Decision

Application to the Traffic Commissioner for the return of detained vehicle WN64YXW

Published 27 June 2022

0.1 WESTERN TRAFFIC AREA

1. Application to the Traffic Commissioner for the return of a detained vehicle

2. WN64YXW

2.1 by

3. Haydock Finance Ltd

4. BACKGROUND

The facts relating to the detention of this vehicle are not disputed and are set out in the report of DVSA Traffic Examiner Philip Bibbings. In summary:

• On 16 June 2021, a 3-axle Scania tractor unit, WN64YXW drawing a 3-axle skeletal trailer loaded with a shipping container was directed in to DVSA’s check-site at Chilcomb, near Winchester. The combination was on route from Southampton dock to Aylesford in Kent.

• Checks showed that WN64YXW was not specified on any licence. A blue/green disc was on display in the window but this was identified as being an old, blank trailer MOT disc rather than an operator’s licence. The driver stated that he was employed by RFS Hire Ltd. Further checks showed that the operator’s licence of RFS Hire Ltd was revoked with effect from 29 August 2021 and both the company and the sole director, Roger Fowler, were disqualified from holding an operator’s licence for three years from that date. It was further found that another vehicle operated by RFS Hire Ltd had been impounded on 8 February 2021 so there was no doubt that the illegal operator was on notice of the risk of another impounding.

• A registered keeper showed the registered keeper to be “RFS European (Roger Fowler)” of an address in Backwell, Bristol.

• The trailer was disconnected and the tractor unit impounded.

On 25 June 2021, an application for the return of the vehicle was made to DVSA by Haydock Finance Ltd. My office only became aware of it on 13 July. The applicant relied upon the ground that it did not know that the vehicle was being used in contravention of Section 2 of the Act, that is, that it was being used for the commercial carriage of goods without the benefit of an operator’s licence. The case was put as follows:

“We are the legal owners of vehicle WN64YXW by way of a hire purchase. We were unaware that the vehicle was being used without a valid o-licence. We would like to arrange collection of the Scania R450.”

No hearing was requested. Conscious of the then Transport Tribunal’s comments in J Thorogood T/2005/542, and not being satisfied on the knowledge point, I decided to call the application at a hearing.

5. THE HEARING

Mr David Johnson attended for the applicant. Mr Johnson is director of Westbrook Commercials, a local collection agent for Haydock Finance. A suitable email of authority from a director of Haydock Finance Ltd was provided and a small bundle of documents handed in. Traffic Enforcement Manager Andrew Dean attended for DVSA by Microsoft Teams video link. The connection was sound throughout and I am satisfied that the remote attendance was fully satisfactory.

Mr Dean told me that Examiner Bibbings was on pre-booked annual leave. Mr Dean had been involved, as Mr Bibbings line manager, throughout the impounding and could confirm that the report provided, as I summarised in paragraph 1, was accurate. I was satisfied that DVSA had followed the correct procedure and the roadside decision to impound was sound.

Mr Johnson told me that Haydock Finance Ltd financed around £290 Million of investment each year, a significant proportion of which was commercial vehicles. This particular transaction had come through a local broker. It was normal to check that an operator’s licence was in place and those checks had been strengthened for the future but appeared not to have happened in this case. The local broker had said that the vehicle would be operated on a Bulgarian licence but that had clearly not happened. The terms and conditions required the hirer to ensure that all relevant laws were complied with and to ensure that the vehicle was not seized.

I reserved my decision.

6. DETERMINATION AND DECISION

The events relating to the unlawful use of the vehicle in this case are not disputed. The question is whether Haydock Finance Ltd had knowledge that the vehicle was being used in contravention of s.2 of the Goods Vehicle (Licensing of Operators) Act 1995. In determining knowledge, I have regard to the guidance in relation to knowledge of the Upper Tribunal in Nolan Transport T/2011/060, Asset to Asset Limited, T/2011/25 and Societe Generale Equipment France Limited, T/2013/21. I also have regard to the Tribunal’s decision in Thomas McKinney & Son Ltd T/2007/62, in which it is made clear that, once unlawful use is proved, the burden of satisfying the Traffic Commissioner that the vehicle should be returned on the ground that the owner did not know that it was being used in contravention of s.2 of the Act rests firmly with the vehicle owner.

I note the written documents provided in support of ownership and I am content that the applicant is the owner. I am further satisfied that the proper process was followed by DVSA so no issue of proportionality arises and I have no residual discretion.

Nolan Transport sets out the law in relation to knowledge in these circumstances at paragraphs 110 to 121. This is summarised in paragraph 13 of Societe General and a route map to a decision is indicated as follows:

In our view the more helpful course is merely to repeat the five categories of knowledge, which emerge from the authorities cited in these three decisions, with a view to setting out what needs to be proved if knowledge is to be established by one of these routes. The five categories are these:-

• (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

• Knowledge of circumstances that would put an honest and reasonable person on inquiry.

