trailer from Georgio Pacific GB Ltd. The paperwork produced was not compliant. It did not state where the trailer was going; whether it was loaded or empty and if the former, the nature of the load and the required details. In the circumstances SVE Rustage took the view that this operation could not be deemed to be cabotage with the result that it was an unlawful operation (the fifth domestic journey);
(vi) On the same day there was another consignment note (without trailer details) which recorded that the trailer was dropped and another trailer was collected from Pembroke Dock. This trailer was dropped at Intertissue, Baglan. It was unclear from the paperwork whether the trailer was loaded. That trailer was then dropped and another trailer was collected. The paperwork is marked “M/T” which is an abbreviation for “empty”. SVE Rustage did not take the operation of transferring this trailer into account.
(vii) On 19 May 2011, the trailer was taken to Celsa Steel UK Ltd. The paperwork did not comply with the regulations. There appeared then to be a problem with the tractor unit.
(viii) On 20 May 2011, the trailer collected from Celsa Steel UK Ltd was driven to Junction 30 on the M4 and was swapped with the cargo of peaches. SVE Rustage considered this to be the sixth domestic journey.
(ix) The vehicle was then stopped on its way to Pembroke Dock. SVE Rustage took the view that this was the seventh domestic journey.
79. SVE Rustage made the decision to impound the vehicle. He suspected that the number of cabotage operations had exceeded three in seven days; the required documentation fell far short of that required; warnings both written and verbal had been given to NT in the past and little, if any, regard had been taken of them.
80. In June 2010 separate applications were made for return of both vehicles under regulation 10 of the 2001 Regulations upon the basis that at the time the vehicles were detained: (a) they were not being and had not been used in contravention of s.2 of the 1995 Act and/or (b) that NT did not know that they were being, or had been used in contravention of s.2 of the 1995 Act.
The RIGHT to IMPOUND and CLAIMS for RETURN.
81. The Transport Act 2000, (“the 2000 Act”), amended the 1995 Act in two ways. First, by s.262(1) it added s.2A, which simply provides that Schedule 1A to the 1995 Act, ‘shall have effect’. Second, by s.262(2) it added Schedule 1A, which contains detailed powers to make Regulations concerning the detention etc of goods vehicles used in contravention of s.2 of the 1995 Act and, in paragraph 9(4) of Schedule 1A, it sets out grounds for return which may be included in the Regulations.
82. The right to impound goods vehicles is set out in regulation 3(1) of the Goods Vehicles (Enforcement of Powers) Regulations 2001, (“the 2001 Regulations”), which came into force on 4 January 2002. Regulation 3(1) of the 2001 Regulations is in these terms:-
“Where an authorised person has reason to believe that a vehicle is being, or has been, used on a road in contravention of s.2 of the 1995 Act, he may detain the vehicle and its contents”.
We have set out the definition of ‘authorised person’ in paragraph 47 above. It is accepted, in this case, that TE Matthews and SVE Rustage were authorised persons for the purpose of impounding vehicles. ‘Vehicle’ is defined as having the same meaning as ‘goods vehicle’ in s.58(1) of the 1995 Act, but excluding a ‘small goods vehicle’. The relevant parts of s.58(1) of the 1995 Act provide that: “goods vehicle means a motor vehicle constructed or adapted for use for the carriage of goods, or a trailer so constructed or adapted …”
83. Regulation 4 of the 2001 Regulations was amended by the Goods Vehicles (Enforcement of Powers) (Amendment Regulations) 2009, (“the 2009 Regulations”). The amended regulation requires a detained vehicle to be returned to the owner, without the need for an application under regulation 10, (set out at paragraph 86 below), if the authorised person “is satisfied that one or more of the grounds set out in paragraph (3) is or are made out”. Paragraph (3) of regulation 4, as amended, then sets out the four grounds on which a claim for the return of a detained vehicle can be made under regulation 10. We set out the four grounds when quoting regulation 10. The provisions of this regulation were not used in relation to the Daf or the Mercedes, but it seems likely that they were used to return the vehicle detained on 13th April 2011, (see paragraph 46).
84. Regulation 5 of the Regulations entitles an authorised person, who has detained a vehicle, to fix an immobilisation device to it, either at the place where it was detained or after moving it to a more convenient place. The regulation also requires the authorised person to fix an ‘immobilisation notice’ to the vehicle. Regulation 6 of the Regulations makes it an offence to remove or interfere with an immobilisation notice or device. Regulation 8 sets out detailed provisions in relation to the removal of property which has been detained and its delivery into the custody of a person specified in the written direction which is required. These provisions, (regulation 8.6) specifically permit the authorised person to give a written direction that the driver may deliver the load before then delivering the vehicle into the custody of a person specified in the direction.
85. Regulation 9 of the Regulations requires the authorised person to publish a notice in the London Gazette, if the vehicle was detained in England or Wales. The regulation goes on to set out the details required in the notice and to require that copies of the notice must be served on, amongst others, the owner of the vehicle and the Traffic Commissioner in whose area the property was detained. As we have indicated we have not found any express provision setting a time limit for the publication of the notice in the London Gazette but our view is that it must be done swiftly.
86. Regulation 10 of the Regulations provides for applications to a Traffic Commissioner for the return of a vehicle detained under the power set out in paragraph 3. The terms of Regulation 10 are important so we quote them in full:
“10(1) The owner of a vehicle detained in accordance with regulation 3 may, within the period specified in regulation 9(2), apply to the traffic commissioner for the area in which the vehicle was detained for the return of the vehicle.
(2) An application under paragraph (1) shall be in writing and shall be accompanied by –
(a) a statement of one or more of the grounds specified in paragraph (4) on which the application is declared to be based; and
(b) a statement indicating whether the applicant wishes the traffic commissioner to hold a hearing.
(3) An application under paragraph (1) shall be served before the expiry of the period specified in regulation 9(2).
(4) An application under paragraph (1) may be made on any of the following grounds –
(a) that at the time the vehicle was detained the person using the vehicle held a valid licence (whether or not authorising the use of the vehicle);
(b) that at the time the vehicle was detained the vehicle was not being, and had not been used in contravention of section 2 of the 1995 Act;
(c) that, although at the time the vehicle was detained it was being, or had been used in contravention of section 2 of the 1995 Act, the owner did not know that it was being or had been, so used;
(d) that, although knowing at the time the vehicle was detained that it was being or had been, used in contravention of section 2 of the 1995 Act, the owner –
(i) had taken steps with a view to preventing that use; and
(ii) has taken steps with a view to preventing any further such use”.
87. The period of notice specified in regulation 9(2) is a minimum of 21 days from the date specified in the notice published in the London Gazette, or 21 days from the date on which notice is served on the owner, if that date is later. Regulations 11, 12 and 13 make detailed provision for hearings, the notification of determinations and the right of appeal to the Upper Tribunal.
88. Regulation 14 makes provision for the return of a detained vehicle if the application to the traffic commissioner or an appeal to the Upper Tribunal is successful. Regulations 15 to 18 deal with the disposal of detained vehicles, the return or disposal of the contents of a detained vehicle and the application of the proceeds of sale. In particular regulation 15 gives the authorised person power to sell or destroy the vehicle as they see fit. Regulation 18 provides that insofar as the proceeds of sale are not applied towards meeting the expenses incurred by the authorised person in exercising his functions under the 2001 Regulations, as amended, they are to be applied to meeting any claim made by the owner of the property at the time that it was disposed of. Regulation 19 then makes provision for the resolution of disputes.
89. The remaining provisions deal with offences and the giving of notice.
90. Three points need to be stressed at this stage. First, it is for VOSA to show that they had reason to believe that the detained vehicle was being or had been used, on a road, in contravention of s.2 of the 1995 Act. The standard of proof required is the balance of probability. In the case of the two vehicles with which this appeal in concerned there was no challenge to VOSA’s right to detain them. Second, once VOSA have established they had the right to detain a vehicle it is for the owner to prove ownership of the vehicle or vehicles to which the claim relates. Again the standard of proof required is the balance of probability. In the present case it was accepted that the two detained vehicles were owned by NT, so there was no need for the Traffic Commissioner to resolve this issue. Third, it is for the owner to show, on the balance of probability, that one of the grounds set out in regulation 10(4) of the 2001 Regulations, as amended, has been established.
The CLAIM TO LAWFUL USE.
91. The Daf was impounded on 17 May 2011. Notice of the seizure was published in the London Gazette on 20 May 2011. On 10 June 2011 the Solicitors acting for NT submitted an application for the return of the Daf. The formal notice of the application indicated that NT relied on two out of the four grounds on which a vehicle can be returned. These were (i) that it was not being, and had not been used, in contravention of section 2 of the 1995 Act and (ii) that NT did not know that it was being, or had been, used in contravention of section 2 of the 1995 Act. A detailed ‘Statement of Grounds’ was attached to the application. In simple terms it was argued; (i) that there was no contravention of s.2 of the 1995 Act because the Daf was engaged in ‘combined transport’ and therefore came within an exemption to s.2; (ii) that if it was not engaged in combined transport then NT believed that it was and therefore did not know that it was being used or had been used in contravention of s.2 of the 1995 Act and (iii) that seizure was disproportionate and that the traffic commissioner ought to have and ought to exercise discretion to return it. The statement of grounds went on to set out the arguments about the law which NT intended to advance in support of the claim.
92. In the case of the Daf the Traffic Commissioner found that it was not engaged in combined transport for two reasons. The first was that it was not involved in an international journey, the second was that in order to reach its destination it was obliged to go outside ‘a radius not exceeding 150 km, as the crow flies, from the seaport of unloading. Mr Nesbitt did not challenge either of these reasons. In our view any attempt to do so would have been hopeless. The Daf was transporting a load, which originated at Kingspan Environmental Ltd. in Portadown, Northern Ireland which was to be delivered to Titan Distribution in Tiverton Devon. From Portadown the load was taken through the Republic of Ireland and across the Irish Sea from Rosslare to Pembroke Dock. The first reason why the claim to be engaged in combined transport must fail is that combined transport involves the transport of goods between two Member States. The position here is that the goods were transferred from one part of the UK to another part so that the exemption in relation to combined transport cannot apply. The second reason is that to reach Tiverton from Pembroke Dock it was inevitable that the Daf would be driven outside a radius of 150 km, as the crow flies, from Pembroke Dock. We have already explained, in paragraph 63, that it is quite clear that the whole of the journey between the seaport of unloading and the point of delivery must take place with the radius of 150 km, as the crow flies. The paperwork, which the driver supplied to Mr Matthews, showed that this was not an isolated occurrence. There were 27 other occasions on which the vehicle would have had to leave the 150 km radius in order to reach a loading or unloading address. There were 16 occasions on which the delivery address was outside the 150 km radius. On 5 occasions the loading or unloading address was in Northern Ireland, so that those journeys were wholly outside the scope of combined transport. In a number of respects the paperwork did not meet that required to establish that the vehicle was engaged in combined transport.
93. The Traffic Commissioner went on to refer to the fact that it is VOSA’s practice, when it is shown that a vehicle cannot, lawfully, be engaged in combined transport, to go on to consider whether it is lawfully engaged in a cabotage operation. We commend this approach because it should help to ensure that enforcement action is only taken where there has been a clear breach of s.2 of the 1995 Act. The Traffic Commissioner concluded that the Daf could not have been engaged in cabotage operations on 17 May 2011 for the simple reason that it was well outside the 7 day period within which cabotage is permitted after unloading goods after international carriage. The vehicle had last unloaded after such a journey on 3 March 2011. Even if that had not been the case the paperwork was inadequate to satisfy the requirements of Article 8.3.
94. For these reasons it follows, in our judgment, that the claim based on the contention that the Daf was not being and had not been used in contravention of s.2 of the 1995 was rightly rejected.
95. The Mercedes was seized on 20 May 2011. Notice of the seizure was published in the London Gazette on 25 May 2011. On 15 June 2011 the Solicitors acting for NT submitted an application for the return of the Mercedes. The formal notice of the application set out the same two grounds, which we can summarize as (i) being used lawfully and (ii) no knowledge of unlawful use. Again a detailed statement of grounds was provided. The basis of the claim for the return of the Mercedes was first, that it was engaged on a journey which should, properly, fall to be classified as international carriage, following journeys which properly constituted cabotage operations, second, that if that was wrong NT did not know that it was being used in contravention of s.2 of the 1995 Act, and third that the seizure of the vehicle was disproportionate with the result that it should be returned in the exercise of a discretion identical to the discretion described in paragraph 91. Again the statement of grounds went on to set out the detailed arguments which NT intended to advance.
96. The Traffic Commissioner concluded that the clear evidence required by Article 8.3 should have been with the driver and that the material produced by the driver at the roadside was insufficient to satisfy the requirements of that Article. He made no precise finding as to the number of journeys which the vehicle had made after unloading the goods from the incoming international carriage, perhaps because he accepted the evidence of SVE Rustage that it was impossible to tell from the paperwork produced by the driver.
97. We have already explained why we have come to the conclusion that the Traffic Commissioner was correct in deciding that the clear evidence required by Article 8.3 should have been produced by the driver. As we understand the position it was not contended by NT that the material which the driver was able to produce was sufficient to satisfy the requirements of Article 8.3.
98. In opening the application before the Traffic Commissioner Mr Nesbitt correctly appreciated that even if he succeeded in persuading the Traffic Commissioner that the clear evidence could be produced by the haulier at a later stage that alone would not suffice to establish that there had been no contravention of s.2 of the 1995 Act. He said that assuming that he was right: “there is then a question whether the paperwork that my client has been able to provide in relation to those journeys complies with what the legislation requires in its entirety”. Earlier he had advanced the argument that if there were slight or even substantial shortcomings in the paperwork produced by NT it would still be open to the Traffic Commissioner to conclude that the journeys amounted to cabotage, we will return to this argument later.
99. The paperwork which NT produced became volume 4 of the full bundle of documents at the Impounding Hearing. It was served so late that Mr Hallsworth had already left his office to attend the Impounding Hearing by the time it arrived. He became aware of it on the first day of the Impounding Hearing and, obviously he and TE Matthews had no proper opportunity to consider it. The Traffic Commissioner had to ask if he was going to be given a copy part way through the second day of the Impounding Hearing, though it may be that he had actually received a copy a day or so earlier. The bundle was provided with an index and the next page is said to be a history of the relevant journeys, though the type is so small that it is not easy to read. Even though the burden of proof is on NT no further attempt was made to demonstrate how this bundle satisfied the requirements of Article 8.3.
100. The consequences of serving this important information so late in the day were all too predictable. At the end of Mr Nesbitt’s cross examination of Mr Matthews these exchanges took place:-
“Q. And part of the process has been that NT have supplied to Traffic Commissioner and VOSA all the relevant documentation that they had relating to the journeys you looked at. The documentation as you’d expect from your encounters at the roadside with drivers goes significantly beyond the documentation that was immediately available to you?
A. I’ve had some sight of it but not in detail.
Q. There is no point asking you anything about that though, is there?
A. No, but if it was a case of two or three days (after) we’d taken the vehicle it might have some relevance but –
Q. All right, I will perhaps leave it.
A. I have noted it in depth and the bundle I saw wasn’t numbered.
Q. I won’t ask you. I’ll just make it a matter of submissions later”.
101. We wish to make it plain that what happened in relation to this bundle of documents is not acceptable. A bundle of documents of this nature must, in future, be served sufficiently far in advance of a Public Inquiry or Impounding Hearing to enable them to be considered and assessed. One advantage of such a procedure is that issues are narrowed or resolved so that time is saved. Another is that where issues remain to be resolved that can be done on the basis of evidence. In addition not only must there be a proper index there must also be a schedule or document of some kind which identifies which document is said to satisfy which requirement of Article 8.3.
102. We asked Mr Nesbitt why the documents were not put to TE Matthews and what use the Traffic Commissioner was supposed to make of them. He replied to the effect that he thought that the Traffic Commissioner would make his own assessment in the process of drafting his decision. In our view that is a burden that ought not to have been placed on the Traffic Commissioner, indeed it exposed him to the risk of criticism in that it might have been said that there was no evidence to support the view that he had taken of the documents and that he should have preferred a different interpretation. While we can understand Mr Nesbitt’s reluctance to cross examine about documents that the witness had not properly considered it was, nevertheless, his duty to put them so that any assessment made by the Traffic Commissioner could be founded on evidence. It may be that it would have become apparent that TE Matthews needed some time, in which case his evidence could have been taken later in the Impounding Hearing. We wish to make it clear that in future, in this kind of situation, documents of this nature, which may contradict what a witness is saying must be put to the witness.
103. Given the need to determine, if Mr Nesbitt was right about the timing of production, whether the requirements of Article 8.3 had been met, albeit at a late stage, we invited Mr Nesbitt to prepare a schedule indicating which requirements of Article 8.3 were met and by which documents. Both Mr Hallsworth and Mr Nesbitt provided further submissions in relation to this schedule. Mr Hallsworth identified significant areas in which the documentation was deficient. He provided ‘chapter and verse’ to support those submissions in his Reply dated 11 April 2012. Mr Nesbitt made no attempt, at the adjourned hearing, to deal with the points made by Mr Hallsworth. He simply submitted that the documents fell short in about five separate areas. It only emerged at the very end of his submissions that he disputed Mr Hallsworth’s analysis. By that stage, on the final day of the hearing, it was necessary to move on to the other appeals in the list. Mr Nesbitt and Mr Hallsworth were invited to discuss the matter and to let us know if it was agreed that any of Mr Hallsworth’s points were wrong. Since we have heard nothing we must assume that it is asserted that they are correct.
104. There are two reasons for assessing the adequacy of these documents. First, if our decision as to the timing of production of the clear evidence should prove to be wrong then an assessment of these documents might assist on the question of whether or not the Mercedes was being or had been used in contravention of s.2 of the 1995 Act. Second, the state of these documents may assist on the issue of lack of knowledge. Given the absence of any proper assessment of these documents we have had to consider which of our powers to exercise. Paragraphs 17(1) & (2) of Schedule 4 to the Transport Act 1985, as amended, [“The 1985 Act”], provides that:
“(1) The …. Upper Tribunal are to have full jurisdiction to hear and determine all matters (whether of law or of fact) for the purpose of the exercise of their functions under an enactment relating to transport.
(2) On an appeal from any determination of a traffic commissioner other than an excluded determination, the Upper Tribunal is to have power-
(a) to make such order as it thinks fit; or
(b) to remit the matter to the traffic commissioner for rehearing and determination by the commissioner in any case where the tribunal considers it appropriate”.
105. The evidence on this issue consists of the documents set out in Volume 4 of the papers before the Traffic Commissioner. Our task is to assess whether those documents provide the ‘clear evidence required by Article 8.3. One of the advantages of having specialist members of the Tribunal with experience of the Transport Industry is that documents like those produced by NT can be assessed by someone who has ‘hands-on’ experience of the kind of documents involved and who knows what hauliers can be expected to produce. Given the age and also the importance of this case we have come to the conclusion that we can, properly, make our own assessment of the adequacy, or otherwise, of these documents, provided that we do so in general terms.
There are 4 types of document in the bundle: (i) NT Invoices, (ii) NT Consignment Notes, (iii) Various types of customer paperwork and (iv) CMR notes.
(i) NT Invoices [pages 819, 824, 828, 831, 837, 843 in the full bundle]
These are all in an identical pro forma and appear to be computer generated at NT HQ in Ireland. All but one of the invoices is dated after the date of actual delivery [and the impounding], the invoice for the original incoming international journey is dated prior to delivery.
Clearly none of the documents would have been available at a roadside check and only one could have been faxed by return to support the vehicle’s early release as NT contends should have happened. Reference to invoices was made in 42% of the footnotes to the schedule explaining where the information was to be found.
In our judgment, even if Mr Nesbitt had persuaded us that the clear evidence required by Article 8.3 could be produced at a later date all but one of these documents would have been produced too late to assist NT.
(ii) NT Consignment Notes [pages 820, 821, 823, 827, 829, 830, 832, 836, 840, 842, 844, 846 in the full bundle.
These are all clearly headed as consignment notes. They are individually numbered and carry a variety of operational information, however, it is not clear from the design of the form, [even to an experienced operator], how and when these notes are to be completed, used and administered by any individual driver or the organisation as a whole. No explanatory notes were provided nor is there evidence of drivers being trained in their use.
Although clearly headed Consignment Notes these documents are referred to in the schedule as Delivery Notes, Collection Notes, C & D notes but only on one occasion as a Consignment Note.
It is not known if they are printed in duplicate or triplicate and if so what happens to the various copies.
The Consignment Notes appear to be adapted [mainly by drivers] by making handwritten alterations or notes to fit a range of uses and to record what they are doing. Invariably they are not fully completed and are often unsigned and undated, legibility is also a major problem, in particular in reviewing photo copies.
They thus have limited value on their own in establishing what any vehicle has been doing as they are not completed or used consistently and accurately.
Reference to Consignment Notes [albeit under different guises] was made in 54% of the footnotes to the schedule explaining where the information was to be found.
In our judgment, even if Mr Nesbitt had persuaded us that the clear evidence required by Article 8.3 could be produced at a later date these documents would only assist NT where they were fully completed and enabled an enforcement officer to be satisfied that they provided the information required by Article 8.3.
