Decision

Decision for HITACHI CAPITAL (UK) PLC in the matter of a detained vehicle

Published 25 February 2022

0.1 IN THE EASTERN TRAFFIC AREA

1. IN THE MATTER OF A DETAINED VEHICLE: Y100 ADA

1.1 HITACHI CAPITAL (UK) PLC (Applicant)

1.2 -V-

1.3 THE DRIVER AND VEHICLE STANDARDS AGENCY (Respondent)

2. WRITTEN DECISION OF THE TRAFFIC COMMISSIONER

The background to this application is as set out in the Notice of Detention, to be found at page 6 of my bundle, and subsequently confirmed in evidence before me.

Vehicle Y100 ADA, a 4 axle Volvo FM rigid vehicle with a maximum authorised vehicle weight of 32,000 kilogrammes was apparently escorted into the Port of Ipswich on 22 October 2021. The vehicle was eventually impounded at 8:45 am on the same date, following an interview under caution with the driver, identified as Ionut-Alexandru Covaci, by Traffic Examiner, Raymond Hawkins. That statement can be found at pages 32 to 65 of the bundle.

No issue was taken with the Respondent’s notification following which the Office of the Traffic Commissioner received an application completed by the Applicant dated 18 November 2021, i.e., before the statutory deadline. As is now the practice in several subject areas, the preparation of this case was completed outside this traffic area.

I understand that my Case Management directions were communicated to the parties under cover of a letter dated 8 December 2021. Considering the restrictions brought about by the pandemic and the need to ensure that the proceedings were understood, I determined that it was necessary to extend the statutory timetable under Regulation 23. I made further Directions for the fair hearing of the case on 26 November 2021, requiring the hearing to be listed for parties to attend and, 14 days prior to the hearing date, the applicant must lodge with OTC any further documentation, which the applicant says proves ownership and serve a copy on the Respondent, and a statement detailing how the vehicle came to be used and what inquiries the Applicant made prior to the alleged use. On 7 January 2022, I received a request for Daniel Evans to attend the hearing by way of video link, apparently due to the effects of the Covid-19 virus.

3. The Hearing

The application form dated 18 November 2021 indicated that the Applicant might not require a hearing but in-line with current Upper Tribunal case law, it was determined that a hearing was required, to make a fully informed decision. Notification of the hearing was then sent by the Office of the Traffic Commissioner on 8 December 2021. That hearing took place on 10 January 2022 in Tribunal Room 1 of the Office of the Traffic Commissioner in Cambridge. The Applicant was represented by Daniel Evans, who gave his job title as Financial Solutions Support Manager on behalf of the applicant. He appeared via video link. The Respondent was present in the form of the Traffic Examiner, Mr Hawkins, accompanied by Liam Ross, to observe. Neither party was legally represented.

At the commencement of proceedings, following usual practice, I sought to explain the process for the hearing and to confirm the grounds upon which the Applicant sought return of the vehicle. The application form referred to one ground:

“c) I did not know that it was being, or had been, used in contravention of section 2 of the 1995 Act.

In the details of the application, it is stated that the vehicle had been supplied to NSD Haulage Ltd under a Hire Purchase agreement (ARFL196146). It explains that the applicant is the legal owner of the vehicle and refers to the Hire Purchase agreement, copy of a sales invoice and an HPI check.

4. The Law

Section 2(1) of the 1995 Act provides that no person shall use a goods vehicle on a road for the carriage of goods:

a) for hire or reward; or

b) for or in connection with any trade or business carried on by him, except under a licence issued by this Act.

The Goods Vehicles (Enforcement Powers) Regulations 2001, as amended allows for the detention and disposal of vehicles, which are not being operated legally. The Regulations also provide the limited grounds upon which an application can be made to a traffic commissioner for the return of the vehicle.

The owner of a detained vehicle may within that specified period apply to the traffic commissioner for the area in which the vehicle was detained for the return of the vehicle.

5. The Evidence

In reaching my Decision, I have reviewed the following documents:

(i) the Application (pages).

(ii) Case Summary and Bundle lodged on behalf of the Respondent.

(iii) the Senior Traffic Commissioner’s Statutory Document (No. 7) on Impounding.

I need not repeat the full evidence here, it is adequately recorded on the taped transcript of the hearing and the hearing was in any event short, allowing me to rely on my contemporaneous notes rather than request a transcript.

I noted at the outset that the Applicant took no issue with the Respondent’s detention of the vehicle. That was consistent with the ground raised in the Notice of Application.

6. Findings

For the reasons above and noting the content of the Respondent’s statement, I concluded that the detention of the vehicle by the Respondent’s officer under the Regulations, was lawful.

The onus for proving ownership lies with the Applicant. The application asserts that the Applicant is the lawful owner of the vehicle. I refer to the summary of the relevant case law in the Senior Traffic Commissioner’s Statutory Document No. 7. As per the Upper Tribunal Decision in 2011/029 David Pritchard, it is for the applicant to prove ownership of the relevant vehicle before I am required to consider other issues, although it might be appropriate for me to hear all the evidence. As is apparent from the case law, the correct test is whether the applicant can produce sufficient evidence to satisfy me upon the balance of probabilities that he is the owner, not whether there is credible evidence that the vehicle is owned by anyone other than the Applicant.

The application refers to evidence in the form of an HPI check, sales invoice and copy of a Hire Purchase agreement in relation to the seized vehicle. I referred to Mr Evans’ email of 15 December 2021 in furtherance of the Case Management Directions and the attached Invoice dated 9 October 2018 giving instructions from NSD Haulage Ltd instructing the applicant to a deposit of £2,100 and to settle an outstanding amount of £25,200 owing to Sidhu & Sons UK Ltd (page 25) in respect of a vehicle with chassis number YV2JSO2G58A662019. The applicant also referred to an HPI check against Y100 ADA showing the record on the HPI register dated 16 October 2018, so consistent with the invoice, and refers to a term of 42 months (page 26). A non-regulated Hire Purchase Agreement is to be found at pages 28 to 30 and is dated 16 October 2018. It refers to the customer as NSD Haulage Ltd but is signed by Navjot Singh, who is described as a director.