Category (i) should present no difficulty, it will require evidence of actual knowledge of the use in contravention. Categories (ii) and (iii) involve findings which justify imputing actual knowledge to the claimant. For the reasons set out in paragraph 118 in Nolan Transport no separate finding of dishonesty is required in order to impute actual knowledge to the claimant because the conduct, which will have been proved, if the required findings are made, is conduct which is in itself inherently dishonest. It is important to note that while it does not expressly feature in the definitions of knowledge in categories (ii) or (iii) proof of both these categories requires proof of a high degree of fault on the part of the claimant. Given that these two categories involve conduct which is inherently dishonest a finding that category (ii) or category (iii) knowledge has been made out can only be justified once findings of fact have been made which satisfy the Traffic Commissioner that each of the ingredients of the category in question has been established. Categories (iv) and (v) involve constructive, as opposed to actual, knowledge. The findings required to establish category (iv) or (v) knowledge, on their own, are unlikely to amount to more than mere negligence. That is not sufficient to establish knowledge for the purposes of showing that a claim under Regulation 4(3)(c) must fail. In order for a finding of category (iv) or (v) knowledge to be used to defeat a claim under Regulation 4(3)(c) there must be an additional finding that the claimant was acting dishonestly or had a dishonest motive in either failing to recognise that the vehicle was being used in contravention of s. 2 of the 1995 Act or in failing to make the inquiries which an honest and reasonable person would have made.

In the present case the Deputy Traffic Commissioner concluded that this was a case of category (iii) knowledge. Unfortunately, for reasons, which will appear in due course, he did not make all the findings required to justify that conclusion. With a view to avoiding such a situation in the future we suggest that Traffic Commissioners will find it helpful to assess the evidence in a way which seeks to answer these questions:

• What inquiries would an honest and reasonable person have made in the circumstances faced by the person claiming the return of the vehicle, (“the claimant”)?

If the answer is “None” there can be no question of imputed actual knowledge under category (iii).

If the answer is that an inquiry or some inquiries would have been made the questions that follow must be answered separately in relation to each inquiry that the honest and reasonable person would have made.

• Did the claimant make such inquiries?

If the answer is “Yes” there can be no question of imputed actual knowledge under category (iii).

If the answer is “No” the next question must be answered.

• Did the claimant wilfully refrain from making such inquiries? For the purposes of this question ‘wilfully’ means ‘deliberately and intentionally’ as opposed to ‘accidentally or inadvertently’.

If the answer is “No” there can be no question of imputed actual knowledge under category (iii).

If the answer is “Yes” the next question must be answered.

• Did the claimant recklessly refrain from making such inquiries? For these purposes ‘recklessly’ means ‘not caring about the consequences of failing to make such inquiries’.

If the answer is “No” there can be no question of imputed actual knowledge under category (iii).

If the answer is “Yes” the next question must be answered.

• Was a high degree of fault involved in wilfully failing to make such inquiries?

If the answer is “No” there can be no question of imputed actual knowledge under category (iii).

If the answer is “Yes” a finding that the vehicle owner had imputed actual knowledge under category (iii) is justified.

There are three reasons why it is important to follow this ‘route to decision’ carefully. First, it will ensure that nothing is left out. Second, it will ensure that a finding of category (iii) knowledge, involving, as it does, inherent dishonesty, is properly justified on the evidence. Third, it will enable Traffic Commissioners to take into account and assess any innocent explanation advanced by the claimant. Such an explanation is most likely to arise in relation to questions (iii), (iv) and/or (v).

There is no legal requirement specifically for a finance company to make all reasonable enquiries as to whether there is a valid operator’s licence in place prior to financing a vehicle. However, the caselaw is clear that enquiries must be made. In relation to the first question I must answer, this is a sizeable finance company that is experienced in relation to vehicles that will fall under the operator licence regime. Paragraph 16 of Societe General makes it clear that a “Traffic Commissioner is entitled to have regard to the well-known principle that everyone is taken to know the law. In particular that means, in an impounding case, that we are all, (including the honest and reasonable person and Finance Companies), taken to know: (a) that it is unlawful under s.2 of the 1995 Act, to operate a heavy goods vehicle unless its use is authorised under an operator’s licence, (b) that operating a vehicle in contravention of s.2 of the 1995 Act renders the vehicle liable to be impounded and (c) that the grounds on which an impounded vehicle can be returned to its owner are limited to those set out in Regulation 4(3) of the 2001 Regulations as amended. In our view it is open to Traffic Commissioners to conclude that the knowledge of these matters would influence the decision of the honest and reasonable person as to whether or not to make enquiries.”

Having regard to that principle, I find it entirely reasonable that enquiries would be made to confirm that the vehicle is being financed to a business with a valid goods vehicle operator’s licence or that the vehicle will otherwise be used lawfully. It is accepted that no such enquiry was made here. There is a suggestion that the vehicle may have been intended to be operated under a Bulgarian licence but no such licence was seen. It would be naïve, given the history of linked company RFS Hire Ltd, to consider that such use would be compliant with the cabotage regulations as amended by the Trade and Cooperation Agreement. In any case, no such licence could be held by RFS European Ltd, as a licence issued in any Member State can only be held by a business established within that Member State. The terms and conditions (para 5.6) prohibit sub-hiring the vehicle. So that was never a realistic option. And, at its simplest, why would a Bulgarian operator want a right-hand drive truck?

It is unconscionable for the owner of this vehicle to defeat the purposes of the regulations by shutting their eyes to the obvious, and I find that they have exhibited a wilful and reckless failure to make such enquiries as an honest and reasonable person would make. That goes well beyond mere negligence and I find a high degree of fault on the part of Haydock Finance Ltd.

The application for the return of the vehicle is refused.

Kevin Rooney

Traffic Commissioner, Western Traffic Area

5 August 2021