(iii) Customer Paperwork [pages 822, 825, 826, 833, 834, 835, 838, 839, 841, 845, 851in the full bundle]
All the journeys are supported by some form of customer paperwork, except for the 2nd Groupage load. These documents are variously termed Delivery Notes, Packing Lists, and Dispatch Notes. Each gives the information set out in the schedule where one of these documents is referred to in the schedule, except for document 841 in the bundle which states clearly that the goods were collected from an address in the Czech Republic rather than the address in Ireland quoted by reference to an NT invoice [page 837 of the full bundle].
Reference to customer paperwork was made in 52% of the footnotes to the schedule explaining where the information was to be found.
It would appear that most of these documents provide part of the clear evidence required by Article 8.3.
(iv) CMR Notes [pages 850, 855, 856, 857, in the full bundle]
These appeared to be properly documented and supply all the required information.
Mr Nesbitt submitted that even though there were some gaps in the information provided from the documents which NT produced there was, nevertheless ‘substantial compliance’ with the requirements of Article 8.3. As a result he invited us to be satisfied, albeit late in the day, that the Mercedes had been engaged in cabotage operations falling within the exemption. In support of this submission Mr Nesbitt referred to Bennion on Statutory Interpretation, Code 10, dealing with mandatory and directory requirements and to the case of Petch v Gurney  3 All ER 731. That was a case in which the time limit for stating a case was couched in mandatory terms, which the Appellant had failed to meet. Given the potential injustice of deciding the case on the basis of the time limit, rather than on the merits, the Court of Appeal held that notwithstanding the mandatory language of the time limit it was to be regarded as directory, leaving the Court with a measure of discretion.
106. Mr Nardell QC submitted that concepts of ‘directory’ and ‘mandatory’ requirements are unhelpful when construing EU legislation and that when an EU regulation or directive imposes conditions for the exercise of a Community right, the conditions must be strictly fulfilled so as to give effect to the object and purpose of the provisions. He relied on the decision of the House of Lords in Berkley v Secretary of State for the Environment and another  2 AC 603. In that case an EU directive, (transposed into English law), required the Secretary of State to take into account an Environmental Impact Assessment before granting planning permission. The Secretary of State took the view that the necessary information was available in a collection of different documents so that a formal assessment was unnecessary. The House of Lords held that it was not open to the court to dispense, retrospectively, with the requirement for an assessment on the ground that the outcome would have been the same; since to do so would be inconsistent with the court’s obligations under European law to enforce community rights. The House went on to hold that making available a disparate collection of documents could not, in any event, amount to substantial compliance.
107. We prefer and follow the decision in Berkley. There are two reasons. First it deals with EU law whereas Petch v Gurney does not. Second it is closer on the facts to the present case, where NT produced a disparate selection of documents late in the day. In our view there is no room for ‘substantial compliance’ when considering the question of whether the owner has proved, on the balance of probability, that the vehicle was not being used in contravention of s.2.
108. There is another reason for taking this view, namely that the late delivery of these documents prevented Mr Nesbitt from raising the issue at the right moment. We have already referred, (in paragraph 90 above), to the fact that it is for VOSA to prove that they had reason to believe that the detained vehicle was being or had been used, on a road, in contravention of s.2 of the 1995 Act. In his evidence SVE Rustage was saying, in effect, that VOSA would not impound a vehicle, on the ground that one or more of the requirements of Article 8.3 had not been met, if, (we stress the qualification), the documentation as a whole showed that the vehicle was performing cabotage operations within the limits of 3 journeys within 7 days of unloading the international carriage. In our view that is a sensible and appropriate approach. If the documents, as a whole, present the picture that the vehicle is operating within the cabotage, or any other, exemption then VOSA would not ‘have reason to believe that the vehicle was being or had been used, on a road, in contravention of s.2 of the 1995 Act’. In that situation even if there was some failure to provide all the information set out in Article 8.3 it seems to us that the failure could not justify impounding the vehicle. In other words there is a way in which ‘substantial compliance’, for want of a better expression, can be raised. Furthermore it assists owners to raise it in this way, because the burden of proof on this issue falls on VOSA. Of course it will be necessary to put all the relevant documents to the witnesses who can deal with them so that, in due course, the Traffic Commissioner can give a reasoned decision on the point. Hauliers would be well advised to bear in mind that this does not mean that a lax approach to the requirements of Article 8.3 is being encouraged or will be tolerated. It does mean that the occasional omission, which does not prevent a picture of lawful operation from emerging, is unlikely to result in a vehicle being impounded.
109. For all these reasons we are satisfied that the Traffic Commissioner was correct in concluding that NT had failed to make out their claim that the Mercedes was not being and had not been used, on a road, in contravention of s.2 of the 1995 Act.
NO KNOWLEDGE OF UNLAWFUL USE – THE LAW.
110. A claim for the return of a vehicle under regulation 10(4)(c) of the 2001 Regulations, as amended, requires the owner to prove: “that, although at the time the vehicle was detained it was being, or had been used in contravention of section 2 of the 1995 Act, the owner did not know that it was being or had been, so used”. The underlining is ours to stress that the owner has the difficult task of proving a negative. Judging by previous appeals on this point Traffic Commissioners also find it difficult to explain why an owner has failed to prove that they did not know. For these, or other reasons, the approach most commonly adopted when this issue arises is to consider whether the evidence demonstrates that the owner must have known of the use in contravention of s.2 of the 1995 Act, because, of course, in that situation the claim must fail. This seems to be a sensible and practical approach, provided it does not lead to confusion over the burden of proof or to the suggestion that it means that someone has to prove that the owner did in fact know of the use in contravention of s.2.
111. In our view the starting point for any discussion of the law on this issue must be the Transport Tribunal’s decision in Appeal 2003/3 Close Asset Finance Ltd v Secretary of State for Transport. That was an appeal, which was fully argued, on both sides, because the Secretary of State was represented. It follows that it is a decision of greater authority than one in which the Appellant alone is represented. We quote paragraphs 7-9 of the decision in full:
“7. The question was what was meant by the word ‘know’ in reg.10(4)(c) of the Regulations. It could not be limited to actual knowledge because Parliament could not have intended that an owner could be permitted to shut his eyes to the obvious. We were invited to consider Commission for the New Towns v. Cooper (GB) Ltd 1995 2All ER 929 at 946 where Stuart-Smith LJ said:
“Did CoopInd have actual knowledge of the mistake? The judge held not; they merely suspected it. Mr Wood submits that the judge was in error and he should have found actual knowledge. His attention was drawn to the analysis of various forms of knowledge made by Peter Gibson J in Baden v. Societe Generale pour Favoriser le Developpement du Commerce et de l’Industrie en France SA (1982)  4All ER 161,  1WLR 509 and cited by Millett J in Agip (Africa) Ltd v. Jackson  4All ER 385 at 405,  Ch 265 at 293:
“Knowledge may be proved affirmatively or inferred from circumstances. The various mental states which may be involved were analysed by Peter Gibson J in Baden’s case  4All ER 161 at 235 as comprising: “(i) actual knowledge; (ii) wilfully shutting one’s eyes to the obvious; (iii) wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make; (iv) knowledge of circumstances which would indicate the facts to an honest and reasonable man; (v) knowledge of circumstances which would put an honest and reasonable man on inquiry.” According to Peter Gibson J, a person in category (ii) or (iii) will be taken to have actual knowledge, while a person in categories (iv) or (v) has constructive notice only. I gratefully adopt the classification but would warn against over refinement or a too ready assumption that categories (iv) or (v) are necessarily cases of constructive notice only. The true distinction is between honesty and dishonesty. It is essentially a jury question. If a man does not draw the obvious inferences or make the obvious inquiries, the question is: why not? If it is because, however foolishly, he did not suspect wrongdoing or, having suspected it, had his suspicions allayed, however unreasonably, that is one thing. But if he did suspect wrongdoing yet failed to make inquiries because “he did not want to know” (category (ii)) or because he regarded it as “none of his business” (category (iii)), that is quite another. Such conduct is dishonest, and those who are guilty of it cannot complain if, for the purpose of civil liability, they are treated as if they had actual knowledge.”
After referring to this passage, the judge continued:
“I do not think that case assists him. Whatever view the courts may take in relation to other remedies, the Court of Appeal has emphasised in recent years that in cases of unilateral mistake nothing less than actual knowledge will do; in that context someone with less than actual knowledge will not in my judgment be taken to have actual knowledge (see Agip SpA v. Navigazione Alta Italia Spa, The Nai Genova  1 Lloyd’s Rep 353 and Morsil Properties Ltd v. Allied-Lyons plc  CA Transcript 1132).”
The judge appears therefore to be holding that only Peter Gibson J’s category (i) is sufficient. But with all respect to him, this is not so; categories (ii) and (iii) also constitute actual knowledge in law.”
8. We were also referred to White v. White (2001 2All ER 43, HL at 48) where Lord Nicholls stated:-
“There is one category of case which is so close to actual knowledge that the law generally treats a person as having knowledge. It is the type of case where, as applied to the present context, a passenger had information from which he drew the conclusion that the driver might well not be insured but deliberately refrained from asking questions lest his suspicions should be confirmed. He wanted not to know (‘I will not ask, because I would rather not know’). The law generally treats this state of mind as having the like consequences as would follow if the person, in my example the passenger, had acted honestly rather than disingenuously. He is treated as though he had received the information which he deliberately sought to avoid. In the context of the directive that makes good sense. Such a passenger as much colludes in the use of an uninsured vehicle as a passenger who actually knows that the vehicle is uninsured. The principle of equal treatment requires that these two persons shall be treated alike. The directive is to be construed accordingly.
“Thus far I see no difficulty. I consider that it is acte clair that these two categories of case fall within the scope of the exception permitted by the directive. Conversely, I am in no doubt that ‘knew’ in the directive does not include what can be described broadly as carelessness or ‘negligence’. Typically this would cover the case where a passenger gave no thought to the question of insurance, even though an ordinary prudent passenger, in his position and with his knowledge, would have made inquiries. He ‘ought’ to have made inquiries, judged by the standard of the ordinary prudent passenger. A passenger who was careless in this way cannot be treated as though he knew of the absence of insurance. As Lord Denning MR said in Cia Maritima San Basilio SA v. Oceanus Mutual Underwriting Association (Bermuda) Ltd, The Eurysthene [1976 3All ER 243 at 251,  QB 49 at 68, negligence in not knowing the truth is not equivalent to knowledge of it. A passenger who was careless in not knowing did not collude in the use of an uninsured vehicle, and he is not to be treated as though he did. To decide otherwise would be to give a wide, rather than a narrow, interpretation to the exception permitted by the directive. This also seems to me to be acte clair.”
9. In considering the meaning of the word “know” Mr McCreadie accepted that in categories (ii) and (iii), as mentioned, the meaning of the word “wilful” should be taken from R v. Senior (1899 1QB 283): “‘Wilfully’ means that the act is done deliberately and intentionally, not by accident or inadvertence, but so that the mind of the person who does the act goes with it”. He accepted also on behalf of the Respondent that a distinction was properly to be made between honesty and dishonesty. He submitted that “mere failure to make all reasonable inquiries is not of itself sufficient to constitute knowledge, which is actual knowledge; negligence is not enough”. In considering the issue of knowledge traffic commissioners should pose questions of the sort suggested by Millett J. If an owner suspects wrongdoing and then puts his head in the sand, he shuts his eyes to the obvious; but “a high degree of fault” is required for the failure to be wilful so as to constitute actual knowledge”.
112. Although Close Asset has been followed and applied by the Transport Tribunal in a number of decisions it is unnecessary to refer to them, they can, if necessary be found in the latest edition of the Digest of Decisions on Appeal from Traffic Commissioners, which can be seen at:- http://www.justice.gov.uk/downloads/tribunals/transport/decisions-and-digest/UT_TrafficCommissionerDigest_ChronologicalOrderofCases_rvsdJun2011.pdf).
113. The next case to which we must refer is 2011/21 Lombard North Central PLC. The factual background to that appeal and the reasoning of the Deputy Traffic Commissioner are so briefly set out in the Upper Tribunal’s decision that it is difficult to assess the significance of a passage from the decision, which appears in paragraph 8(i):
“In particular, we hold that Close Asset Finance Limited establishes that a person can only be treated as having actual knowledge by reason of a failure to make enquiries if his conduct was dishonest and, further, that in determining whether a person acted dishonestly the reason for his failure to make enquiries has to be considered”.
114. Very shortly after the decision in Lombard was published concerns about the passage we have quoted were expressed by a different constitution of the Upper Tribunal in 2011/25 Asset 2 Asset Ltd. In particular at paragraph 21(d) the Tribunal held, insofar as it is suggested in Lombard that a separate finding of dishonesty is required to prove imputed actual knowledge, in categories (ii) and (iii) of the analysis by Peter Gibson J quoted above, that the decision in Lombard is wrong. The Tribunal went on to reassess the position in the following terms:
“24. The various states of knowledge that may be involved were analysed by Millett J in Agip (Africa) Ltd v Jackson  4All ER 385 at 405, following the graduated scale suggested in the judgment of Peter Gibson J in: Baden v Société Générale pour Favoriser le Dévelopement du Commerce et de l' Industrie en France SA  4 All ER 161:
(i) Actual knowledge;
(ii) Knowledge that the person would have acquired if he had not wilfully shut his eyes to the obvious;
(iii) Knowledge that the person would have acquired if he had not wilfully and recklessly failed to make such inquiries as an honest and reasonable person would make;
(iv) Knowledge of circumstances that would indicate the facts to an honest and reasonable person; and
(v) Knowledge of circumstances that would put an honest and reasonable person on inquiry.
25. Category (i) presents no difficulty. Categories (ii) and (iii) are essentially imputed actual knowledge, whereas categories (iv) and (v) are usually regarded as constructive knowledge and, without more, may not establish anything other than negligence.
26. More recently, in BCCI Ltd v Akindele  4 All ER 221, Nourse LJ held that, in relation to cases of “knowing receipt”, all that is necessary to impute actual knowledge or find constructive knowledge is that the recipient's state of knowledge should be such as to make it unconscionable for him to retain the benefit of the receipt. A test in that form, he said, might help to overcome those difficulties of definition and allocation to which the previous categorisations have led. Moreover, it should better enable decision-makers to give common-sense decisions in the commercial context.
27. In our view, whichever way one looks at it, the motivation for the owner’s conduct, or failure to take certain steps, is likely to be extremely relevant. If the true situation is obvious, but a person or company says that, nevertheless, they did not appreciate it, the question is: why not? If they shut their eyes to the obvious, then actual knowledge can be imputed, unless some innocent explanation is established. If the true situation would have become apparent if such inquiries had been made as any honest and reasonable person would make, but a person says that, nevertheless, they did not make such inquiries, the question is: why not? In the absence of some innocent explanation, if they failed to do so wilfully (that is to say - deliberately, intentionally and with a high degree of fault) and recklessly (that is to say - with a lack of proper caution) then actual knowledge can be imputed. An example of such failure might be where a person or company deliberately decided that they did not want to know, or that it was not their problem, regardless of the consequences. It may, perhaps, depend on whether the failure was to make all reasonable enquiries (which is not a requirement), or whether it was a failure to make any reasonable enquiries.
28. In relation to categories (ii) and (iii) no separate finding of dishonesty is necessary because these categories inherently involve deliberate and intentional conduct or failure indicative of a lack of integrity. But, as the tribunal stated in Close Asset Finance, a high degree of fault is required for the failure (to make such inquiries as an honest and reasonable person would make) to be “wilful” so as to constitute actual knowledge.
29. Categories (iv) and (v) are different because the conduct which falls within these categories is not self-evidently done with a dishonest motive or lack of integrity. It follows that, in relation to categories (iv) and (v), particular care will be needed. Here, there will have to be a finding that the owner knew of some of the circumstances, with the result that an honest and reasonable person would then see the full picture or, at least, start to ask some pertinent questions. If they did not do so, the question is why not? Thus, in category (iv) - what was the motive or explanation for the failure to reach the conclusion that an honest and reasonable person would have reached; and in category (v) - what was the motive or explanation for the failure to make the sort of inquiries that an honest and reasonable person would make? In our view, in relation to these categories, there is a strong argument for specifically considering the question of honesty or integrity in relation to the owner’s motive or explanation. Lack of honesty or integrity is not inherently part of these categories although, on the facts found, lack of honesty or integrity may well, in fact, be apparent. It will be a matter for the Traffic Commissioner to consider, on the evidence.
30. In short, category (i) stands alone. Categories (ii) and (iii) do not require a specific finding of dishonesty because, unless there is some innocent explanation, the closing of one’s eyes to the obvious, or the wilful and reckless failure to make such inquiries as an honest and reasonable person would make, inherently involve a type of dishonesty or lack of integrity and we do not think that Parliament can have intended to give the benefit of such conduct or failure to the indifferent or deliberately ignorant individual or company and not to the business-like or cautious person. But a finding of a high degree of fault is required in relation to wilfulness. In relation to categories (iv) and (v), a Traffic Commissioner should specifically consider the question of honesty or integrity because lack of honesty or integrity is not implicit. Furthermore, it seems to us that, in this context, dishonesty or lack of integrity in relation to the owner’s motivation or explanation is consistent with the “unconscionable” analysis put forward by Nourse LJ”.
115. We need to make two general points about this passage. While the recasting of the categories in paragraph 24 of the Asset 2 Asset decision is in many ways helpful it does reveal one of the pitfalls in such an exercise. We have inserted the word ‘wilfully’ into category (ii) because it is quite clear from the quotation from Close Asset that it is an important ingredient of both category (ii) and category (iii) cases. The second point is that care should be taken when considering whether or not the conduct of the owner is ‘unconscionable’ not to allow this concept to oust the test required by Regulation 10(4)(c), namely lack of knowledge.
116. One reason for hearing this appeal with two judicial members was to resolve the difference of approach between Lombard, which appears to require a finding of dishonesty over and above the findings necessary to bring a case within categories (ii) or (iii) and Asset 2 Asset, in which it was held that a finding of dishonesty was implicit once the evidence shows that a case comes within either of these categories. Mr Nesbitt sought, and was granted, leave to amend the grounds of appeal to raise this point and also another, namely whether or not Asset 2 Asset is to be understood as saying that categories (iv) and (v) can establish knowledge provided that it is shown that the owner had a dishonest motive.
117. In the event the argument on this issue did not take long and we understood Mr Nesbitt to concede that no additional finding of dishonesty is necessary once, (we stress the importance of the qualification), the case has been shown to come into category (ii) or (iii). In addition we understood him to concede that it would be open to a Traffic Commissioner to conclude that the owner had failed to show lack of knowledge of use in contravention of s.2 of the 1995 Act where, in a case falling within category (iv) or (v), the owner has not merely been negligent but has a dishonest motive for not coming to the obvious conclusion.
118. In our judgment those concessions were correctly made. In cases which come within categories (ii) and (iii) the conduct which brings the case into one or other category is inherently dishonest, hence the fact that no additional finding of dishonesty is required. One can test the matter by asking this question: where a person has deliberately or intentionally shut their eyes to the obvious, (ie that the vehicle is being used in contravention of s.2) and they have done so with a high degree of fault, can they honestly claim the return of a vehicle on the ground that they did not know that it was being or had been used in contravention of s.2? In our view making such a claim, in those circumstances, is plainly dishonest, hence the fact that no further finding of dishonesty is required. In our judgment asking a similar question in relation to what needs to be proved to bring a case within category (iii) produces exactly the same result.
119. By contrast conduct which brings a case within categories (iv) and (v) amounts to negligence but it is not conduct which is inherently dishonest. On its own a finding that a case comes within either of these categories does not show that the person concerned knows what they would have discovered had they not been negligent. But if the evidence goes further and shows that not merely was the person negligent but that their motivation for not coming to the conclusion, which an honest and reasonable person would have reached, was a dishonest one, then it may be appropriate to conclude that a person in that position did know of the use in contravention of s. 2 of the 1995 Act.
120. It follows, in our view, that the decision in Lombard, should not be relied on to suggest that in cases coming within categories (ii) and (iii) a separate finding of dishonesty is required, beyond that which is inherent from the findings which put the case into either of these categories. Given the lack of detail in the decision it seems to us that Lombard is best viewed as a decision on its own particular facts which is of no value whatsoever in any future consideration of this topic.
121. We must mention one other point which arises from the quotation from the decision in Lombard. The passage we have quoted ends as follows: “and, further, that in determining whether a person acted dishonestly the reason for his failure to make enquiries has to be considered”. We accept, at once, that any reason for failing to act, or any other explanation put forward by the owner must be considered and assessed. We simply wish to make the point that, in our view, this is most appropriately done in the course of deciding whether or not a case comes within a particular category. Indeed it is difficult to see how it could be otherwise. A good reason for failing to make inquiries is likely to mean that the owner was not guilty of a high degree of fault. Circumstances which show that the owner’s conduct was inadvertent or accidental would mean that it was not wilful.
THE APPROACH TO DECISIONS ON LACK OF KNOWLEDGE.
122. Having reviewed the law in relation to this part of the case the Traffic Commissioner went on to consider the extensive material relevant to the issue of whether or not NT had shown that it did not know that one or other or both of the vehicles was being or had been used, on a road, in contravention of s.2 of the 1995 Act. The Traffic Commissioner concluded that when John Nolan considered this material he was selective in his interpretation. Those parts of a document which suited the way in which NT wished to work were accepted and relied on while those parts which did not suit NT’s purposes were simply ignored. He also referred to what he described as “knowledge management problems”, by which he meant that those responsible for the management of NT tended to focus on their own particular part of the company without making any effort to explain what they were doing to others and without being provided with any information about the way in which others were operating. The Traffic Commissioner ended his assessment of the material relating to the claim to lack knowledge by saying:
“Applying the test in Asset 2 Asset I conclude that this operator has been turning a blind eye, choosing to read regulations and correspondence in a selective manner. Knowledge management systems were poor but I do not accept that it was as put to me by NT. …. I find that the selective interpretation of correspondence and of regulations, reflects a key part of the culture of NT. The test as to finding a high degree of fault as set out in various case law culminating in Asset 2 Asset is met with ease”.
In other words the Traffic Commissioner came to a general conclusion on knowledge without giving separate consideration to each of the two vehicles.
123. Mr Nesbitt criticised the approach taken by the Traffic Commissioner in three ways. First, he submitted that the Traffic Commissioner should have considered each of the impounded vehicles separately and should have made separate findings in relation to each. Second, he submitted that in conducting that exercise the Traffic Commissioner should have kept the evidence in relation to each vehicle in its own self-contained compartment. Third, he submitted that the Traffic Commissioner was wrong to take into account in assessing the issue of lack of knowledge the evidence which he had heard when conducting a Public Inquiry concerning an application by a company linked to NT, who had applied to him for an operator’s licence.
124. We can deal with the first of these submissions quite briefly. In our view it was necessary for the Traffic Commissioner to consider the circumstances of each vehicle separately and to make separate findings in relation to each. The reason is that in the case of the Daf NT was seeking to show that there was no use in contravention of the 1995 Act because it was being operated under the combined transport exemption while in the case of the Mercedes they sought to show that there was no use in contravention of the 1995 Act because they were operating under the exemption for cabotage operations. In other words they had to establish lack of knowledge of two different exemptions. In any event it seems to us that where a claim based on lack of knowledge is being tested by VOSA asserting “but you must have known” it is important for the Traffic Commissioner to make findings in relation to whether or not the owner acted ‘wilfully’, whether or not there was a ‘high degree of fault’ and in relation to any other ingredient of the category into which the case appears to fall.
125. Mr Nesbitt’s second criticism was that the Traffic Commissioner should have kept the evidence in relation to each of the two vehicles in its own self-contained compartment. If Mr Nesbitt is seeking to suggest that there can be no circumstances in which evidence in relation to one impounded vehicle can ever be relevant to the position of another impounded vehicle then we are satisfied that he is wrong. While the strict rules of evidence do not apply before the Traffic Commissioner or the Tribunal the ‘relevance test’ for the admissibility of evidence remains important. If evidence in relation to one vehicle does not properly assist the tribunal of fact to come to a conclusion in relation to another vehicle then it is irrelevant and should only be taken into account in relation to the vehicle in respect of which it is relevant. On the other hand the present case provides an excellent example of evidence, which is capable of being relevant to more than one vehicle. One of the factors which the Traffic Commissioner ought to have assessed, in relation to each of the vehicles, was the question of whether John Nolan’s selective reading of various documents was, on the one hand ‘intentional or deliberate’ or on the other hand ‘accidental or inadvertent’. Some of the documents concerned combined transport, others concerned cabotage. It may be that some dealt with both. In our view it would be wholly artificial to try to put these documents into two self-contained compartments. It seems to us that the more often it appears that John Nolan accepted the parts of a document which supported the way in which NT wished to work and the more often it appears that he rejected or ignored the parts which conflicted with the way in which NT wished to work the more clearly it can been seen that his approach was deliberate or intentional rather than accidental or inadvertent. The more often the same approach is adopted the less likely it is to have been a co-incidence. In our view the correct approach is to assess the relevance of the evidence in question. If a particular piece of evidence is only relevant to one vehicle it must only be used in relation to that vehicle. If it is relevant to more than one vehicle it can be used in relation to each vehicle to which it has relevance.
126. Mr Nesbitt’s third criticism of the Traffic Commissioner’s approach was that he should not have taken into account, in reaching this decision, evidence which he had heard during an earlier Public Inquiry. In order to deal with this point we must add some additional background information. In 2010 a company called NRT Logistics Ltd, (“NRT”), applied to the Traffic Commissioner for an operator’s licence. NRT was closely linked to NT and the object of the exercise was to enable transport work to be done on behalf of NT, in GB, without the need to rely on exemptions to s.2 of the 1995 Act. The application was considered at a Public Inquiry held on 7 December 2010. In a written decision dated 6 January 2011 the Traffic Commissioner refused the application. It is apparent from the decision that one of the factors which led to the application for an operator’s licence was the number of graduated fixed penalties, (“GFP’s”), issued to the drivers of NT vehicles for breach of the cabotage rules. It was conceded that NT paid each of these penalties, on behalf of the driver. In addition it was accepted that even though NT disagreed with VOSA’s interpretation of the rules, as at the date of the Public Inquiry, none of the GFP’s had been challenged in a court. However VOSA did accept that in many instances journeys might have met the rules for combined transport if the paperwork trail required by the legislation had been met. At paragraph 10 of the decision the Traffic Commissioner said this:-
“A significant part of the public inquiry was taken up with questions and answers on GFP’s for breach of the cabotage regulations. In the period from May 2010 to late September 2010 there were 19 cabotage GFP issued. It was put to me that governments vary in their interpretation and enforcement of the EEC Regulations including Regulation (EC) No 1072/2009 of the European Parliament and of the Council of 21 October 2009 on cabotage; and, Council Directive 92/106/EEC of 7 December 1992 on combined transport operations. It was conceded that as a GB traffic commissioner, I would apply the law as set out in GB legislation. It was also agreed that the GB definitions were in accord with the EEC rules”.
He went on to say that John Nolan had stated that the Eire government had a different interpretation of the regulations and that John Nolan had sent a press cutting in which an EU Commissioner suggested the abolition of the cabotage restrictions. The Traffic Commissioner made it clear that this was not something which could influence his decision. Later, at paragraph 45 he said this:-
“If Nolan Transport suggests that it is not in breach of cabotage rules then it should not pay its drivers GFP as it does now, but should challenge them in the courts. As a regulator I am entitled to assume that if a GFP is accepted by the driver and paid by the operator, that the offence set out in the GFP has indeed occurred”.
127. Other aspects of this Public Inquiry dealt with maintenance and overloading, including the high rate of prohibitions attracted by NT vehicles for defects and overloading. The application was refused on a number of grounds, including a failure on the part of NRT to show that they were of good repute. One of the factors which contributed to this finding, (though by no means the only one), was the attitude towards the cabotage rules. Michael Malloy, the Financial Accountant of NTR, but someone with knowledge of the way in which NT worked, said in evidence that NT’s turnover had dropped by 25% in 2009, with the result that the survival of the business was the priority so that compliance with the cabotage rules was “not high on the list”.
128. On 1 July 2011 the Traffic Commissioner held a preliminary hearing in advance of the Impounding Hearing which gives rise to this appeal. In the course of the preliminary hearing he specifically referred to the fact that he had conducted the Public Inquiry into the application by NRT and he invited the parties to consider whether either or both wished to submit that he should recuse himself. Both NT and VOSA were content for him to conduct the Impounding Hearing. It is apparent from the exchanges which appear in the transcript of the Impounding Hearing that copies of the transcript of the NRT Public Inquiry and the decision on that application were requested in the course of the preliminary hearing. Mr Nesbitt expressed a degree of caution, because he did not know what reliance Mr Hallsworth would place on the transcript. Nevertheless he went on to make it clear that he would be relying on passages from the transcript where he felt that they assisted NT. In the event we have counted 22 occasions on which reference was made to the NRT transcript either by Mr Nesbitt or by Mr Hallsworth.
129. In his written decision the Traffic Commissioner referred to the matters which we have set out in paragraphs 127 and 128 above. He went on to say that he was also referring to a number of other paragraphs, which he identified. Many of these paragraphs dealt with matters such as maintenance, maintenance related prohibitions and overloading. The point which the Traffic Commissioner was seeking to make was that in general terms it had been made clear at the earlier Public Inquiry that the standards and procedures being advanced in support of the NRT application, (which effectively meant those employed by NT) fell far below the threshold of acceptability for an operator’s licence in GB, with the result that by the time of the present application he would have expected all the relevant concerns, including the approach to the cabotage regulations to have been addressed.
130. Once again, in our view, the answer to this point depends on whether or not the material is relevant. In relation to the passages we have quoted from the NRT decision we are quite satisfied that they are relevant to the issue of knowledge which arises in relation to both the impounded vehicles. In relation to the other passages, to which the Traffic Commissioner referred, it seems to us that the connection is more tenuous but that the Traffic Commissioner was entitled to take into account the lax attitude to regulation generally which those concerned with NT and NRT appear to have adopted. In our view the matters to which the Traffic Commissioner referred in paragraph 102 of his decision added a little, but not very much, to the other material which had to be assessed.
131. It follows that Mr Nesbitt has succeeded on one of these three points but that he has failed in relation to the other two. We invited Mr Nesbitt to consider which of our powers we should exercise, in the event of success on all or any of these points. His initial reaction was that he would probably invite us to remit the matter for rehearing, with the benefit of our rulings on other issues but he asked for time to consider NT’s position. In the event he did not press us to remit the matter but equally he did not encourage us to reassess the evidence ourselves.
132. We have set out our powers in paragraph 104 above. They provide a choice between remitting the matter for rehearing, if we consider it ‘appropriate’ and hearing and determining the matter ourselves, which would include reassessing the evidence. We have the benefit of all the material that was before the Traffic Commissioner as well as a transcript of the Impounding Hearing which took place before him. We accept that he had the advantage of seeing and hearing the witnesses but it seems to us that this is not a case where that is a critical consideration. We question whether there would be any advantage in rehearing the matter, on this issue, with the benefit of our rulings on other points. The reason is that John Nolan and to a lesser extent other witnesses from NT would inevitably say: “we now know that our view about the meaning of cabotage and combined transport has not been accepted but we believed, at the time, that our view was correct and that we were therefore acting lawfully”. In other words it seems to us that the Traffic Commissioner would be in no better evidential position when assessing this point than we are. There are, in our view, compelling reasons why it is not appropriate to remit this appeal. For understandable reasons the matter is already stale. If it is remitted for rehearing there will be further delay. In addition there will be considerable additional expense. We can see no counter-balancing advantage which could justify such delay or expense. In our view the appropriate course is for us to reassess the evidence ourselves.
“NO KNOWLEDGE” – The FACTS.
133. The evidence on this issue comes from the documents put before the Traffic Commissioner at the Impounding Hearing and the oral evidence given to him, principally by John Nolan and Richard Nolan on behalf of NT.
134. The evidence was that each of the active Directors of NT had different areas of responsibility and/or expertise. John Nolan said that he was in charge of information technology and the computer systems used to plan journeys and that he would be the person responsible for assessing whether or not operations, which NT wished to carry out in Great Britain, came within any relevant exemption to the requirement to hold a GB operator’s licence. Richard Nolan said that his normal ‘hat’ was that of Strategic Director responsible for commercial items and the direction of the company.
135. In the period between April 2010 and June 2011 John Nolan raised numerous questions, with various different authorities, concerning the interpretation of the Regulations and Directives relating to cabotage, international carriage and combined transport. In many cases they took the form of examples of possible journeys. On occasions the answers to one set of questions or examples prompted a new set of questions or examples. John Nolan went on to explain that NT had an Irish desk, a UK desk and a European desk, with one of his brothers in charge of each. In the case of the UK desk it was his brother Noel who was in charge. He said that he passed on his understanding of the interpretation of the regulations to Noel but that Noel was not involved in the process of deciding how they were to be interpreted. Richard Nolan said that, before February 2011, he had very little to do with this area of NT’s business, which was left to John Nolan and his team. In cross-examination he said that he got involved in the “absolute detail of it once we had trucks impounded, to find out quite where are we at here? How did this occur”? He went on to say, in answer to the Traffic Commissioner that he did not believe that the new cabotage regulations affected NT because NT was involved in international transport. Asked if he had looked at any of the regulations at the time he replied: “No”, adding that he had done so since the impoundings.
136. John Nolan said that a time came when he was advised, for medical reasons, to cut down the amount of work he was doing. As a result he tended to work during the morning but not in the afternoon. This meant that he did not attend some of the meetings at which the interpretation of the regulations was discussed. Richard Nolan said that John was told to “back off completely” until he was fit and that in the meantime others would “grab hold of this and see what we’ve got”. In relation to the way in which he defined the limits of combined transport operations, (referred to for the reasons set out in paragraph 152 as the ‘postcode interpretation’), John Nolan said that it only became an issue after the trucks had been impounded. In answer to Mr Nesbitt he said that his brother Richard had come back from the second meeting, (in June 2010), wanting to know what he had done. And that he had said that he was working on a postcode system and that he shared the documents, (ie JN/1), relating to the system with him. John Nolan accepted that he had not explained to others how the computer programmes, which he had created, operated and said that he would not know the outcome of some of the meetings. In cross examination the following exchange took place:
“Q: ….. Would they then report back to you as the resident expert, then, as to what had happened at those meetings?
A: They were arguing or they were discussing issues that were coming up in the day to day workings of the business at the time. I was aware of some of them, I was not aware of others”.
A little later he was asked:
“Q: You became unwell when? February of last year March?
A: End of January, start of February, it would be when Richard (Nolan) would have got involved with Dyne’s, [NT’s Solicitors].
Q: Right. Did you tell him of this interpretation there? (Referring to the postcode interpretation relating to combined transport).
A: No, I didn’t, because I would have had my system working. It was working and he was aware of the system working but probably wasn’t aware of my interpretation of this, but was aware it was somehow postcode related”.
John Nolan went on to say that he had not given his brothers Richard or Noel any of the documents relating to the postcode interpretation in relation to combined transport.
137. On 14 November 2009, the European Parliament and the Council of the European Union adopted Regulation 1072/2009 on the common rules for access to the international road haulage market. The regulation applied from 4 December 2011 with the exceptions of Article 8 and 9, which applied from 14 May 2010. John Nolan accepted in cross-examination that he was concerned that Regulation 1072/2009 was being interpreted more strictly than his previous understanding of cabotage operations. The clearer and more restrictive definition of cabotage meant that attention was also given, by all concerned, to the definitions of international carriage and combined transport. In the case of international carriage this was because it is the delivery of the goods after an incoming international carriage, which triggers the right to perform cabotage operations. In the case of combined transport it offered an alternative exemption to cabotage in some circumstances.
138. In April 2010, the Irish Department for Transport issued a leaflet concerning the new regulation, which International Road haulage operators were invited to read carefully. The leaflet summarised the new rules on cabotage including the need for a loaded international journey by a foreign haulier in order to then engage in cabotage. The leaflet set out each item of information required for each operation to qualify as cabotage and stated:
“Operators will need to have appropriate documentation on board their vehicles as evidence of compliance with the new rules (the requirements of Article 8.3 were then set out), ... Drivers that engage in cabotage operations must be made aware of these new rules, and should carry documents with the above details and have them available for inspection”.
In the same month, the French Government issued a document in English entitled “Freight Cabotage Transport: the French Regulation. That stated:
“All drivers of vehicles used in cabotage operation must have the following documents in their possession ...”
There followed a list of the required information.
139. John Nolan was cross examined about both these documents. In relation to the Irish documents his attention was drawn to the statement that, when performing cabotage operations: ‘operators will need to have appropriate documentation aboard their vehicles as evidence of compliance with the new rules’. He was asked whether he was arguing that NT were not required to have the documents on board their vehicles. He replied:
“A: If you read the back page of that, ‘What is an international journey?’ The main kind of an international journey is the carriage of goods between member States of the EU where the point of departure is one Member State and the point of arrival is another Member State and the entitlement of these are unaffected. Other types of international journeys transiting or leaving the EU”.
He was reminded that the question had referred to cabotage and he was taken to the description of cabotage and the fact that it was only permitted after a loaded international journey. He said that when he read the Irish document he was not aware of the GB definition of cabotage. He was again reminded of the advice about documents. He began his answer part way through the question saying: “nowhere does it say that the sending of an unaccompanied trailer from Ireland to the UK and the collecting of it in the UK is national haulage”. The Traffic Commissioner intervened to invite John Nolan to answer the specific question which he had been asked but then suggested that he should make the point that he wanted to make first. John Nolan replied:
“A: I read this document and I read it again. I asked some questions and what is an international journey and the international journey is the carriage of goods between different Member States of the EU from the point of departure in one Member State to a point of arriving on another Member State, and the entitlement of these are unaffected. That’s what we have been doing for 20 years sir”.
Mr Hallsworth returned to his original question about the need for the documents to be in the vehicle. The following exchanges took place:
“Q: I am suggesting the document is very clear as to what it’s saying?
A: When I read this document – I know what you’re getting at – when I read this document, right, I read that and I read the back page, I says, ‘We are not doing cabotage. We are doing international transport’.
Q: What, even when you’re undertaking journeys within the UK from one point in the UK to another? That’s an international journey, is it?
A: That became an issue later on when I became aware of the UK definition of national and international”.
140. On 10 May 2010, the United Kingdom Department of Transport published a document entitled “Revised cabotage rules for hauliers operating in the EU”. The document was posted on the Business Link website. It also stated that the documents containing the required information in order to establish that an operation falls within the cabotage rules, must be with the driver.
141. On 21 May 2010, John Nolan emailed Caroline Hicks, the National Enforcement and Compliance Manager for VOSA complaining of a problem with the UK interpretation of the new cabotage rules which was different to the interpretation of the Irish Department of Transport. As a result, the company’s trucks were being “arrested in the UK, fined £200 and sent to Ireland”. (The Tribunal notes that at the date of this email, the new rules had only been in force for seven days). He went on that it was now very difficult for NT to undertake its business as it had done for 30 years. He requested clarification of points of interpretation and in the interim a “lay off” from stopping NT vehicles. A number of scenarios were set out and reference was made to the Combined Transport rules which he described as “technical and messy”. There then followed a telephone conversation between John Nolan and Ms Hicks. She explained the combined transport rules and the need for a laden international journey into the country before cabotage could be undertaken. Later that day, she sent an email containing the definition of “international carriage” contained in Article 2 of Regulation 1072/2009.
142. On the same day, Michael O’Mealoid, Assistant Principal, Road Transport Operator Licensing, Department of Transport, in the Republic of Ireland, emailed Duncan Buchanan, Head of Licensing Policy at the UK Department of Transport. The email contained the same set of scenarios that John Nolan had sent to Ms Hicks. Leeway was being sought by NT in relation to UK enforcement of the cabotage and combined transport rules.
143. The chronology produced by Caroline Hicks, presents a rather different picture. The first of 38 breaches of the cabotage/combined transport rules is shown, on her schedule, as occurring on 24 May 2010. It follows that the schedule shows that GFP’s started a little later than John Nolan suggested in his email to Caroline Hicks, (see paragraph 141).
144. Mr Buchanan responded to Mr O’Mealoid’s email on 21 May 2010 and provided his answers to the scenarios including queries concerning the 150km rule in relation to combined transport, (see paragraph 60). His response was followed up by a telephone conversation.
145. On 17 June 2010, John Nolan emailed Ettl Gunter, (of the Directorate-General for Mobility and Transport in the European Community) to inform him that he had spoken to Mr Buchanan on 16 June 2010 along with another haulier. He told Ettl Gunter that the purpose of the conversation was for the hauliers to express their dissatisfaction about VOSA’s interpretation of the “new rules” and for Mr Buchanan to explain the rules to the hauliers and to clear up any misunderstanding there might be. John Nolan went on:-
“It was a good conversation in that everyone put there (sic) point across – the conclusions were not good for us – in my opinion a bad day for international transport. But we were told “the rules are the rules” and this is how it is going to work in the UK until the commission changes them if they are changed. As stated before it appears the UK authorities are taking a very legalistic view regarding the interpretation of these rules”.
John Nolan set out a number of scenarios and summarised his understanding of VOSA’s interpretation of the rules. In relation to a cabotage related scenario, John Nolan concluded:
“both of these situations are very difficult for us in trying to the job and make a living. ... I personally do not agree with there (sic) interpretation – but that is how it is going to be at the moment. As stated with regard to trade between Ireland and the UK sometimes the paperwork is very little – there will now become another task for the transported (sic) to provide the driver paperwork to prove his case – difficult for us as the trucks never before had reason to come back to base in doing there (sic) daily tasks .. also as stated ferry companies are not good at providing evidence for the driver to keep when he leaves a port area on his person regarding the shipping of a vehicle .. the onus will now also be on the transporter to provide this ..”.
The underlining of the last part of this passage is ours. We will assess the significance of this passage in due course.
146. On 21 June 2010, John Nolan emailed Mr Buchanan stating:-
“The conversation last week was good and to the point – we may not have liked what you had to say regarding the new policy rules, the cabotage rules and how its is going to effect our day to day business with unaccompanied trailer working from a UK port – as I said it appears to be very “harsh” to an Irish plated operator like ourselves and Pat’s company in working between Ireland and the UK with unaccompanied trailers doing international transport – but we will endeavour to work with this and as you said the rules are the rules”.
The email contained further queries about the interpretation and application of the regulations.
147. John Nolan was asked in cross examination about NT’s endeavours to “work” with the UK interpretation of the rules. The following exchange took place:
“Q: After that date, 21 June until 11 January of this year, your company picked up 32 prohibitions for cabotage, breach of the cabotage laws. So how is that working within the rules Mr Nolan?
A: Well, again I have said to you there that we’re working within what we thought were the rules but some, the VOSA officials or the enforcement official, may not have agreed with us and because they didn’t agree with us as far as they were concerned we picked up, they prosecuted us for cabotage”.
148. In about September 2010, Mr O’Mealoid produced an extensive document entitled “Draft Cabotage and Combined Transport. Overview by Ireland”, also referred to as “JN/1”. This was passed to John Nolan at some stage. The document addressed the issues arising out of the interpretation of new cabotage rules and the how that was impacting on hauliers who were being told that the practices they have developed over many years were now illegal. It said that Irish hauliers in particular were facing severe difficulties when transporting goods to and from Ireland by ferry and they had a legitimate expectation that those activities were “perfectly fine”. The aim was to achieve a common understanding of the new rules and the impact they had on hauliers. The document warned:-
“Please note that these reflect the Department’s initial views only, and should be treated as highly confidential. It would not be appropriate for these matters to be made known to unauthorised people or to other Member States or to the Commission at this stage, before our views have been finalised. Care should taken not to allow this document and the Appendices to be disclosed inappropriately”.
John Nolan accepted that the document was, as it said, ‘an overview’ and an Irish interpretation of the position at that stage.
149. On 8 October 2010, John Nolan received an email from Jonathan Molony of the Irish Road Haulage Association. It forwarded an email from Mr O’Mealoid and that email had by way of an attachment, a document entitled “Report of meeting between the Department of Transport, Ireland, and the Department of Transport, UK, in relation to cabotage, combined transport, and international journeys”, also referred to as “JN/2”. The email stated:-
“… Here is an update of the areas of agreement between Ireland and the UK. Please note, that this is my understanding of what we agreed, and I’m pretty confident of it. However, until a formally agreed set of guidelines is produced, that both the UK and Ireland have approved, you cannot take this as Gospel yet. It may well be that on small matter or nuance, that the UK have a different understanding of what we agreed. Until it is all written down and spelled out clearly, as the UK have committed themselves to do, then we should not lean too heavily on this Report. That said though, I’m quite sure the UK will have no problem with this.
... so far this agreement is at Department level. It has not filtered down to VOSA or the RSA yet, and probably will not until the full set of guidelines is ready, and this will probably take a few weeks at least. Until then, VOSA officers will be unaware of this. We do not want to give them a half-baked set of guidelines which may need further tweaking or clarifications. It is best to have the whole matter ironed out completely before we actually release the guidelines ...”.
150. The report was a note of a meeting held on 20 September 2010. Under the heading “Main areas of agreement, which provide solutions to problems that Irish hauliers were facing in the UK” there appeared the following:
“Agreement to set out the geographical limits to combined transport on maps, and that flexibility would be shown when determining where the limits were (where the distance limit for combined transport brings it to any part of any postcode area in the UK, then the entire postcode area will be deemed to be within the permissible delivery area). Ireland agreed to conduct a similar exercise”.
Under the heading ‘Next Steps’ the document went on to say this:
“The UK said that it would convert all the areas of agreement set out in Ireland’s proposals into a set of Q&A guidelines, and send this to Ireland as a draft for final agreement. The resulting agreed document will be made available to all Irish (and other EU) hauliers as a guide to exactly what may and may not be carried out in the UK, and that this will also be the guidelines for UK enforcement officers in the UK, so that both hauliers and enforcement officers have a common, clear, detailed set of rules to operate by”.
151. John Nolan agreed in cross examination that he had read this document “many times”. He agreed that the document itself was not headed ‘Agreement’, but pointed to the heading ‘Main areas of Agreement’ in the body of the document. He accepted that he had not seen any map, issued by the UK, showing the geographical limits of combined transport and that he could not produce a map which had been agreed between the Irish and UK authorities to define what Irish based hauliers could do. He offered to produce the map which he had created from his reading of the Directive. When he did so he had to accept that none of the maps which he had produced showed postcodes. He added that the map with postcodes “would be at home on my computer as such”. He said that he had not submitted it to VOSA or the Department because “I didn’t know it was a problem so it never became an issue to me”. He was asked about the ‘Next Steps’ and the proposal to covert all the areas of agreement into a set of question and answer guidelines. He agreed that he had not seen any final agreement such as that proposed. He accepted that the document stated that as soon as an agreed set of guidelines was available the full text would be put on the Department’s website. He agreed that there was no such text on the website.
152. When he was asked to accept that there was, in fact, no agreement John Nolan said:
“In reading this I was of the frame of mind there was an agreement, rightly or wrongly, wrongly maybe, but that was the frame of mind I had. Now it is very hard to get contact with these people. There is very little information available with regard to cabotage or combined transport and from a UK point of view it is very difficult. There is no, what I would say, working examples like that was in JN1”.
A little later he was asked about the email from Jonathan Molony, and the attached report (paragraph 147 above) and, in particular, what he thought it meant when it said: ‘until a formally agreed set of guidelines in produced, that both the UK and Ireland have approved, you cannot take this as gospel yet’. This prompted the following:
“A: Like as I have said in my evidence, I had misread this, I have made a mistake, I am profoundly sorry. It started me on a line of actions that has me here today, but –
Q: Mr Nolan, second paragraph of that, ‘…did not filter down to VOSA or the RSA yet, and probably will not until the full set of guidelines is read, and this will probably take a few weeks at least. Until then, VOSA Officers will be unaware of this. We do not want to give a half-baked set of the guidelines, which may need further tweaking and clarifications. It is best to have the whole matter ironed out completely before (inaudible) the guidelines’. Now are you really suggesting to this Commissioner, you not only misread JN2, (the attached report), you misread this email as well?
A: When I got this email I was excited because this is a working document, this is an agreement.
Q: Indeed you would accept that it is very plain from JN2, ‘the next steps’ et cetera, that it is a step along the road to a formal agreement and not a formal agreement as such. You now accept that?
A: Yes, I do now.
Q: So is your evidence you misread JN2 and you misread the email as well?
A: Again when I got the document, my frame of mind is this is a working document”.
Mr Hallsworth repeated the question, putting it individually in relation to the report and the email. In relation to the report John Nolan said that he genuinely thought that there was an agreement. In relation to the email he said that “what I saw in that is there is an update on an agreement …”. Mr Hallsworth reminded John Nolan that the email expressly said that it should not be taken as ‘gospel’ yet. Asked what he thought that meant he replied: “That is me making a big error”. We will refer, in future, to John Nolan’s reliance on the reference to postcodes as ‘the postcode interpretation’.
153. John Nolan was then asked why VOSA had been unaware of the fact that NT was operating on the basis of a ‘postcode interpretation’ of combined transport. He said that no-one was telling him there were issues with it so he had not told anyone until a meeting with VOSA in June 2011, after the impounding of the two vehicles. On the third day of the Impounding Hearing Mr Hallsworth returned to this topic and asked whether John Nolan had explained to anyone else in the NT management team about his postcode interpretation. He replied: “What I said to them, to me that’s a working model with regard to the 150 kilometres. No one had asked me about the postcodes and I didn’t really inform them about postcodes”.
154. On 13 October 2010, John Nolan sent a further email to Mr Buchanan, this time querying the UK’s interpretation of “motor vehicle” which he described as not operating “within the intended spirit of the legislation”. Mr Buchanan responded on 20 October 2010, stating:-
“any tractor unit (GB or non GB) collecting an unaccompanied trailer, a container or goods from a port is undertaking a domestic GB movement regardless of the nationality of the trailer, container or goods. As such the vehicle will be required to comply with GB Operator Licensing rules unless exempt. (An example of where a vehicle would not be subject to GB Operator Licensing would be if the journey was done by a non GB vehicle operating within the rules of legal cabotage – no more than 3 journeys within 7 days of a loaded arrival in GB”.
155. On 25 October 2010, there was a meeting of the EC Committee on Road Transport. Mr Buchanan and Mr O’Mealoid were in attendance. In respect of the cabotage rules, the Committee confirmed that:
“A cabotage operation is always related to one transport document (CMR or other). A cabotage operation can involve several loading points, several delivery points or even several loading and delivery points, as the case may be”.
The minutes also recorded:
“Furthermore, IRU raised the issue of combined transport. The Commission confirmed its reading that the picking up of a semi trailer from the port to a destination within the same country does not constitute an international transport in the sense of Regulation (EC) No 1072/2009. UK considered this to be national transport, if it does not fall within the limits of combined transport”.
156. On the 7 December 2010, the Traffic Commissioner heard an application for an operator’s licence in the name of NRT Logistics Limited. (We have already referred to this Public Inquiry at paragraph 126 above). The creation of the company and the application had been prompted by the increasing numbers of GFPs that NT vehicles were attracting for breaches of the cabotage/combined transport rules and by the number of prohibitions the vehicles were receiving. By a written decision dated 6 January 2011, the Traffic Commissioner refused the application, being concerned by NT’s poor record of compliance in relation to overloading (34% of vehicles encountered by VOSA), prohibitions for mechanical defects (tractor units 24%, on the same basis and trailers 51%), prohibitions for drivers’ hours offences (20%), the ratio of vehicles found to be in breach of the cabotage rules (19 graduated fixed penalties issued since May 2010) and the number of vehicles found to be parked illegally.
157. John Nolan described the Public Inquiry as “a big education for us with regard to the way it works in the UK” and later as “a wake-up call”. He was referred to the Traffic Commissioner’s decision on the NRT application and agreed that he had read the decision. He accepted that at paragraph 10 the Traffic Commissioner had made it clear that he had to apply the law as set out in the GB legislation and he accepted that it had been agreed that the GB definitions were in accordance with the EEC rules.
158. On 11 January 2011, the first graduated fixed penalty following the Traffic Commissioner’s decision was issued. A further 14 were issued up to and including 14 June 2011.
159. John Nolan was then asked about the schedule of fixed penalty offences and it was pointed out that fixed penalty notices were being incurred after the decision in the Public Inquiry. He replied that there had been a falling off since February 2011 and that they had begun to obtain legal advice. He added that they were contesting four of the GFP notices.
160. By a letter dated 28 January 2011 Ms Hicks informed John Nolan of VOSA’s increasing concerns about the nature of the company’s transport operation within the UK:-
“In recent months, VOSA has carried out a significant number of vehicle examinations involving vehicles operated by your company. Numerous examinations have revealed that many of these vehicles were being operated in breach of the regulations relating to cabotage and combined transport operations. ... Failure to adhere strictly to the rules concerning cabotage or combined transport rules means that the host Member State can take legal action against an operator. ... To continue your operation in the same mode as previously encountered, to be lawful, Nolan Transport would need to be the holders of a bona fide UK Operator’s Licence and the vehicle’s used must be specified on that licence ... I must inform you that, where a VOSA Examiner has reason to believe that a vehicle is being used on a road in contravention of Section 2 ... he may detain and immobilise the vehicle and its contents indefinitely ... with that in mind, VOSA will invoke its powers of detention if your current method of operation continues in the UK.
In an effort to prevent any further enforcement action, VOSA would be keen to learn of any changes you plan to make to your operations involving UK journeys before taking further action. Failure to either comply with the cabotage or combined transport rules, or cease unlawful journeys, will result in your vehicles being detained indefinitely.
VOSA would expect a response to this letter within 21 days ...”.
161. That letter resulted in a meeting taking place on 16 February 2011. VOSA was represented by Ms Hicks along with Kevin Rooney and Neil Barlow and NT by Richard Nolan, Cameron McDonald and Colin Murphy along with John Dyne of Dyne Solicitors. During the meeting, the VOSA representatives explained the interpretation and application of the rules on cabotage and combined transport as they were being implemented in GB as well as the contents of Ms Hicks’ letter. Agreement was reached as to the ports that complied with the 100 kms rule for combined transport. It was stressed that in order for journeys to qualify as cabotage, a laden international in-coming journey was required before the “3 in 7” cabotage rule could apply. VOSA agreed that a cabotage vehicle could move on to combined transport once it had completed its “3 in 7 journeys” without the vehicle having to leave the country. NT specifically requested clarification as to whether vehicles engaged in Combined Transport could go outside the radius of 150 kms, provided that the delivery point was within that radius. Ms Hicks replied that the precise wording of the Regulation would be checked and that NT would be informed in writing. It was pointed out that if the Regulation required a vehicle engaged in combined Transport to remain within the radius of 150 kms at all times it meant that vehicles travelling from Fishguard and Pembroke Dock would not be able to go over either of the Severn Crossings. Maps were produced by NT which also indicated that the Severn Crossings were outside the radius. The NT representatives were told that if it was necessary to remain within the 150 kms radius at all times they would be unable to undertake combined transport in Somerset, Devon and Cornwall.
162. The meeting was followed up by an email sent by John Dyne to Ms Hicks. He stated that the directors of NT were extremely anxious for it to be made clear that they wished to comply with the rules “to the letter” and that they did not wish their actions to compromise UK laws or jeopardise their application for a UK operator’s licence. The purpose of the meeting and the email was to establish how the combined transport and cabotage rules applied so that “we need to understand the rules so we can figure out the telematics”. He then posed a number of questions and scenarios in relation to both combined transport and cabotage. An exchange of emails followed with Ms Hicks providing answers which were then further queried by Mr Dyne. Of note however, is Ms Hicks’ email of 3 March 2011, in which she provided the clarification in writing in relation to whether or not a vehicle engaged in combined Transport must remain within the 150 kms radius at all times. She quoted Article 1 of the 1992 Directive, (see paragraph 60), and stated:-
“crucially, not only does the wording allude that the destination must be within a 150km radius, it also explicitly says that the journey, in its entirety, should be within that distance. Therefore the VOSA position is that the vehicle shouldn’t venture outside the 150km radius at any point in the journey”.
163. John Nolan said, that he was not aware of this exchange of emails. He went on to say that whoever in NT had received it had not shown it to him. He was specifically taken to the passage quoted above and it was suggested that “it could not be clearer, could it?” He replied: “No, not that one”. He went on to repeat that he had not seen it and he was then asked whether he had made it plain to NT’s solicitors that he was using a ‘postcode interpretation’. He replied: “They knew I had a working system, well, they know I had a working system, they didn’t know …”. Mr Nesbitt intervened to raise the question of privilege. This prompted a suggestion from the Traffic Commissioner to which we will return later.
164. Richard Nolan agreed that the correspondence in February 2011 did not mention the ‘postcode interpretation’. He was asked why that was. He replied that two matters came together at pretty much the same time. One was the refusal to grant an operator’ licence to NRT and the other was the letter of 28 January 2011 from Caroline Hicks. As a result he decided that there were five areas of concern. He retained one of them, namely mechanical issues, and delegated the other four, which included combined transport and cabotage. Mr Nesbitt returned to this issue a little later. Richard Nolan said that he was not aware of the detail of the postcode interpretation because John Nolan was handling that area. He went on to say, in relation to the fact that the postcode interpretation was not raised in correspondence or at the meetings:
“I didn’t really know the full detail of it, you know, to bring an intelligent question to both of the meetings that I had with VOSA, which were constructive and good”.
He then stated, expressly, that he did not know, at the time of the two meetings, about the system that his brother had created. The Traffic Commissioner then asked:
“Q: So you didn’t know that your brother was operating using the postcode system?
A: Not that, no, not that detail. I did not, no, because I think that we asked every other question”.
He then went on to explain that NT had been getting prohibitions for cabotage/combined transport offences occurring some distance from the ports of entry from Ireland. He said that as these had been eliminated he assumed that the matter was in hand.
165. In cross-examination Richard Nolan was reminded that VOSA were saying, in the letter of 28 January 2011, (paragraph 159 above), that it believed that NT was operating outside the rules relating to the exemptions for cabotage and/or combined transport. Richard Nolan agreed and added that he had said at the meeting: “We don’t do domestic transport” only to be “pulled up on it”. A little later, Richard Nolan agreed that NT had gone to talk to VOSA because they were concerned to “get it right”. The cross-examination continued:
“Q: The point is, did you inform yourself in advance of that meeting? Did you read the combined transport and the cabotage regulations to prepare yourself?
A: I did. I was getting into it at that point but what I felt was better, I brought a regulatory solicitor with me, which I did.
Q: One of the things that you discussed at that meeting is referred to, the result of it is referred to on page 231, (ie the email of 3 March 2011 quoted at paragraph 162), which is combined transport. What does a 150 kilometre journey mean? Do you remember that?
Q: And Miss Hicks said she would go away and look at the exact wording of the Directive and get back to you?
A: She did, she did.
Q: So at page 231 you’ve got her response to Mr Dyne to say, ‘I have actually looked at the Directive. This is the answer. The (inaudible) should not venture outside the 150 kilometre radius at any point in the journey’.
Q: Well, that’s a letter that she sent to your solicitor. Were you aware of that? Was that copied to you?
A: It was.
Q: It was copied to you?
A: It was. I did see it. It was forwarded on to me, or copied on to me, I’m not sure.
Q: Did you copy that to your brother John who at this stage, as I understand it, was in charge of looking after combined transport and cabotage?
A: I didn’t.
Q: Why not?
A: At that point we weren’t in agreement with VOSA that you could, that that actually was the situation. I probably, in fairness, didn’t put the massive emphasis on this that this has tuned out to be and for that … .
Q: Mr Nolan, forgive me, with all due respect to you, I suggest that doesn’t make sense. That was a question that was asked at the meeting, ‘please define how the UK, the GB interpret combined transport and what that means?
A: But I put it back to you, we had ten to twelve conversations or ten to twelve questions.
Q: It was a very short email wasn’t it? It is specifically on this point.
A: Yes, this email is, as is the ones about empties, as is the ones about … .
Q: Exactly. This is VOSA giving their view, their advice, which is what you were at the meeting to seek. This is them giving it to you what their interpretation is?
A: We were trying to figure out … . The purpose of that meeting was to figure out where are we going with this? How do we get round that, and this was one of the topics, but by no manner of means the only one. …”.
Shortly afterwards Mr Hallsworth again asked whether the email of 3 March had been passed to John Nolan. Richard Nolan said that he knew that John Nolan had a system, that he believed that it worked because the GFP’s for vehicles going outside the 150 kilometre radius appeared to have stopped, but that he had not passed the email on, even though he disagreed with VOSA’s interpretation of the Directive. He accepted that he did not know the full detail of the system which John Nolan was operating and that he was not aware that it was based on postcodes.
166. On 16 February 2011 (the same day as the meeting in Bristol), John Nolan emailed Duncan Buchanan setting out his understanding of “what is allowed” in relation to cabotage. Further scenarios were given. Attached to the email was the French document “Freight Cabotage Transport: the French Regulation, which he described as “one of the better documents” he had read. At page 6 of the document the second paragraph, under the heading: ‘What documents are required for any cabotage operation’ the document states: “All drivers of vehicles used in a cabotage operation must have the following documents in their possession …”. The documents specified cover the requirements of Article 8.3 of Regulation 1072/2009. In his reply Mr Buchanan agreed that the document was a good one and provided answers and guidance to the scenarios set out in the email.
167. In cross examination of John Nolan Mr Hallsworth began by drawing attention to the requirement that drivers of vehicles involved in cabotage operations should have the documentation in their possession. His attempt to ask the obvious question was disrupted by various interventions, including one from John Nolan, who said:
“Like my reason for sending that document to Mr Buchanan was, it’s a graphical illustration of the French understanding of cabotage in the sense it shows you what you can do and I put my comments on load in the UK, deliver one to port, deliver two to port, deliver three to port”.
Mr Hallsworth then spelt out the point namely that in a document which John Nolan had described as a ‘good one’ the French authorities were agreeing with the Irish authorities that the documents had to be available in the vehicle to enable enforcement authorities to check that it was being operated within the exemption. John Nolan replied: “A good graphical illustration. Now the French use the word ‘weigh bill’. I don’t know what a weigh bill is, to be perfectly honest with you”. There followed some discussion as to what might be meant by weigh bill and John Nolan pointed out that CMR’s were not used between the UK and Ireland, which made life more difficult for hauliers. Then the following exchange took place:
“Q: Mr Nolan, the point, the point I make to you again and it will be the last time I make it because the answer seems to differ with all due respect to you …
A: No, it doesn’t, sir.
Q: The Irish document and the French document make it very plain the driver should have documents with him on the vehicle. Yet your interpretation seems to be, ‘Well, its all right, I am back at base because I have a problem producing documents, getting them copied whatever, I can produce them later’. That is not what either the regulations or the documents we referred to say, is it?
A: And I’m explaining to you the realities and the difficulties with documentation trading between some member States that you don’t want to”.
168. On 24 March 2011, Mr Buchanan sent an updated briefing note to the Irish Government and Stena Line which had a file reference “110324 CT”. It was entitled “Combined Transport Directive Overview (Short Sea) – Key points for hauliers considering operating under EU Combined Transport Rules”. This document was seen by John Nolan as he subsequently sent Mr Buchanan an email entitled “FW: 110324 CT briefing note” with further questions on the subject. The briefing note made clear that the terms of the Combined Transport Directive had to be complied with “in full”. It went on:
“The Combined Transport rules are very specific and very restrictive, and proven conformity to each and every aspect is required if a claim to be operating under these rules is to be substantiated”.
The document went on to set out the documentary evidence that was required and emphasised the need for port stamps to be affixed to documents so that conformity with the 150km road journey limit could be determined.
169. On 13 April 2011, Vehicle 05WX 5498 was impounded. The driver could not produce the paperwork for the journeys undertaken by the vehicle and there were doubts over a number of the cabotage journeys it was said that the vehicle had undertaken and the number of empty trailer movements unconnected with cabotage journeys. As questions concerning paperwork and empty trailer transportation had not been previously raised by NT, Miss Hicks, Kevin Rooney and Neil Barlow agreed that provided NT could provide all the relevant paperwork to establish cabotage and upon NT agreeing that they understood VOSA policy and the application of the cabotage and combined transport rules, that on grounds of genuine error the vehicle would be returned to NT on this occasion. A deadline of 11.00hrs on 14 April 2011 was given for providing the relevant documentation in order to avoid incurring advertising charges in the London Gazette (the deadline for the placement of such advertisements being 11.00am). The paperwork was in fact provided at 15.15hrs on 14 April 2011. There then followed a series of emails and telephone conversations between Miss Hicks and Mr Dyne concerning the transportation of empty trailers in the context of cabotage. Miss Hicks relied on the Transport Tribunal decision Appeal 2003/139 W C Commercials Limited in arguing that empty trailer movements constituted the movement of goods and therefore amounted to cabotage. In an email dated 19 April 2011 Mr Dyne informed Miss Hicks that NT was anxious to have their vehicle returned. He continued:-
“Having thought we had ironed out most if not all the issues it seems there are still a few left to deal with. If VOSA’s interpretation of the rules is correct then my clients will abide by such interpretation (our underlining). However, they remain rather confused by the approach VOSA is taking for the following reasons.”
He then went on to argue that un-laden trailer movements within the context of cabotage work should not be treated as separate cabotage journeys. In doing so, he doubted whether W C Commercials Limited was relevant as that appeal concerned the movement of empty trailers belonging to customers (during the course of a trailer repair business) rather than the movement of empty trailers owned by the transport undertaking.
170. On 20 April 2011, Miss Hicks wrote to John Nolan via Mr Dyne. She informed him that vehicle 5WX 5498 was impounded because, contrary to Article 8(3), the driver was unable to produce any paperwork for either his incoming international journey or his subsequent cabotage journeys except for the journey he was on at the time he was stopped. She reminded him that Article 8(3) requires “clear evidence to be produced for the incoming international journey and each consecutive cabotage operations carried out”. As all of the paperwork had subsequently been produced, VOSA was prepared to release the vehicle this time:-
“on the grounds of genuine error. We note however that the decision of the Traffic Commissioner at the Public Inquiry did contain advice to your company of the requirement to carry paperwork in order to comply with cabotage regulations. We would like to advise you that any future encounters, where the driver fails to produce paperwork, compliant with ... Article 8(3), showing consecutive cabotage operations, which result in an impounding will not be returned without an application under Regulation 10 (of the Impounding Regulations).
With regard to the unladen trailer journeys, it is VOSA’s understanding that there must be consecutive cabotage operations, with supporting paperwork. Coincidental unladen journeys are acceptable but, in this instance, the moving of trailers around the country, but not in conjunction with any of the cabotage journeys or incidental to them, but actual “trailer swaps” which are completed journeys in their own right, would be considered a cabotage journey ..”
Miss Hicks again referred to W C Commercials Limited and the rejection of the submission that the towing of an empty trailer did not constitute carriage of goods. She concluded by stating that the need for NT to move trailers around the country arose from the “established” nature of its business in Great Britain but that until such time as NT was licensed in Great Britain, they must operate within the boundaries of cabotage.
171. In his email reply to the above letter dated 3 May 2011, Mr Dyne stated:-
“My client confirms that it is fully aware of VOSA’s position on the matter ... Nolan Transport wishes to make it plain it will at all times endeavour to calibrate its operations so they are fully compliant. VOSA will of course need no reminding that the UK Courts are the final arbiter on the law and Nolan Transport is of course entitled to seek guidance not only from VOSA but its own legal advisers and reserves the right to do so. Nolan Transport will certainly be taking account of what VOSA has to say and will very much wish to ensure that the lines of communication between it and VOSA remain open and cordial ..”.
We note that there is no challenge, in this email reply, to VOSA’s assertion that the driver was required to be in a position, if stopped, to produce the clear evidence required by Article 8.3.
172. In cross examination John Nolan was reminded that the Traffic Commissioner, in paragraph 13 of his decision on the NRT application, had said that VOSA had pointed out that in many instances where a GFP had been issued for breach of the cabotage rules the journey could have met the requirements of a combined transport operation if a proper paper trail had been provided. The Traffic Commissioner had also pointed out in paragraph 13 that the need for paperwork was an express requirement of the legislation relating to combined transport. Mr Hallsworth also reminded John Nolan that Caroline Hicks had pointed out that NT’s paperwork was not up to scratch and that this was why the vehicle had been impounded on 13 April 2010. Mr Hallsworth went on:
“Q: So how many opportunities do you want, Mr Nolan, to get it right? How many more do you need?
A: Like we are continually trying to improve our paperwork”.
173. In relation to the documentation required to provide the ‘clear evidence’ of cabotage operations Mr Hallsworth reminded Richard Nolan that the reason given by VOSA for impounding the vehicle on 13 April 2011, (paragraph 168 above), was that the driver was unable to produce the necessary paperwork. Richard Nolan accepted that there was no mention in Mr Dyne’s reply of the fact that NT challenged the need to have the paperwork available in the vehicle.
174. On 5 May 2011 Caroline Hicks wrote to Richard Nolan. It appears that she was responding to a question as to whether a Conditional Offer of a Fixed Penalty, (in relation to the vehicle impounded on 13 April 2011), had been issued in error. She replied that it had been appropriately issued because the driver had been unable to produce any paperwork, save that for his current journey, with the result that there was a breach of the requirements of Article 8.3.
175. In cross-examination Richard Nolan said that this offer of a Fixed Penalty was being challenged. In effect, however, he accepted that in the days before the Mercedes was impounded NT had not challenged VOSA’s interpretation that the documents had to be available in the vehicle.
176. On 17 May 2011, the DAF was impounded. On the same day, Mr Dyne emailed Miss Hicks suggesting that VOSA was applying the 150kms radius rule in a “strained and/or over-rigid” way and that the spirit and purpose of the legislation would be best met by allowing combined transport operations where the final destination is within a radius of 150kms from the port. He concluded by informing Miss Hicks that as the vehicle was undertaking combined transport operations, any attempt to interfere with the vehicle by VOSA would be unlawful and would be contrary to the general principle of EU law that action taken against foreign nationals in purported exercise of rights bestowed by the EU should be proportionate and exercised in a non-discriminatory way. Reference was made to Article 6 of the European Convention of Human Rights. He requested the return of the vehicle.
177. In response Miss Hicks wrote to Richard Nolan on 18 May 2011 informing him that the vehicle had been impounded because upon the evidence available at the roadside, the vehicle did not meet the restrictions of the Combined Transport rules. VOSA had advised the company of their views on journeys going outside the 150kms radius on 3 March 2011. She repeated the advice that she had given in that email. Further, the driver was unable to provide full paperwork and in the alternative, the vehicle was unable to meet the requirements for lawful cabotage. The letter was copied to Mr Dyne.
178. Then on 20 May 2011 the Mercedes was impounded.
179. As a result, Mr Dyne sent an email to Miss Hicks questioning STE Rustage’s approach of treating three separate collections and a single delivery point as three separate cabotage journeys as VOSA had previously agreed that multi-drop work would constitute one single journey. He submitted that the unladen journeys undertaken by the vehicle fell within Article 1(5)(d) of the 2009 Regulations, (see paragraph 58), and further submitted that unladen journeys could in any event also form part of a leg of a single international journey and a single cabotage journey. He warned of “multiple litigation and judicial review proceedings” unless VOSA “got to grips” with the issues. He expressed disappointment that VOSA was taking such an “uncompromising position” when Nolan Transport had taken the trouble to engage UK lawyers to assist with the application of the complex rules. He continued:-
“Nolan Transport has repeatedly, through ourselves, indicated how it wishes to operate within the rules and also to maintain dialogue with VOSA. Nolan Transport has been attempting to operate within the law and it is unfortunate that on three occasions VOSA has seen fit to impound their vehicles. Where is the sense in this particularly given the complexity of the rules and the fact that our review of the law has demonstrated that VOSA’s application of the rules and the formal guidance that has been issued may be wrong in law? ... I would invite VOSA to reconsider its approach and ensure its officers on the ground fully understand the rules because I have been on the receiving end of some rather disquieting reports that one particular officer has been waging an overly aggressive and at times seemingly vindictive campaign against Nolan Transport”.
180. Miss Hicks replied on 24 May 2011 by stating that VOSA had consistently applied the rules as they understand them and it was now for the Traffic Commissioner to make a decision in the case of both vehicles. She requested information concerning a “particular officer” but did not receive any further information.
181. In a separate email dated 23 May 2011 Mr Dyne explained that Nolan Transport was “in the process of calibrating its systems to ensure its vehicles operate within cabotage and combined transport rules”. He emphasised that Nolan Transport had received advice from himself and from Counsel. He flagged up that “transient journeys exceeding 150kms” would have to be dealt with by the appropriate tribunal. He then posed eight transport scenarios with nine sub-scenarios, which he advised were based upon the advice he had given Nolan Transport upon cabotage and combined transport. He concluded:-
“Nolan has always expressed a desire to operate within the rules and it is a matter of great concern to them that three of their vehicles have recently been impounded in circumstances where it is maintained by us the rules have not been infringed. It will be a matter for comment as to why VOSA has chosen to impound the vehicles as opposed to simply offering the option of fixed penalties or the right to challenge VOSA’s interpretation of the rules”.
182. This email was followed by a request for a further meeting. It was at this meeting, on a date between 6 and 20 June 2011, which was attended by Richard and Noel Nolan and Mr Dyne that it was contended for the first time that they did not believe that they were required to carry documentation satisfying Article 8(3). They were reminded of the previous advice given by Miss Hicks and of the history of communications and prohibition history relating to breaches of the cabotage and combined transport rules. Nolan Transport maintained they were being “victimised”. The outstanding answers to the numerous scenarios put forward by Mr Dyne were answered in an email from Miss Hicks which dealt with the principles in general terms on 20 June 2011.
183. In cross examination John Nolan was reminded of the evidence of Caroline Hicks, who had said that as far as VOSA were concerned the first time that the ‘postcode interpretation’ in relation to combined transport was raised was in the skeleton argument produced by Mr Nesbitt for the Public Inquiry and dated 15 July 2011. Mr Hallsworth asked him to explain why that was. John Nolan replied: “I had stood back from being heavily involved to being very little involved. I didn’t really get back involved into this stuff until we were preparing for this case”. John Nolan went on to confirm that a time came when on four or five days per week he would work in the morning and go home at lunch time. He said that when his brother Richard went to a meeting with VOSA on 16 February 2011 he, (Richard), knew nothing about the postcode interpretation. He went on to explain that it was a computer programme, which worked and that as a result no one else needed to know about it.
184. In cross-examination Richard Nolan said that he first became aware of the postcode interpretation about two weeks after the DAF was impounded. He agreed that he had discussed with NT’s Solicitors applying for the return of the vehicles. He was asked why there was no reference to the ‘postcode interpretation’ in the applications for the return of the vehicles, which were dated 4 and 10 June 2010. He replied: “In that time we figured it out where the logic was coming from precisely”.
185. On 12 August 2011, (the third and last day of the Public Inquiry), Mr Nesbitt produced a letter from DyneSolicitors, who instructed him. Before we come to the terms of the letter and our approach to it we need to explain how and why it was produced. Towards the end of the second day of the Public Inquiry, on 4 August 2011, Mr Nesbitt intervened to raise the issue of privilege, (see paragraph 163 above). The questioning at that stage related to combined transport and the issue of postcodes. The Traffic Commissioner interposed to say that in another, unrelated Public Inquiry, earlier in the week, an issue had arisen as to whether an operator had acted illegally but in accordance with advice he had received from his Solicitors. The Solicitor concerned was unavailable but the Traffic Commissioner indicated that he would be satisfied by a letter from the Solicitor, confirming that the operator had not acted contrary to the advice which the Solicitor had given. The Traffic Commissioner accepted that the situation in that case was different to the present case but put the idea forward as a possible solution to problems relating to privilege. Mr Nesbitt made the point that he was anxious not to create a situation which resulted in a waiver of privilege.
186. At the end of his cross examination Mr Hallsworth returned to the issue of the ‘postcode interpretation’ and John Nolan’s answer referred to the fact that by about May 2011 NT was getting advice from DyneSolicitors. Mr Nesbitt began his re-examination by saying that this ‘brings us full circle back to where the last hearing concluded’. Mr Nesbitt went on to say that he was in a position to offer a very short letter summarising what the position was in terms of the advice given. He said that he was happy to produce it as long as no-one was going to argue that by doing so privilege would be waived “beyond what is said in the letter”. Mr Hallsworth made the point “it just seems to me to be rather last minute again really”. The Traffic Commissioner said: “I think I’d rather treat it in terms of I’ll attach what weight is appropriate to whatever evidence is given to me”. He then suggested that he should adjourn for a short time. By the time he returned Mr Hallsworth had seen a copy of the letter. The Traffic Commissioner was also given a copy.
187. The letter is dated 11 August 2011, we quote it in full and we will assess the weight which it must be given in due course:
This letter is written solely for the purposes of these proceedings and in the light of the suggestion made by the Traffic Commissioner following a question from Mr Hallsworth in the proceedings.
On the basis that this information is provided solely to explain the state of mind and knowledge of Nolan Transport, we can inform the Traffic Commissioner that prior to the 20 May 2011 Nolan Transport was advised that the requirement of Article 8(3) of EC Regulation 1972/2009 as to the production of documentation applied to the haulier.
We would also like to add that in connection with combined Transport no advice was asked for or given in relation to the issue of the postcode system and we were not aware of it use by the company until after the 20 May 2011”.
“NO KNOWLEDGE” – The TRIBUNAL’S ASSESSMENT of the FACTS.
188. We have described in paragraph 134 above the way in which the business of NT was managed with individual Directors taking responsibility for particular areas of the business, but knowing little, if anything, about the detail relating to other areas. In our view it follows from this method of running the company that questions relating to the state of mind or the knowledge or otherwise of the company have to be assessed by reference to the state of mind or knowledge or otherwise of the individual with responsibility for the area in question. For the purposes of this appeal that means John Nolan and, to a lesser extent, Richard Nolan.
189. At paragraph 93 of his decision on the application for the return of the impounded vehicles the Traffic Commissioner said this:
“By any standards there are significant knowledge management issues within NT. On more than one occasion I was told that the way in which the directors worked was a collegiate arrangement, there was no formal hierarchy. As NT has 13 formal directors with 6 or 7 who undertake executive roles, I regard it as inevitable that there are issues relating to control and knowledge management”.
In our view this conclusion is amply justified by the evidence we have quoted from John and Richard Nolan. We have in mind in particular John Nolan’s failure to tell anyone else involved in the management of the company that he was operating the ‘postcode interpretation’ and Richard Nolan’s failure to provide John Nolan with a copy of the email dated 3 March 2011 from Caroline Hicks. However these are simply two very obvious examples of a culture of keeping information and tasks in their own sealed compartments. In other words nothing much changed in the period between January and May 2011.
190. From about April 2010, when the Irish Department for Transport published the document referred to at paragraph 138 above, John Nolan was aware that the new rules could have an adverse effect on the way in which NT had been conducting its business for many years. The evidence which we have summarised above shows that he was actively engaged in trying to identify how the rules were going to be interpreted. To that end he gave examples of a large number of hypothetical journeys to various different people with the perfectly understandable aim of ensuring that the new rules would have a minimal impact on NT’s way of doing business. Any answers which appeared likely to cause NT difficulty were met with further questions. While we accept that John Nolan was seeking clarification, as he was perfectly entitled to do, we also note that requests for clarification were coupled with a request that in the meantime VOSA should ‘lay off’ stopping NT vehicles. In our judgment the importance of this secondary purpose should not be underestimated. While the issuing of GFP’s continued the first impounding took place nearly a year later in April 2011. We are satisfied that one reason for the numerous questions posed by John Nolan and others was to ‘buy time’ while another was to find every possible loophole in the new rules which would enable NT to continue to operate as it had done in the past. On a number of occasions it was acknowledged on behalf of NT that they were aware of VOSA’s interpretation of the rules and it was said that ‘if VOSA’s interpretation of the rules is correct then NT will abide by such interpretation’, (see paragraph 169) and that: NT ‘confirms that it is fully aware of VOSA’s position on the matter … NT wishes to make it plain it will at all times endeavour to calibrate its operations so they re fully compliant’, (see paragraph 171). We have to say that we have found no evidence of those words being converted into effective action, on the contrary NT have simply carried on as before.
191. It is worth repeating, at this stage, what it is that NT must prove in order to succeed in an application based on regulation 10(4)(c) of the 2001 Regulations, as amended. Regulation 10(4)(c) requires the owner to prove: “that, although at the time the vehicle was detained it was being, or had been used in contravention of section 2 of the 1995 Act, the owner did not know that it was being or had been, so used”. In our view it is important to remember that the Regulation is directed to use in contravention of the requirement to hold a GB operator’s licence. At paragraph 10 of his decision on the NRT application, the Traffic Commissioner said that it had been conceded that as a GB Traffic Commissioner he would apply the law as set out in GB legislation and that it was also agreed that the GB definitions were in accord with the EEC rules. In our view these concessions were rightly made. That being so the general question posed by Regulation 10(4)(c) can be framed more precisely in relation first to the DAF, where the issue concerns combined transport and second in relation to the Mercedes, where the issue concerns cabotage. The question in relation to the DAF is whether NT can prove that it ‘did not know that the way in which it was operating the vehicle breached the requirements of the exemption for combined transport as set out in the 1992 Directive and the 1996 Regulations’. The question in relation to the Mercedes is whether NT can prove that it ‘did not know that the way in which it was operating the vehicle breached the requirements of the exemption for cabotage as set out in Regulation 1072/2009 and the 2010 Regulations’.
192. Did NT have actual knowledge of the rules relating first to combined transport, (the DAF) and second to cabotage, (the Mercedes)? In addition did they have actual knowledge of the way in which VOSA had indicated that they intended to apply those rules? In our view this is an appropriate and important starting point but we recognise that actual knowledge of these matters may not be decisive because it is open to NT to argue, as they have done, that they were operating in the belief that VOSA’s interpretation was wrong.
193. We are satisfied that both John Nolan and Richard Nolan knew of all the relevant Regulations and Directives. In the case of John Nolan the hypothetical journeys which he put forward show that he had a good working knowledge of all of them. In the case of Richard Nolan he said, (see paragraph 165), that before the meeting on 16 February 2011 he read the combined transport and cabotage regulations.
194. We are also satisfied that through John Nolan and/or Richard Nolan NT had actual knowledge of the way in which VOSA believed that the rules should be interpreted. The following specific instances are relevant to the grounds on which the two vehicles were impounded. On 21 May 2010 Caroline Hicks sent John Nolan an email setting out the definition of international carriage, which makes it quite clear that the point of departure and the point of arrival must be in two different Member States. On 27 May 2010 Duncan Buchanan responded to one of John Nolan’s questions by saying:
“The journey below 150 kms MAY be considered as combined transport, however every element of the combined transport directive must be satisfied, including all the provisions of proof required. If stopped … it would be for the driver to prove that the terms of the combined transport directive had been met in full on an earlier job”.
On 17 June 2010 John Nolan emailed Ettl Gunter, (see paragraph 145 above). The last part of the second quotation from that email, which we have underlined, makes it clear that John Nolan knew that the relevant paperwork, to prove cabotage, was required to be with the driver. While he stressed the difficulty that this would cause, in the context of trade between Ireland and the UK he did not question the correctness of this interpretation of Article 8.3. On 16 February 2011 Richard Nolan was present at a meeting attended by John Dyne, (NT’s Solicitor) and Caroline Hicks and other members of VOSA, (see paragraph 161). VOSA explained its interpretation of the rules and NT specifically requested clarification as to whether vehicles carrying out combined transport operations could go outside the 150 kms radius from the port of arrival. Clarification was promised after the precise wording had been checked. It was given on 3 March 2011 in an email to John Dyne which Richard Nolan accepted that he had seen, (see paragraph 165). The Directive was quoted and VOSA’s position was spelt out, ‘the vehicle shouldn’t venture outside the 150 km radius at any point in the journey’. On 20 April 2011, following the impounding of an NT vehicle on 13 April 2011, Caroline Hicks wrote to John Nolan saying:
“The vehicle was impounded as the driver was unable to produce any paperwork for any of the journeys except the current journey which is contrary to Regulation (EC) 1072/2009, Article 8.3 this section requires clear evidence to be produced for the incoming international journey and each consecutive cabotage operation carried out”.
The letter went on to make it clear that although the vehicle was being returned on this occasion if there were any future occasions on which the driver was unable to produce the paperwork they would result in impounding and, if NT wanted to get the vehicle back, would require an application. On 5 May 2011 Caroline Hicks wrote to Richard Nolan, (see paragraph 174), explaining that the vehicle had been impounded because the evidence at the roadside did not establish that it was carrying out a combined transport operation nor did it meet the requirements of a lawful cabotage operation.
195. In our view NT probably had actual knowledge that the DAF was not engaged in combined transport, because it was not transporting goods between two Member States but was transporting them between two parts of the same Member State. In other words a fundamental ingredient of a combined transport operation was missing. However with the exception of this point it seems to us that it is more appropriate to treat the actual knowledge possessed by John and Richard Nolan and therefore by NT as being important background information against which to consider whether or not NT had imputed actual knowledge.
Imputed Actual Knowledge
196. We must consider both of the situations in which actual knowledge can be imputed. First we must consider whether John Nolan ‘wilfully shut his eyes to the obvious’ and, if so, in what way. Second we must consider whether Richard Nolan ‘wilfully and recklessly failed to make such inquiries as an honest and reasonable man would have made’. We will consider these issues first in relation to the Daf and combined transport and second in relation to the Mercedes and cabotage.
197. In our view when adopting the ‘postcode interpretation’ in relation to combined transport John Nolan shut his eyes to the obvious warnings, (a) in the document entitled ‘Draft Cabotage and Combined Transport: An Overview’, (see paragraph 148), and (b) in the report attached to the email from Jonathon Molony, warning that there was no formal agreement on which he could safely act, (see paragraphs 149-152). In addition we conclude that he also shut his eyes to the obvious facts that (i) no ‘formally agreed set of jointly approved guidelines’, as envisaged in the report attached to the Molony email, was ever issued, (ii) that no maps setting out the geographical limits to combined transport, including the postcode interpretation, as envisaged by that report, (see paragraph 150), were ever provided and (iii) that no Q&A guidelines, as envisaged under the heading ‘Next Steps’, (see paragraph 150), were ever given. In addition, in relation to combined transport, if we are wrong in concluding that NT had actual knowledge that the Daf could not be conducting a combined transport operation, because it was not transporting goods between two Member States, then we conclude that John Nolan, in devising the computer programme designed to assess whether a journey came within the definition of combined transport or cabotage shut his eyes to the obvious fact that transporting goods from Northern Ireland to Great Britain did not involve the transport of goods between two Member States.
198. The next question is whether in shutting his eyes to the obvious John Nolan was acting wilfully, in other words deliberately or intentionally, or whether his failure to see what should have been obvious can be explained on the basis that it was accidental or inadvertent. We will first consider each instance separately but in our view it is both permissible and also instructive, on this issue, to take a broad view as well because the pattern which emerges is helpful.
199. In relation to combined transport John Nolan acted on what he says that he took to be agreement about the postcode interpretation but ignored the clear warnings that there was no formal agreement. He agreed in cross-examination that he had read the note of the meeting on 20 September 2010 ‘many times’. Accepting that this is correct it seems to us that it means that it is unlikely that his failure to act on the warnings was accidental or inadvertent, instead the probability is that it was deliberate and intentional and arose from his determination to ensure that NT continued, for as long as possible, to operate as it had done in the past. In our view this conclusion is reinforced by the fact that John Nolan knew that the documents envisaged that a ‘formally agreed set of jointly approved guidelines’ would be issued, that maps setting out the geographical limits to combined transport, including the postcode interpretation, would be provided and that Q&A guidelines would be given and that he knew that NT had not received any of these documents. Finally, in relation to combined transport, John Nolan was responsible for setting up the computer programme which determined whether or not a particular journey came within an exemption to the requirement to hold a GB operator’s licence. In doing so it seems to us that he deliberately shut his eyes to the obvious requirement that combined transport involves the transport of goods between different Member States, whereas the journey on which the Daf was engaged involved the transport of goods between two parts of the same member state and therefore should not have been permitted.
200. John Nolan was given ample opportunity, in cross-examination, (see paragraphs 152-3 and 183), to explain why he had not deliberately or intentionally ignored the warnings and why the postcode interpretation was only raised by Mr Nesbitt for the first time on 15 July 2011. He said that he was ‘of the frame of mind that there was an agreement rightly or wrongly, wrongly maybe’, that he had misread the Molony email and made a mistake. When pressed as to whether he had misread both documents he endeavoured to evade the question to begin with but later said ‘that is me making a big error’. He went on to explain that no one had asked him about postcodes and that he didn’t really inform anyone about them. He accepted that he had not briefed Richard Nolan about the postcode interpretation in advance of the meeting on16 February 2011. In our view John Nolan’s evidence once again serves to reinforce the conclusion that he was deliberately ignoring the fact that there was no final and formal agreement to the use of the postcode interpretation and that he did so because of a desire to enable NT to continue, for as long as possible, to operate as it had done in the past.
201. Finally on this issue we must consider, in relation to combined transport, whether a high degree of fault was involved when John Nolan shut his eyes to the obvious. The only argument advanced by Mr Nesbitt concerning ‘lack of knowledge’ in connection with the Daf was that a high degree of fault was not involved. In our view the relevant documents spelt out, very clearly, that no formal agreement had come into existence and that it would be premature to act as if it had. In addition the documents made it clear that a ‘formally agreed set of jointly approved guidelines’, maps setting out the geographical limits to combined transport, including the postcode interpretation and Q&A guidelines, were all to be provided at a later date. John Nolan was well aware that none had been provided in the period of 8 months between September 2010, (the month in which the documents relied on by John Nolan were published) and May 2011, when the Daf was impounded. When one adds in the extent of John Nolan’s background knowledge we are satisfied that a high degree of fault was involved in each of the ways in which John Nolan shut his eyes to the obvious in relation to combined transport.
202. Next we must consider whether Richard Nolan failed to make such inquiries as an honest and reasonable man would have made. Following the meeting on 16 February 2011 Ms Hicks promised to clarify the position in relation to combined transport. She did so in an email dated 3 March 2011, (see paragraph 162). This quoted the wording of Article 1 of the 1992 Directive and went on to make it clear that the vehicle: “shouldn’t venture outside the 150 km radius at any point in the journey”. Richard Nolan accepted in cross examination that he did not know the details of the system which his brother John had created in order to decide whether or not a particular journey came within the exemption for combined transport. He was pressed to explain why, having specifically requested clarification on the point, he had not forwarded the email of 3 March 2011 to John Nolan as the person in NT in a position to tell whether the system being used was consistent with the clarification given, (see paragraph 165). In our view Richard Nolan also adopted the tactic of trying to change the subject but when Mr Hallsworth persisted he made what we consider to be a revealing comment in the final answer quoted, namely, “The purpose of that meeting was to figure out where are we going on this? How to we get round that, and this was one of the topics, but by no manner of means the only one”. In our view the significance of the comment we have underlined is that it provides a clear indication that NT’s approach, when ‘clarification’ did not suit its purpose was to consider how it could ‘get round’ the clarification rather than how it could comply, while making the smallest possible changes to the way in which it worked. We are satisfied that an honest and reasonable person in Richard Nolan’s position and with his knowledge of the background would have forwarded the email of 3 March to John Nolan and would have asked him whether his system was compatible with this interpretation of the 1992 Directive.
203. Was Richard Nolan’s failure to make such inquiries wilful? There is no suggestion in Richard Nolan’s evidence that he intended to forward the email but forgot, nor is there any other explanation suggesting that his failure was accidental or inadvertent. In our judgment Richard Nolan took a deliberate decision not to forward the email and he did so on the basis that the longer John Nolan was in ignorance of the clarification the longer NT could continue to operate as they had in the past. Until a longer term solution could be devised this was his way of ‘getting round’ the problem of clarification which would obviously restrict NT’s ability to work as it had done in the past.
204. Was Richard Nolan reckless, in the sense of not caring about the consequences, in failing to make inquiries via his brother John? He knew that VOSA had been specifically requested to clarify this point. He knew that NT had been getting prohibitions and GFP’s for cabotage/combined transport offences. He understood that offences occurring some distance from ports had been eliminated, so he says that he assumed that the system was working. In our view a reasonable and honest person in Richard Nolan’s position and with his knowledge would have cared about the consequences of not forwarding the email. Such a person would have known that one consequence of forwarding it would have been to confirm that the system being used complied with the clarification, in which case nothing further would need to be done. But such a person would also have known that forwarding the clarification might have shown that the system which John Nolan had devised was not compatible, in which case NT would have to decide between making changes to their system or arguing for a different interpretation of the 1992 Directive. For these reasons we are satisfied that Richard Nolan was reckless.
205. Lastly we must consider whether there was a high degree of fault in Richard Nolan’s failure to forward the email to his brother John and his failure to ask the obvious questions. In our view Richard Nolan’s failure, for no good reason, to pass on clarification, which NT had specifically requested, coupled with all the other matters to which we have referred, does involve a high degree of fault.
206. Before coming to a conclusion on the claim for the return of the Daf we propose to deal with one final point. In our view the correctness of the postcode interpretation, and the strength with which John Nolan held it, can be tested by considering what he did or did not do about it up to the moment when the Daf was impounded. He says that he set up a computer programme, which determined, by reference to postcodes, whether or not a particular journey came within the definition of combined transport. That appears to be the only evidence that this was done. As we have pointed out John Nolan did not tell others responsible for the management of NT and especially Richard Nolan, what he had done. Reliance on the postcode interpretation was never raised at any stage, either in the form of a hypothetical example or as the actual reason for a particular journey, until it featured in Mr Nesbitt’s skeleton argument in July 2011. We find it difficult to understand, if John Nolan really believed that his interpretation was correct, why he made no attempt to test it by means of a hypothetical example, (added to the very large number which he put forward), and why NT made no attempt to advance it as an explanation until a late stage. We are driven to the conclusion that John Nolan was not as confident that the postcode interpretation was correct as he would like us to believe.
207. It follows, in relation to the Daf, that NT have failed to show that it did not know that the vehicle was being or had been used in contravention of s. 2 of the 1995 Act.
208. Before the impounding of the Mercedes on 20 May 2011 John Nolan became aware of the guidance leaflet issued by the Irish Department of Transport in April 2010, the guidance given by the French Government, also in April 2010 and the guidance issued by the UK government in May 2010. The guidance given by all three countries was that the documents needed to provide the clear evidence of cabotage operations must to be kept in the vehicle so that it was available for inspection at the roadside. At no stage did John Nolan, NT, or those acting for them, put forward guidance from any other Member State which indicated that the relevant documents did not need to be kept in the vehicle. It seems clear, from his email to Ettl Gunter, (see paragraph 145), that by June 2010 John Nolan was aware that VOSA’s interpretation of Article 8.3 would require NT to keep the relevant paperwork in the vehicle. It is also clear that this would cause NT difficulty because of the way in which they were accustomed to operate. In February 2011 John Nolan put forward the French document to Duncan Buchanan, (see paragraph 166) as “one of the better documents” in relation to cabotage. It appears that he had in mind the graphical examples which it gave but that he ignored the clear warning that the documents had to be with the driver. In practice, despite expressing a wish to operate compliantly and asserting that it had been attempting to do so we can see no evidence, in relation to cabotage, that NT put that assertion into practice. Fine words were never converted into effective action because John Nolan simply shut his eyes to the obvious fact that the only interpretations of Article 8.3 of which he was aware required the ‘clear evidence’ to be kept in the vehicle.
209. Did John Nolan deliberately shut his eyes to the obvious or is it possible that he did so accidentally or inadvertently? In our view the advice from the Irish, French and UK authorities is both clear and consistent which makes it improbable that John Nolan accidentally or inadvertently misread it or misunderstood it. When he was cross-examined about the Irish document, (see paragraph 139), John Nolan’s immediate response was to draw attention to a passage on the back page of the document relating to international journeys. Mr Hallsworth tried twice more to focus John Nolan’s attention on the point but each time John Nolan attempted to steer him onto a different point. Then the Traffic Commissioner intervened, again without getting an answer to the specific question. When Mr Hallsworth came back to the original question John Nolan acknowledged that he knew what Mr Hallsworth was getting at but still did not answer the question. The obvious question for us to ask is why did John Nolan react like this? We reject any question of mishearing or misunderstanding what he was being asked because of the number of times that the question was put and the fact that John Nolan acknowledged that he knew what Mr Hallsworth was ‘getting at’. In our view these were deliberate attempts on the part of John Nolan to avoid having to give a direct answer to a highly relevant question. Putting it bluntly we conclude that John Nolan was well aware that the obvious and honest answer, namely that the advice of the Irish Authorities was that the clear evidence required by Article 8.3 had to be in the vehicle, would be damaging to NT’s case whereas any attempt to deny that that was what the Irish had advised, or that he was unaware of what the Irish had advised, would be unbelievable, hence the fact that he sought to avoid a direct answer to the question and attempted to divert the cross-examination onto a different topic. When asked about the similar advice in the French document, (see paragraph 167) John Nolan’s initial reaction was to describe the document as a good graphical illustration of what you could do under the cabotage regulation. Mr Hallsworth spelt out the point in relation to documents being in the vehicle to which John Nolan replied that the French used the expression ‘weigh bill’ but he did not know what it meant.
210. In our view it is appropriate, at this stage, to take a broader view. When one considers John Nolan’s approach to the advice which he considered in relation both to combined transport and also in relation to cabotage a pattern emerges. In our view in each case John Nolan deliberately picked out those parts of the documents which assisted NT to continue to operate with the minimum of changes and he ignored those parts which seemed likely to restrict the way in which NT could operate or which were likely to cause them difficulty and/or expense. We are therefore satisfied that when, in relation to cabotage, as well as combined transport, John Nolan shut his eyes to the obvious he did so deliberately and intentionally.
211. The final question, which we must consider, in relation to the Mercedes and cabotage, is whether, when shutting his eyes to the obvious, John Nolan demonstrated a high degree of fault. It seems to us that it is on this issue that the letter from NT’s Solicitors is relevant.
212. On the one hand John Nolan paid no attention to the advice given by the Irish, French and British authorities and apparently did not learn any lessons from the delay in the return of the vehicle impounded on 13 April 2011, though it was apparent that the reason it was impounded was because the clear evidence required by Article 8.3 was not available in the vehicle. Nor did John Nolan heed the letter of 20 April 2011, (see paragraph 170), which warned that in future vehicles would be impounded if the clear evidence required by Article 8.3 was not produced by the driver. While the reply to that letter, (see paragraph 171), acknowledged VOSA’s position it pointed out that it is the courts rather than VOSA which are the final arbiter of the law. However the letter did not set out any challenge, either reasoned or unreasoned, as to VOSA’s interpretation of Article 8.3.
213. On the other hand NT relies heavily on the letter from its Solicitors which we have quoted in full at paragraph 187. We explained in paragraphs 185 and 186 how this letter came to be produced. We accept that the Traffic Commissioner was endeavouring to help NT in a difficult situation. However, with the benefit of hindsight, we are satisfied that his efforts to assist have, in fact, caused more problems than they have solved. In particular they give rise to a series of questions, which cannot be answered without a breach of privilege. We must not speculate about them and we must not create a situation that appears to put NT under pressure to change its mind on the question of waiving privilege. It seems to us that if a similar situation arises in the future it would, generally, be unwise to follow the course suggested by the Traffic Commissioner. Instead a person in NT’s position must choose between asserting legal professional privilege on the one hand and waiving it on the other, bearing in mind that a waiver of privilege can be total or confined to a particular issue. It is also important to remember that the choice must be a free one and that any form of direct or indirect pressure to waive privilege has to be avoided.
214. It seems to us that in assessing the effect of this letter we must accept that advice was given in the precise terms set out in the letter. We put it in that way because we are acutely conscious of the fact that the whole object of the exercise was to avoid any waiver of privilege beyond the terms of the letter itself. Hence our conclusion that we are bound by the precise words of the letter and that we must not add to or subtract from what the letter says.
215. We agree with the Traffic Commissioner, who said at paragraph 105 of his decision: “Here the letter from solicitors for NT was carefully worded to emphasise that it was provided purely for the purposes of the question posed at the hearing, namely what was NT advised”? In our view it was carefully worded in another important respect, namely that it simply repeated the requirement in Article 8.3 that it was for the ‘haulier’ to produce the clear evidence required by Article 8.3. However the letter was silent on two even more important questions namely, when was the clear evidence required by Article 8.3 to be produced and where was it to be kept? While we must not speculate about what may or may not have been discussed between the Solicitors and NT in relation to these two questions we can, properly, make the point that as at the date of the letter no reasoned case had been put forward by or on behalf of NT to the effect that VOSA’s interpretation was wrong. Such a case was first made at a meeting in June 2011, (see paragraph 182).
216. We must set the advice that it was for the haulier to produce the clear evidence required by article 8.3 against the matters set out in paragraph 211. It seems to us, having done so, that the answer is clear, namely that a high degree of fault was involved when John Nolan shut his eyes to the obvious requirement for the clear evidence required by Article 8.3 to be kept in the vehicle so that it could be produced at a roadside check.
217. Finally it is, in our view, appropriate to test NT’s belief that there was no requirement under Article 8.3 to keep the clear evidence in the vehicle by considering what was done or not done to test that interpretation or to put it forward as a justification of NT’s position. Before 20 May 2011, when the Mercedes was impounded, VOSA had made it crystal clear to NT that their view was that the clear evidence had to be kept in the vehicle. While it was made clear to VOSA that their interpretation of the Regulation was not conclusive, because ultimately it was for the courts to decide, this was only ever stated in general terms. At no stage before the impounding of the Mercedes did anyone on behalf of NT expressly challenge VOSA’s interpretation that there was a requirement to keep the documents in the vehicle, even though the impounding of the vehicle on 13 April provided an excellent opportunity to do so. At no stage before June 2011 did NT advance an interpretation of Article 8.3 which would entitle them to produce the clear evidence at a later stage. In making this point we have very much in mind that on this issue the burden of proof is on NT so that it is not unreasonable to expect them to disclose their hand at an early stage, rather than keeping their cards close to their chest. In our view NT did not react in relation to this point in the way one would expect if, before the impounding of the Mercedes, they believed that the correct interpretation of Article 8.3 permitted them to produce the clear evidence at a later stage. On this point as well we are driven to the conclusion that NT’s belief in the correctness of their interpretation of Article 8.3 was, in fact, much weaker than they would have us believe.
218. It follows, in relation to the Mercedes, that NT have failed to show that it did not know that the vehicle was being or had been used in contravention of s. 2 of the 1995 Act.
INDEPENDENCE – GROUND 9.
219. Ground 9 raises this question: was the Traffic Commissioner wrong to conclude that evidence given by Duncan Buchanan was unchallenged and, if so, do his comments as to his position, if the evidence had been challenged, require the Tribunal to remit the application for re-hearing before a different Traffic Commissioner? The question arises out of a comment made by the Traffic Commissioner at paragraph 124 of his decision.
220. To put the matter in context we quote paragraphs 123 and 124 of the decision in full:-
“123. Duncan Buchanan is Head of Operator Licensing Policy in the DfT. As such he works in the section of DfT which has ‘sponsorship’ responsibilities for traffic commissioners. In recent times it has become a matter of public record that some officials exercising those responsibilities on behalf of the Secretary of State have sought to extend their influence to the point where the independence of traffic commissioners has been put at risk. Traffic commissioners have resisted this interference; civil servants have yet to commit to a shared understanding as to what is required from an independent tribunal.
124. Fortunately Duncan Buchanan’s evidence was not subject to challenge, any traffic commissioner or deputy traffic commissioner might have been in a difficult position had that been so”.
221. None of the parties considered it necessary or appropriate to ask the Traffic Commissioner for further details of his concerns. The matter was raised briefly at a preliminary hearing before the full appeal hearing but in the light of the submissions made at that stage the Tribunal decided that it would not be appropriate to take the initiative in seeking clarification.
222. Mr Nesbitt submitted that the Traffic Commissioner was plainly wrong when he said that the evidence of Mr Buchanan was not subject to challenge. He went on to submit that the only safe course was for the Tribunal to remit the matter for rehearing before a different Traffic Commissioner.
223. On behalf of the Secretary of State Mr Nardell QC conceded that the Traffic Commissioner was wrong when he said that Duncan Buchanan’s evidence was not subject to challenge. Mr Nardell QC went on to make detailed submissions in his skeleton argument, which were supported by his oral submissions. He stressed that the Traffic Commissioner stated that he ‘might’ have been in difficulty if he had had to resolve a challenge to Mr Buchanan’s evidence. He went on to submit that this error had no impact on any other ground of appeal and that if one excluded Mr Buchanan’s evidence altogether ample evidence would remain to support the Traffic Commissioner’s overall conclusion. He submitted that the Tribunal should not remit the matter but should instead exercise its power to reassess the evidence. He supported that submission with a number of reasons. First, insofar as the appeal raises pure questions of law the evidence of Mr Buchanan is immaterial. Second, if NT were to lose on the matters of law the only remaining issues concern the Traffic Commissioner’s approach to the assessment of the facts, as to which Mr Buchanan’s evidence is also immaterial. Third, Mr Buchanan’s evidence was in no sense central to the questions of fact which the Traffic Commissioner had to decide. Fourth, contrary to the view expressed on behalf of NT the Traffic Commissioner’s error did not affect the fairness of the hearing, instead the error meant that he did not assess peripheral evidence as critically as perhaps he should have done.
224. Having re-read the evidence given by Mr Buchanan we agree that the Traffic Commissioner was wrong. However it is important to understand the nature and extent of the challenge. Much of the cross-examination of Mr Buchanan simply sought clarification of his interpretation of documents and events. But some of it challenged his interpretations though it is important to bear in mind in the case of the areas where he was challenged that his interpretations were not contradicted by other evidence. Indeed in relation to one key challenge, in relation to the postcode interpretation, NT made a formal concession that there was, in fact, no such agreement. It is also important to understand the general nature of the challenge because much of the cross-examination was directed to the likely impact of some of the documents on the mind of an Irish haulier. In other words Mr Buchanan was generally being asked to express his opinion about the meaning of documents and the state of mind of a hypothetical Irish haulier.
225. In our view the appropriate course is for us to reassess the evidence bearing in mind the extent of the challenge to what Mr Buchanan said. It seems to us that it would not be to NT’s advantage to ignore Mr Buchanan’s evidence altogether. The reason is that, in our view, the most important piece of evidence given by Mr Buchanan concerned the meaning of Groupage, (see paragraph 55).
226. In effect we have already conducted a reassessment of the evidence in making our assessment of the evidence on the question of ‘lack of knowledge’. Insofar as Mr Buchanan was invited to express a view about the interpretation of the Regulations and Directives his views are irrelevant even though we have agreed with them. Insofar as he was invited to express an opinion as to what a haulier might or might not have understood from the various documents which were available we have not troubled to analyse his views because we considered it more important and appropriate to make our own assessment. Indeed in doing so we had a much fuller picture than he did and we were able to make a specific assessment in relation to NT, whereas he was invited to consider more general questions.
227. We can understand why NT and its advisers would have been troubled by the contents of paragraphs 123 and 124 of the Traffic Commissioner’s decision and especially by the error in stating that Mr Buchanan’s evidence was not challenged. However for the reasons we have given we are satisfied that there is, in fact, nothing in this point which requires more than a reassessment of all the evidence by us.
228. We add, by way of postscript to this point, that it was made very clear on behalf of the Secretary of State that the independence of Traffic Commissioner’s is recognised, valued and considered to be a matter of great importance. The Tribunal shares those views.
229. The concern of the Secretary of State was such that a statement from Patricia Hayes was submitted as part of the Second Respondent’s case. In the event it was not necessary to refer to it during the hearing of the appeal but we feel it is important to quote some passages to provide public reassurance about the position of Traffic Commissioners.
230. Patricia Hayes is a Senior Civil Servant and Director of the Roads Directorate within the Department of Transport (“DfT”). Within the DfT the Operator Licensing and Roadworthiness, (“OLR”) Division has responsibilities in relation to the road transport industry. Patricia Hayes said in paragraph 3:
“The DfT is also the sponsoring Department for Traffic Commissioners, who are independent office-holders. The sponsorship functions are undertaken by the OLR Division. They include the recruitment, retention and removal of Traffic Commissioners, including the Senior Traffic Commissioner and Deputy Traffic Commissioners; the development, issue and periodic review of the Secretary of State’s statutory guidance to the STC and managing the DfT’s overall relationship with the Traffic Commissioners”.
Then in paragraph 7 she said:
“There should not be any question that the role of Traffic Commissioners is to be independent and impartial in carrying out their decision-making function as statutory office-holders under the Crown. The Department has supported the independence of the function of the Traffic Commissioners many times and just as the Traffic Commissioners rightly attach great importance to their independence and integrity, so too does DfT. DfT values the independence of the Traffic Commissioners and, as I will explain, continues to take active steps to maintain and strengthen it”.
The remainder of the statement goes on to provide a reasoned justification for the last sentence of this quotation.
231. We simply seek to reinforce what Patricia Hayes has said in two ways. First, all those in the DfT who have direct or indirect dealings with Traffic Commissioners would be well advised to remember the old saying that: ‘actions speak louder than words’. The strongest verbal support for the independence of Traffic Commissioners can all too easily be damaged or destroyed by actions which, directly or indirectly, intentionally or inadvertently, undermine or give the appearance of undermining the independence of Traffic Commissioners. While the verbal support may come from the highest level it can be damaged or destroyed by action at the lowest level. It is important that everyone, at whatever level in the DfT, who has direct or indirect dealings with or responsibility for Traffic Commissioners is aware of the importance attached to their independence and aware of the ease with which it could be undermined. Second, it is often said that the ‘price of freedom is eternal vigilance’. Eternal vigilance is also needed when it comes to the protection of judicial independence, including that of Traffic Commissioners. We feel sure that the DfT recognises that if it was clearly shown that it had failed to protect the independence of Traffic Commissioners it might run the risk that demands will be made for its responsibility for Traffic Commissioners to be moved to another Department.
PROPORTIONALITY – GROUND 10.
232. Both the applications for the return of the impounded vehicles included an invitation to the Traffic Commissioner to hold that he should read into the impounding regime an element of discretion as to whether or not a vehicle should be returned, even though a claim for return on the grounds set out in the 2001 Regulations had failed. The argument was that in the circumstances of the present case the impounding of each vehicle was disproportionate. In the event this point was not argued before the Traffic Commissioner because Mr Nesbitt correctly recognised that the Traffic Commissioner was bound by decisions of the Transport Tribunal to the effect that there was no such discretion. What Mr Nesbitt was seeking to do, perfectly properly, was to preserve the point so that he could raise it before the Tribunal, which he has now done.
233. The Tribunal attaches considerable importance to consistency in its decisions. There are two good reasons for doing so, first, because it is important to provide consistent guidance to Traffic Commissioners and second, because it is important that the industry generally knows where it stands. However the Tribunal has never considered that it is strictly bound by all its earlier decisions and it has recognised that on rare occasions, where there are compelling reasons for so doing, it can depart from previously well settled principles. It follows that it is open to us to reconsider the question of whether or not it is necessary to read down the impounding regime to include a requirement that it is proportionate.
234. Mr Nesbitt recognised that the Transport Tribunal, (the predecessor of the Upper Tribunal for the purposes of appeals from Traffic Commissioners), considered the question of proportionality in impounding cases in at least two decisions, to which we will now refer.
235. In Appeal 2004/152 Frank Meager, the Transport Tribunal had the benefit of argument from the Appellant but in that appeal neither VOSA nor the Secretary of State were represented. The Transport Tribunal dealt with the matter in this way:
6. We do not agree. While the influence of European Union law has impacted, as have other influences, upon the long established rules of statutory interpretation in English law for far longer than the implementation of the Human Rights Act 1998, s.3 of the Human Rights Act only requires primary and subordinate legislation to be read in a way which is compatible with Convention rights “so far as it is possible to do so”. Although s.3 was the prime remedial measure to “bring rights home” the House of Lords in the very recent case of Ghaidan v Godin-Mendoza,  UKHL 30, has made it clear that any interpretation flowing from s.3 should not “adopt a meaning inconsistent with a fundamental feature of the legislation” and must “go with the grain of the legislation”. Moreover, Lord Steyn added that it is not possible to formulate precise rules for the use of s.3 and that while there is a “strong rebuttable presumption in favour of interpretation consistent with Convention rights”, the well known “proverbial elephant” approach, relying upon recognition of an appropriate case, is to be preferred, so that each case may be evaluated on its merits rather than any detailed rules laid down in advance. Looking at the 1995 Act and the 2001 Regulations in relation to impounding of vehicles without an operator’s licence, we see no way of reading the Regulations in the way suggested by Mr Dawson as this would drive a coach and horses through legislation which is intended to prevent breaches of the law due to failure to obtain operator’s licences by the road haulage industry. Moreover we do not agree that the penalty is disproportionate (as the Appellant receives the balance of the sale proceeds of an impounded vehicle after costs of its sale) nor that the “punishment does not fit the crime” since loss of the actual vehicle which was not licensed, and of a proportion of its sale value, does not seem an entirely inappropriate penalty for failing to license in the first place, a failing which was reaching epidemic proportions before the introduction of impounding”.
236. In Appeal 2007/172 Romantiek Transport BVBA and others, the Tribunal was again invited to consider the question of reading down the impounding regime to include an element of discretion as to the return of an impounded vehicle. In that case one of the Appellants was represented by Mr David Phillips QC and Mr Nesbitt, while others appeared in person. Mr Hallsworth appeared for VOSA, so this appeal was fully argued on both sides. There are three reasons for quoting a paragraph from the Transport Tribunal’s decision on this appeal. First, it dealt with the impounding of vehicles owned and operated by foreign hauliers. Second, the Tribunal set out a number of factors relevant to the question of whether or not the impounding regime achieves a ‘fair balance’. Third, the decision in Romantiek was appealed to the Court of Appeal on a number of grounds but the issue of proportionality was not one of them. We quote paragraph 150 of the decision in full:
“Turning to the human rights arguments, we agree that the impounding provisions do assume that a criminal offence has been committed and that in the circumstances, any reverse burden must satisfy the acceptability and reasonableness tests. In this present case, the purpose of the impounding procedures is to stop illegal operations which are likely to distort competition and give rise to road safety implications. It is for VOSA to satisfy the Traffic Commissioner that there were grounds for believing that s.2 of the 1995 Act was being breached. It is then for the operator to produce evidence in support of one or more of the grounds set out in Regulation 10(4) of the 2001 Regulations. We are satisfied that the burden imposed upon operators is both acceptable and reasonable in the circumstances. We repeat that the type of documentation that the operator would need to produce is or should be easy to compile from existing operational records and we note that the CIC criteria for assessing whether operations are “temporary” sets a time limit tolerance of one to two months per year. If an operator is undertaking lawful cabotage, they should have little difficulty showing that their operations fall within this time limit tolerance.
236. Mr Nesbitt invited us to reconsider these decisions, first because the European Convention is a ‘living instrument’ and second, because he submitted that a number of more recent decisions, in other jurisdictions, indicate that, as a matter of principle, Traffic Commissioners ought to be able to take proportionality into account. He expressed particular concern about the position of foreign hauliers because, he submitted, they run the risk of having vehicles impounded for very minor breaches of the new rules. We will deal separately with his submissions and those of others about a very recent decision.
237. Mr Hallsworth effectively adopted the submissions made by Mr Nardell QC on behalf of the Secretary of State. However he stressed first, that vehicles are only impounded for good reason and as a last resort after a warning letter. Second that the owner of an impounded vehicle has the right to make representations to VOSA that the vehicle should be returned. Third, that if those representations are unsuccessful the owner has the right to apply to a Traffic Commissioner and to require an oral hearing and fourth, that the owner can, if necessary, appeal, as of right, to the Upper Tribunal.
238. Mr Nardell QC submitted that the critical question was whether the impounding regime struck a fair balance between the private rights of the vehicle owner and the general public interest in the proper enforcement of the regulatory system for operator’s licensing. He submitted that when the importance of the regulatory regime is balanced against the rights built into the impounding regime the answer is that a fair balance has been struck and that there is no need to add a requirement that impounding must be proportional. He went on to submit that the impounding regime was carefully crafted by Parliament and in that respect is in marked contrast to other legislation in respect of which the courts have felt the need to add a requirement for proportionality. He submitted that the Tribunal should be cautious about interfering with the careful balance which Parliament has struck.
239. In our view the appropriate starting point from which to begin any consideration of the law in relation to proportionality is Article 1 of the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms, (“The Protocol”). This provides:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties”.
Crucial guidance concerning the way in which the Protocol is to be applied is to be found in the decision in the case of Air Canada v UK (1995) 20 EHRR 150, where at paragraph 36 the European Court of Human Rights expressed the principle as follows:
“According to the Court’s well-established case law, the second paragraph of Article 1 must be construed in the light of the principle laid down in the Article’s first sentence. Consequently, any interference must achieve a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights. The concern is to achieve this balance is reflected in the structure of Article 1 as whole, including the second paragraph: there must therefore be a reasonable relationship of proportionality between the means employed and the aim pursued.”
240. It is this decision which provides the main foundation for Mr Nardell QC’s submission that the Tribunal should focus on the impounding regime and whether or not it achieves a fair balance. He submitted that the other authorities relied on by Mr Nesbitt are simply examples of striking a fair balance between the rights of the individual and the general public interest arising out of the regime in question, the purpose of which will not be the same as the purpose of the impounding regime.
241. Before deciding whether or not Mr Nardell QC is correct we propose to consider the facts in Air Canada v UK before turning to some of the other decisions relied on. In Air Canada v UK cannabis weighing 331 kilograms and worth about £800,000, was found on board an aircraft worth over £60 million. The airway bill number was false, the consignment did not appear on the appellant’s computer and there was no documentation. The airline had been warned, repeatedly that its security, especially in relation to drugs, was lax. The aircraft was seized by the Commissioners of Customs and Excise and was liable to forfeiture under the relevant legislation. However on the day that the aircraft was seized it was returned to the appellants in return for a bankers’ draft in the sum of £50,000. The complaint before the Court of Human Rights was that the requirement to pay £50,000 to secure the return of the aircraft was an unjustified interference in the peaceful enjoyment of the appellant’s possessions, contrary to the Protocol. The Court held that the requirement to pay £50,000 for the return of the aircraft was not disproportionate to the aim of the Government, namely the prevention of the importation of prohibited drugs into the UK.
242. In Lindsay v Commissioners of Customs & Excise  EWCA Civ 267 the Respondent’s car was seized by an Officer of Customs and Excise on the ground that the Respondent was carrying in it a substantial quantity of cigarettes and tobacco on which he should have paid duty. The Respondent challenged the right of the Commissioners to forfeit his car. It would appear that he accepted, as a result of s. 49 of the Customs and Excise Management Act 1979, (“CEMA”), that the Commissioners were entitled to forfeit the cigarettes and tobacco. The Commissioners contended that as a result of s. 141 of CEMA once the cigarettes and tobacco were liable to forfeiture any vehicle used for the carriage of the goods liable to forfeiture was also liable to forfeiture, though subject to the right of the Commissioners, if they saw fit, to restore it, on such conditions as they thought proper. The Respondent’s challenge to the Commissioners right to forfeit the car meant that the Commissioners were required to take condemnation proceedings. The Respondent withdrew his challenge to these proceedings and instead he challenged the way in which the Commissioners had exercised their powers. In due course the challenge came before the VAT & Duties Tribunal who ordered that the car should be restored to the Respondent or that compensation should be paid to him. The Commissioners appealed that decision to the Court of Appeal. In giving the principal judgment Lord Phillips MR said, at paragraph 52:-
“The Commissioners’ policy involves the deprivation of people’s possessions. Under Article 1 of the First protocol to the Convention such deprivation will only be justified if it is in the public interest. More specifically, the deprivation can be justified if it is “to secure the payment of taxes or other contributions or penalties”. The action taken must, however, strike a fair balance between the rights of the individual and the public interest. There must be a reasonable relationship of proportionality between the means employed and the aim pursued (Sporrong & Lonroth v Sweden (1982) 5 EHRR 35 at paragraph 61; Air Canada cited above). I would accept Mr Baker’s submission that one must consider the individual case to ensure that the penalty imposed is fair. However strong the public interest, it cannot justify subjecting an individual to an interference with his fundamental rights that is unconscionable.”
The underlining is ours, in order to stress that the balance must be struck by reference to the facts of the individual case and in relation to the aims of the regime in question. As a result, in our view, decisions in other cases, especially those arising out of different regimes, are of limited, if any assistance.
243. Customs and Excise Commissioners v Newbury  1 WLR 2131 is another cases involving the forfeiture of a vehicle used to import dutiable goods. The Crown court held that despite legislation, which appeared to make ‘condemnation’ mandatory in forfeiture proceedings, there was, nevertheless, a residual discretion to refuse to make that order if it would be disproportionate to do so in the circumstances of the case before the court. On appeal to the Divisional Court it was held that the Crown Court did have a discretion to decide whether or not forfeiture was disproportionate. Mr Nesbitt submits that the position in Newbury is closely analogous to that in the present case and that the decision in Newbury shows that courts should, when appropriate, read down legislation in mandatory terms to provide for a measure of discretion to ensure that decisions which interfere with the peaceful enjoyment of possessions are proportionate to the interests which the State is seeking to protect or advance.
244. Finally Mr Nesbitt relies on the very recent decision of the Divisional Court in the case of O’Leary International Ltd v the Chief Constable of North Wales Police and Crown Prosecution Service  EWHC 1516 (Admin) in which the judgment was delivered on 31 May 2012. The Appellants in that case were a haulage company incorporated in the Republic of Ireland, which carried loads from the continent of Europe to Ireland through North Wales. On four occasions drivers of their vehicles were stopped by North Wales Police. Three of the drivers produced what proved to be false ‘letters of attestation’, purporting to show that they had recently been on holiday. The purpose of these letters was to explain, if the drivers were stopped, why they were unable to produce tachograph charts for the previous 28 days and to cover up the fact that they had been driving in excess of permitted hours. The fourth driver was using a duplicate tachograph chart for broadly similar purposes. The drivers pleaded guilty and blamed the Appellants. In each case the Magistrates court made an order for the forfeiture of the tractor unit and the trailer under s.143 of the Powers of Criminal Courts (Sentencing) Act 2000, (“the Sentencing Act”). In each case the Appellants, (who were not parties to the criminal proceedings) made an application for the delivery up of the vehicles, to them, by the Chief Constable, under s.1(1) of the Police Property Act 1897, (“the 1897 Act”).
245. In order to assess the submissions made in relation to this decision we must set out the powers relied on in that appeal, starting with s. 143 of the Sentencing Act with is in these terms:-
“(1) Where a person is convicted of an offence and the court by or before which he is convicted is satisfied that any property which has been lawfully seized from him, or which was in his possession or under his control at the time when he was apprehended for the offence or when a summons in respect of it was issued—
(a) has been used for the purpose of committing, or facilitating the commission of, any offence, or
(b) was intended by him to be used for that purpose,
the court may (subject to subsection (5) below) make an order under this section in respect of that property.
(2) Where a person is convicted of an offence and the offence, or an offence which the court has taken into consideration in determining his sentence, consists of unlawful possession of property which—
(a) has been lawfully seized from him, or
(b) was in his possession or under his control at the time when he was apprehended for the offence of which he has been convicted or when a summons in respect of that offence was issued,
the court may (subject to subsection (5) below) make an order under this section in respect of that property.
(3) An order under this section shall operate to deprive the offender of his rights, if any, in the property to which it relates, and the property shall (if not already in their possession) be taken into the possession of the police.
(4) Any power conferred on a court by subsection (1) or (2) above may be exercised—
(a) whether or not the court also deals with the offender in any other way in respect of the offence of which he has been convicted; and
(b) without regard to any restrictions on forfeiture in any enactment contained in an Act passed before 29th July 1988.
(5) In considering whether to make an order under this section in respect of any property, a court shall have regard—
(a) to the value of the property; and
(b) to the likely financial and other effects on the offender of the making of the order (taken together with any other order that the court contemplates making).
We draw attention to a number of points. First, the power to make an order under s.143 arises after conviction and provided that the court is satisfied that the grounds set out in s.143(1) or (2) have been made out. Second, the power is exercised by a court before which the owner of the property has no right to be heard, unless that person is also a defendant in the proceedings, (which was not the case in O’Leary). Third, the making of an order under s. 143(1) or (2) is stated to be subject to subsection (5). That subsection requires the Court to take into account, before making an order, the value of the property and the likely financial and other effects on the offender of the making of the order. We have underlined ‘offender’ to stress that this consideration is not taken into account in the case of an owner who is not also an offender. Fourth, s.143(3) expressly provides (i) that an order under the section deprives the offender of his rights in the property, if any and (ii) that if the property is not already in the possession of the Police it is to be taken into their possession. We have underlined ‘offender’ in each case because of the contrast between the application of these provisions to offenders and those owners who are not also offenders subject to these provisions.
246. Section1(1) of the 1897 Act provides as follows:-
“Where any property has come into the possession of the police in connexion with their investigation of a suspected offence a court of summary jurisdiction may, on application, either by an officer of police or by a claimant of the property, make an order for the delivery of the property to the person appearing to the magistrate or court to be the owner thereof, or, if the owner cannot be ascertained, make such order with respect to the property as to the magistrate or court may seem meet.”
247. By virtue of s. 144 of the Sentencing Act the 1897 Act is applied to property which is in the possession of the Police by virtue of s. 143. However s.144 goes on to modify the 1897 Act. In particular s.144(1)(b) provides that:-
“(b) no such application shall succeed unless the claimant satisfies the court either—
(i) that he had not consented to the offender having possession of the property; or
(ii) where an order is made under subsection (1) of section 143 above, that he did not know, and had no reason to suspect, that the property was likely to be used for the purpose mentioned in that subsection”.
248. The principal conclusion reached by the Divisional Court in O’Leary was that the owners of the vehicles had not been deprived either of their property in the vehicles or of their right to take separate civil proceedings, for conversion, in order to secure the return of the vehicles. However the court went on to consider whether, assuming that their principal conclusion was be held to be wrong, the provisions of the Sentencing Act and the 1897 Act achieved a fair balance. At paragraph 36 the court said this:-
“In our view the position is clear. On the assumptions we have made, s.144 would have provided for a situation where goods might not be returned, even if the owner were merely negligent. In the light of the decisions in Air Canada and Lindsay, we do not see how it would be proportionate for a court to have no power to consider the value of the property, the degree of culpability of the owner and the financial effect on the owner of the deprivation of his goods. If, as is clear from s.143(5), in considering whether an order for deprivation should be made against an offender, a court is entitled to take into account the value of the goods and the financial effect on the offender it would, on the assumption we have made, not have been logical where the owner was not the offender, that the court could not take those matters into account but could do so if he was the owner [we believe that this should read ‘offender’]. In our judgment, on the assumption that we have made in relation to this issue, unless s.144 were read down in the manner suggested, the rights of the owner of the goods would be violated”.
249. The Tribunal offered all three advocates the opportunity to make further written submissions, once they had had the opportunity to consider the judgment in the O’Leary case. We are grateful to all three advocates who responded promptly and helpfully to this request.
250. Mr Nesbitt submitted that it is significant that in the case of O’Leary a ‘lack of knowledge’ ground for the return of the vehicle, in terms similar to those of regulation 10(4)(c) of the 2001 Regulations, (see paragraph 86), was relied on by the Appellants. He submitted that the result of the decision in O’Leary is that, as a matter of principle, the Tribunal is required to conclude that the impounding regime should be ‘read down’ to include an element of discretion in order to ensure that depriving the operator of an impounded vehicle is proportionate. Mr Nesbitt pointed to what he submits are very striking parallels between the two legislative regimes. He also pointed to the fact that unlike the powers under the Sentencing Act there is no need, in order to trigger the right to impound, to show that a criminal offence has, actually, been committed.
251. On behalf of VOSA Mr Hallsworth submitted that the O’Leary case is of limited assistance for the purpose of deciding the present case because it relates to a totally different regime with different objectives. He submitted that the requirement is to achieve a fair balance between the interests of the individual and the interests which the State is seeking to protect through the regime in question. Mr Hallsworth went on to make the point that, unlike all or most of the regimes which feature in the other cases to which reference has been made, the impounding regime was brought into effect after the Human Rights Act 1998 had come into force. We will return, in due course, to the submissions which Mr Hallsworth made in relation to the background to the creation of the impounding regime.
252. On behalf of the Secretary of State Mr Nardell QC submitted that, strictly speaking the views of the Divisional Court in relation to proportionality were unnecessary in order to explain the decision which the court reached. Nevertheless he recognised that they are carefully considered views, in a reserved judgment, which provide limited support for including an element of discretion where the court or tribunal, which is invited to order the return of the property, would otherwise be unable to take into account considerations such as, the value of the property, the degree of culpability of the owner, and the financial consequences of not returning the goods. At the end of the day, however, he submitted that most of the authorities are simply examples of putting into practice the principles set out in Air Canada and Lindsay.
253. In our judgment the decisions in Air Canada and Lindsay establish the two principles which we must apply in this case. Those principles are:- (i) that in order to protect an owner’s rights under the Protocol there must be a fair balance between the right of an owner to the peaceful enjoyment of his possessions and the interests which the State is seeking to protect or achieve through the regime in question and (ii) that a fair balance can only be struck by having regard to what the regime in question is seeking to protect or achieve, the way in which it seeks to do that and the extent to which the owner can put forward relevant matters in the course of any proceedings for the return of the property.
254. In our view the starting point for deciding whether or not the impounding regime strikes a fair balance ought to be an explanation of the reason why the impounding regime was introduced and its importance to enforcing the regulatory regime for HGV’s (and now, in addition, Public Service Vehicles). All operators holding GB operator’s licences come within the jurisdiction of Traffic Commissioners. Under s. 26 of the 1995 Act Traffic Commissioners have a discretionary power to ‘revoke, curtail or suspend’ an operator’s licence on a number of grounds. Those grounds include, for example, the fact that the operator’s vehicles have incurred safety related prohibition notices or that the operator has breached any undertaking recorded on the licence. A standard undertaking is that the operator will make proper arrangements so that the rules on driver’s hours and tachographs are observed and proper records are kept, which are to be made available on request. In more serious cases a Traffic Commissioner is required, by s. 27 of the 1995 Act, to revoke an operator’s licence if satisfied that the operator no longer meets the requirement to be of good repute or of appropriate financial standing or professionally competent. In other words operators within the system who operate in a way which puts public safety or fair competition at risk can be put out of business by the revocation of their licence.
255. By contrast, until the impounding regime was introduced, those whose licences had been revoked or those who had simply not bothered to apply for a licence or foreign operators, operating outside the exemptions we have described, risked a maximum fine of £5,000 for use of a vehicle in contravention of s. 2 of the 1995 Act, (see paragraph 7). In practice fines were frequently set at a level well below the maximum. The result was that many of those who were operating outside the system simply treated the fines as a form of business expense and continued to operate unlawfully, competing unfairly with those who were compliant and putting public safety at risk.
256. Mr Hallsworth annexed two documents to his most recent submission, (we suggest that for future reference both are filed in the Authorities Bundle at tab 7, which contains other material relevant to impounding). The first of these documents is the Regulatory Impact Assessment, prepared as part of the process during which the impounding regime was created. The second is the Explanatory Memorandum, which was put forward when the 2001 Regulations were amended by the 2009 Regulations and Public Service Vehicles became liable to impounding for the first time. Since this was the first time these documents featured in the case we gave Mr Nesbitt and Mr Nardell QC the opportunity to make further submissions before we decided what weight to attach to them. Mr Nardell QC indicated that there was no need for the Secretary of State to make further submissions
257. Mr Nesbitt provided us with a further skeleton argument dated 26 June 2012. He submitted that it was for us, and not a Minister or a Department, to decide how these provisions are to be construed. He went on to indicate that he was not submitting that the impounding regime is incompatible with the Protocol merely that it is possible to read it and that it should be read in a way which renders it compatible. Next he submitted that the thrust of the documents is that the problem lies with domestic rather than foreign operators operating outside the system. Finally he submitted that any assessment of the fairness of the impounding regime goes deeper than the superficial assessment in the second of the passages quoted at paragraph 259 below and that it can only be achieved by the inclusion of a power to return vehicles where it would be disproportionate not to do so.
258. We agree that it is our responsibility to construe these provisions and that extra-judicial comments as to what they mean cannot bind us. We cannot accept that the thrust of the documents is solely directed to domestic hauliers. In our view the impounding regime is directed at those who operate, unlawfully, outside the operator’s licensing regime. The purpose of allowing exemptions for foreign hauliers, on a temporary basis, is to achieve a balance between the interests of the haulier, in operating efficiently, and the interests of the public in the safe operation of HGVs. In our view foreign hauliers, who operate outside the permitted exemptions, increase the risk to the public, either because their vehicles are not properly maintained or because they are lax in their observance of drivers’ hours and tachograph regulations or for both and possibly other reasons. In this respect the figures relating to NT, at paragraph 156 above are instructive. We agree with Mr Nesbitt that we must make our own assessment of the overall fairness of the balance struck by the impounding regime. In this respect the quotations from the two documents, which we have set out in the next two paragraphs, provide useful background information about the nature of the problem with which the regime is intended to deal. We would simply add two points. First, the comments about illegal operators in the second half of the second quotation in paragraph 259 apply with just as much force to foreign hauliers as they do to domestic hauliers. Second, one only has to consider the number of GFPs incurred by NT, to see that the need for the deterrent effect of the impounding regime is just as important in relation to foreign hauliers as it is in relation to domestic hauliers.
259. In the Regulatory Impact Assessment the following appears under the heading ‘Risk Assessment’:-
“A roadside survey of HGVs carried out by the Vehicle Inspectorate (VI) in October 1995 found that 1.9% of the vehicles stopped were found to be operating illegally. As a proportion of the present HGV fleet of about 420,000 vehicles, this represents some 8,000 HGV’s. The VI survey also found that illegally operated HGVs are twice as likely to have dangerous roadworthiness defects as legally operated HGVs. Illegally operated HGVs are therefore a significant danger to the safety of other road users. HGV’s have a lower involvement rate in accidents per 100 million vehicle kilometres travelled than cars (46 compared to 90) reflecting their greater use of motorways and lower use of urban roads. However, their fatality rate in these accidents is twice that of cars because they cause much more damage to the pedestrians or vehicles with which they collide. When involved in accidents with pedestrians, HGVs are up to six times more likely to kill a pedestrian than cars”.
A little later the following appears under the heading ‘Issues of equity and fairness’:-
“The detention of HGVs would deprive a person of his private property and means of livelihood and would be justified if it were in the public interest. But by ignoring the operator licensing system, illegal operators cut costs and undermine fair competition amongst the law-abiding majority of the road haulage industry. Illegal operators also avoid the vetting and review of their operating centres by Traffic Commissioners, which in turn removes the statutory and democratic rights of local authorities and local residents to object or make representations against an operator’s licence being granted on grounds of road safety, local suitability or the environment. There has therefore been considerable pressure for some time, particularly by road safety groups and road hauliers, for action to be taken against illegal operators”.
260. The second document put forward by Mr Hallsworth is the ‘Explanatory Memorandum’, which was put forward when the 2001 Regulations were amended by the 2009 Regulations and, at the same time, an impounding regime was introduced in relation to Public Service Vehicles. Under the heading ‘Successful Use of Impounding with HGVs’ in a document described as the ‘Evidence Base’ the following appears at paragraphs 11 and 12:-
“In 2002 a scheme for the seizure and impounding of illegally operated HGVs was established” (under the 1995 Act) … . Since the implementation of this scheme the proportion of HGVs used on GB roads without the appropriate Operator Licence has dropped from 1.7%, (in 2001), to 0.6%, (in 2006), as measured by the VOSA roadside compliance survey. At the same time the number of applications for HGV Operator Licences increased.
This seems to show that the HGV impounding scheme has been an effective deterrent to illegal operation. As was anticipated when the scheme was planned, the volume of vehicles impounded has been low (fewer than 250 per year) – but significant benefit has been achieved through the deterrent effect. Results from the HGV scheme have also shown that the vehicles used by those operators who choose persistently to remain outside the Operator Licensing system (and hence are subject to being impounded) tend to be vehicles which are not maintained to safe standards – therefore there is a wider safety benefit from this enforcement activity”.
261. In our view these documents serve to reinforce the common sense position that the State has a strong and legitimate interest, on behalf of the public generally, in ensuring that HGVs are properly maintained and safely operated by operators who comply with the operator’s licensing system and compete fairly with other hauliers. The quotations we have set out show the benefit achieved by the deterrent effect of the targeted impounding of a relatively small number of vehicles. In our view the impounding regime makes an important contribution to the enforcement of the operator’s licensing regime and to road safety generally.
262. It is convenient, at this stage, to return to the point made by Mr Nardell QC that the impounding regime represents a well-balanced and carefully crafted scheme set out by Parliament itself. The bald statement, at paragraph 81 above, as to the way in which the 2000 Act amended the 1995 Act, does not do justice to the attention which Parliament gave to the impounding regime. Parliament did not merely provide for a wide and general discretion to enable the Secretary of State to make regulations to bring the impounding regime into effect. Instead it gave the matter detailed consideration. Schedule 1A to the 2000 Act, which was added to the 1995 Act by s.262(2) of the 2000 Act, started life as Schedule 30 to the 2000 Act. Although framed in discretionary terms, “regulations may provide …”, it nevertheless set out a detailed framework, which was carefully followed when the 2001 Regulations were drafted. In particular paragraph 9(4) of Schedule 1A, as set out in Schedule 30, provides that the grounds on which the return of a vehicle can be ordered “may include the following grounds”. The three grounds set out in paragraph 9(4) were included, word for word, in the 2001 Regulations. They do not, of course, include any general discretion to return a vehicle on any other ground. The amendment of the 2001 Regulations by the 2009 Regulations was effected by using the regulation making powers granted by Schedule 1A to the 2000 Act but subject, of course, to Parliamentary approval before the amended regulations came into force. The amendments benefitted owners in two ways. First, a new Regulation 4 was substituted for the old one, which provided for a requirement that a detained vehicle should be returned, without the need for an application to a Traffic Commissioner, if the authorised person was satisfied that one of the grounds on which a Traffic Commissioner could order the return of the vehicle was made out. In other words, in a clear case, it enabled the owner to secure the return of a vehicle more quickly. Second, a fourth ground for return was added to the three already set out in Regulation 10(4). While this is not, in our view, a decisive point it is an important point which needs to be borne in mind in making an overall assessment of the balance achieved by the impounding regime.
263. We have already described the impounding regime, and the consequences which follow when a vehicle is impounded, in paragraphs 81-90 above. In the course of the hearing we were provided with a document setting out VOSA’a approach when deciding whether a vehicle should be impounded, (it is Section 48 from a larger document, with the heading ‘Deciding who to Impound’, it should have been filed at tab 7 in the authorities bundle). In our view this provides important background material in assessing whether or not there is any need to give Traffic Commissioners an element of discretion over the return of impounded vehicles. The first step in the process which may lead to a decision to impound is for a VOSA area, which considers that an operator’s vehicle ought to be impounded, to submit a case to a local meeting. Seven criteria are given which justify the submission of a case. NT probably met two of them. They would have come within (d) as an operator using a foreign registered vehicle, not on a licence in the UK, engaged in a UK operation not within the scope of cabotage and they probably came within (e) as an operator who had received numerous recorded warnings regarding illegal operation but had chosen to ignore the advice. The case papers to be submitted to the meeting must include, amongst other things, the enforcement history. If there is agreement at the meeting that the operator should be targeted for impounding there is then a requirement that further evidence should be gathered under a number of headings. The next step, following a decision to target an operator for impounding, is that VOSA must send a letter to all parties with an interest in the vehicle or vehicles in question. An example, from the present case, is the letter of 28 January 2011, quoted at paragraph 160. In other words if VOSA’s approach is followed there is no question of a vehicle being impounded ‘out of the blue’ because the operator and owner, (if different and ascertained) will have been warned and given 14 days in which to change their ways. It is only when this letter is sent that a ‘marker’ is put on the roadside system so that if the vehicle is stopped the person stopping it knows that impounding should be considered. The marker also ensures, if a vehicle is stopped before the period specified in the letter has expired, that the stopping officer knows that while prosecution may be appropriate impounding is premature. If those receiving a letter, such as that of 28 January 2011, satisfy the appropriate VOSA officer that they have taken steps which will result in the vehicle ceasing to be used in contravention of s. 2 of the 1995 Act then the marker can be removed from the system. In other words if this procedure is followed it will only be those operators who have chosen to ignore the written warning that they are operating in contravention of s. 2 whose vehicles are at risk of being impounded.
264. In our view if the impounding regime is properly applied it provides significant protection to any operator who is not persistently and deliberately operating in contravention of s. 2 of the 1995 Act. We believe that it is important, when assessing whether or not a fair balance has been struck, to take into account how the regime operates.
265. We have considered what the position would be if VOSA failed to follow their policy, (described at paragraph 259), and did impound a vehicle at random. We have explained at paragraph 90 that it is for VOSA to show, on the balance of probability, that they had the right to detain the vehicle. Without expressing any final view on the point it seems to us that it would be open to an owner to put VOSA to proof that they had the right to impound and, in doing so, to raise the question of whether or not VOSA had followed their policy. Even if this point failed, in the absence of a warning letter, VOSA would be very well aware that they might find it difficult to resist a claim for the return of the vehicle on, for example, the ‘lack of knowledge’ ground. It follows, in our view, that it is very much in VOSA’s interests to ensure that their policy is followed.
266. Next it is open to an owner, whose vehicle has been impounded, to seek to persuade VOSA to return it under regulation 4 of the 2001 Regulations as amended, (see paragraph 83). This is an informal procedure, which does not require a hearing. It was probably the basis on which the vehicle impounded on 13 April 2011 was returned to NT. Operators who believe that they have a good case for the return of a vehicle would be well-advised to seek to persuade VOSA of its merits, at this stage, in order to secure the early return of the vehicle.
267. One of the matters advanced by Mr Nesbitt to justify the incorporation of an element of discretion into the impounding regime was the possibility that a vehicle could be impounded because of a minor defect or series of defects in the paperwork. In our view there is no need for this situation to be dealt with as a matter of discretion because it can be raised in the course of an impounding hearing. If, for example, the clear evidence required by Article 8.3 is provided by the driver, at the roadside, and it presents a picture of a vehicle which has been conducting lawful cabotage operations, then it seems to us that VOSA would not ‘have reason to believe’ that the vehicle was being or had been used in contravention of s. 2 of the 1995 Act simply because some of the ‘Is’ on the documents were not dotted or ‘Ts’ were not crossed. In that situation the owner would be entitled to explore the position when the relevant evidence was taken and would also be entitled to request the Traffic Commissioner to rule on the point, which could then, if necessary be appealed. A ruling that VOSA had failed to establish a right to impound the vehicle would result in the return of the vehicle to the owner.
268. Once VOSA have established that they did have the right to impound the vehicle it is then open to the owner to apply for the return of the vehicle on any one or more of the four grounds set out in paragraph 10(4) of the 2001 Regulations as amended, (see paragraph 86). It is true that the burden of establishing each of these grounds falls on the owner but this is hardly surprising when the matters giving rise to these grounds are peculiarly within the owner’s own knowledge. In our view these grounds enable an owner who was, for example, merely negligent or was unaware of the use in contravention of s. 2 of the 1995 Act to obtain the return of their property. In other words it reinforces the position that impounding is directed at a small number of operators who knowingly and persistently operate in contravention of s. 2 of the 1995 Act and are undeterred from so doing by the other means available to the enforcement authorities.
269. While the 2001 Regulations, as amended, do not, expressly, require that the value of the vehicle is taken into account on any decision as to whether or not a vehicle is to be returned, they do ensure that it is taken into account indirectly. This is because of the provision in regulation 18, (see paragraph 88), that requires any surplus, after payment of the charges for the detention and storage of the vehicle to be paid to the owner. The greater the value of the vehicle and the more quickly the matter is resolved the better the chance that there will be something left for the owner. Indeed owners who recognise that the prospects of success on an application for the return of the vehicle are poor would be well-advised to make a timely concession, in order to keep the charges to a minimum.
270. Taking all these factors into account we are quite satisfied that, properly applied, the impounding regime strikes a fair balance between the rights of the individual vehicle owner and the interests of the State, on behalf of the public generally, in securing compliance with the system of operator’s licencing in order to promote road safety and fair competition. For these reasons we can see no need to read down the provisions of the impounding regime in order to include an element of discretion. Indeed we find it difficult to envisage any circumstances in which after the failure of a claim for the return of a vehicle it would, nevertheless, be appropriate to exercise a discretion to return the vehicle.
271. In case we are wrong in refusing to include an element of discretion in the operation of the impounding regime we turn to the factors which would have influenced us in exercising such a discretion. Each of the impounded vehicles is a business asset, the loss of which is likely to have some impact on NT’s business. The Daf was valued by Richard Nolan at about €51,000 and the Mercedes was valued by him at about €18,000.
272. In the case of the Daf we have explained in paragraphs 197 to 207 why, in our view both John Nolan and Richard Nolan were guilty of a high degree of fault in one case for ignoring clear warnings that a postcode interpretation had not been finally agreed and in the other for failing to pass on an important email, with a question as to whether the system used by NT complied with advice which it contained. In our view NT were well aware that the Daf was persistently used in a way which contravened s. 2 of the 1995 Act as a result of failure to operate within any of the exemptions to the requirement to hold a GB operator’s licence. In other words, on the findings we have made, the claim for the return of the Daf was inherently dishonest. We can see no possible basis on which discretion could be exercised to return this vehicle, without, at the same time, reducing the deterrent effect of the impounding regime, which has proved so beneficial.
273. In the case of the Mercedes the failure to keep the clear evidence required by Article 8.3 in the vehicle so that it was available for production if the vehicle was stopped cannot, by any stretch of the imagination, be considered a minor breach. We have explained in paragraphs 208-218, why, in our view John Nolan was guilty of a high degree of fault in failing to heed the unanimous advice of the Irish, French and British authorities as to the timing of the production of the clear evidence required by Article 8.3. Although well aware of the advice that the documents should be kept in the vehicle John Nolan never sought to test an alternative interpretation until after the Mercedes had been impounded. Instead NT simply carried on regardless of any view which conflicted with the way in which those in charge wanted to operate. We made our own assessment of the documents belatedly produced as the clear evidence that the Mercedes was conducting cabotage operations. For the reasons we have given at paragraph 105 we take the view that these documents do not satisfy the requirements of Article 8.3 and that this is not a case in which some minor omissions can be overlooked because the overall picture demonstrates that the vehicle was involved in cabotage operations. In our view no such picture emerges. In the case of the Mercedes as well on the findings we have made the claim for return was also inherently dishonest. Once again we can see no possible basis on which discretion could be exercised to return this vehicle, without, at the same time, reducing the deterrent effect of the impounding regime, which has proved so beneficial.
274. We are satisfied that VOSA was entitled to impound each of the vehicles the subject of this appeal. We are also satisfied that NT has failed to show that either of the vehicles was operating lawfully within a relevant exemption, (combined transport in the case of the Daf and cabotage in the case of the Mercedes). We are satisfied that NT has failed to show, in the case of either vehicle, that they did not know of the use in contravention of s. 2 of the 1995 Act. Finally we are satisfied that the impounding regime strikes a fair balance between the rights of the vehicle owner and the interests of the State.
275. For these reasons the appeal in relation to each of the vehicles is dismissed.
276. We wish to acknowledge the extent of the assistance we have received from all the advocates and those working behind them. We are grateful for all the skeleton arguments which they have produced and for their efforts to do so within the times allowed. In particular we must thank Mr Hallsworth for agreeing to take on the preparation of a core bundle, at short notice, when NT’s Solicitors found that they were unable to complete the task. Although the result came too late to make much impact on preparation for the appeal we believe that it reduced the time taken to hear the appeal and we have no doubt that it significantly assisted the drafting of this decision.
277. Finally we should explain why we have decided to not to follow our usual practice whereby decisions are signed by the judicial member of the Tribunal alone. The fact that this decision is signed by all three members of the Tribunal reflects our view of the importance of this decision as well as the significant contribution made by all three members to the drafting of the decision.
His Hon. Michael Brodrick, Judge of the Upper Tribunal,
Principal Judge for Traffic Commissioner Appeals and President of the Transport
Her Hon. Judge Beech, Judge of the Upper Tribunal
Stuart James, Member of the Upper Tribunal
2 July 2012