According to the Respondent’s statement, the driver at the time of detention claimed to be working for himself, in the name of A.D.A Haulage Ltd (subcontracted to Sidhu Transport) and claimed to be the owner of the vehicle, despite his licence having been revoked on 10 August 2021, with effect from 10 September 2021. The Respondent referred to a Registered Keeper check at the time of detention and in the week prior to the hearing, both referring to ADA Haulage. Evidence of the Registered Keeper is not definitive evidence of ownership. It may have prompted further inquiries, but the Applicant has produced sufficient evidence of its beneficial interest, so that I can be satisfied as to its ownership. I therefore proceeded to consider the evidence in respect whether the Applicant had knowledge of the unlawful operation.

It is not for me to offer conjecture on what might have happened with the vehicle in question. I cannot help but notice the similarities between the customer referred to in the interview with Mr Covaci and the third party referred to in the invoice at page 25. The legal onus remains on the applicant to satisfy me as against its grounds. In determining whether that ground is made out, I am assisted by the summary in Statutory Document No. 7 and the relevant questions posed by the Upper Tribunal in the leading case law. The legal principles of knowledge are extracted from appeal decisions in 2013/021 Societe Generale Equipment Finance Ltd v VOSA and 2011/060 Nolan Transport v VOSA. Statutory Document No. 7 summarises the law and the types of question which the TC might have to answer. Some of these involve complex issues. The starting point is “Has the claimant satisfied me that he, she or it probably did not know that the vehicle was being or had been used in contravention of …. the Act?”.

The only additional information received from the applicant is to be found in an email dated 22 December 2021 (page 31) which was sent by Mr Evans. He states that the Sale and Hire Purchase back agreement was proposed to the applicant by Radar Finance & Leasing Ltd. Prior to the agreement being paid out, an asset inspection was conducted by agents instructed on behalf of the applicant, namely Scanmaster Asset Inspections Ltd. This is said to have been completed on 15 October 2018. This apparently involved a check on whether NSD Haulage Ltd held a valid operator’s licence. Mr Evans refers to an email sent by the Respondent on 23 September 2021, which was received but “unfortunately not dealt with at the time and the first I became aware of the situation was when the DVSA had taken possession of the vehicle”. He states that the applicant was unaware that the vehicle was in the possession of A.D.A. Haulage Ltd. He asserts that there was no reason to believe that the vehicle was being used without the appropriate operator’s licence.

It was confirmed in evidence that the email attached what the Respondent describes as a ‘Pre impound letter’, to be found at page 62 of the bundle and dated 23 September 2021. I quote from that letter, which is addressed to one of this applicant’s email addresses. It puts the recipient on notice that the respondent has been investigating operations involving A.D. A Haulage Ltd and that there are grounds to suspect that those operations are in breach of the law. It puts the recipient on notice that it considers the applicant to be an interested party.

The Upper Tribunal has usefully described the five categories of knowledge: (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; (v) Knowledge of circumstances that would put an honest and reasonable person on inquiry. Categories (ii) and (iii) involve findings which justify imputing actual knowledge, but there is no requirement for a separate finding of dishonesty because the conduct, which must be proved, is inherently dishonest. Those categories require proof of a high degree of fault on the part of the applicant. The evidence does not support a finding of dishonesty; indeed, Mr Evans has been very frank in his evidence. However, categories (iv) and (v) involve constructive knowledge. Findings required to establish category (iv) or (v) knowledge, on their own, are unlikely to amount to more than mere negligence, which is not sufficient to establish knowledge so that a claim under the regulations will fail.

To start, I approach my considerations from the point of view of the applicant, as opposed to Mr Evans. The Statutory Document usefully refers to a company often being likened to a human body, with its directors acting as the controlling mind, but it is not the knowledge of the directors but that of the company (as a whole), which falls to be considered.

The Statutory Document encourages traffic commissioners to look at the conduct and determine whether it was inadvertent or accidental. On Mr Evans’ admission, the applicant has a clear process for checking whether there was an operator’s licence and was therefore aware of the importance of that requirement. There is no evidence to suggest that it was not followed at the time of the hire purchase agreement in 2018. But, as the Tribunal indicated in 2003/003 Close Asset Finance v SoS for Transport, if it did suspect wrongdoing and failed to act, that may support a finding of knowledge. The Tribunal has suggested that if the true situation would have become apparent, on the basis of enquiries that any honest and reasonable person would make, that may support a finding of knowledge. I refer to the Pre impounding letter. The onus is on the applicant to satisfy me as to why this did not prompt further enquiries. If the true situation would have become apparent, based on enquiries that any honest and reasonable person would make, then the applicant must justify that situation. I have considered whether obvious inferences might have been drawn. However, the case law suggests that there must be a high degree of fault to impute knowledge on the party of the applicant. My attention was drawn to the reference at the top of the letter, clearly identifying vehicle Y100 ADA. Mr Evans has been very frank that the email sent by DVSA was not addressed in the manner that it should have been.

I must consider what prompt enquiries might have resulted in knowledge of the use of this vehicle. The DVSA letter refers to the operations of A.D.A Haulage Ltd. I accept the Applicant’s evidence that it has had no relationship with that entity or Mr Covaci. However, the DVSA letter also identifies the vehicle, in which the Applicant has a financial interest.

In the recent case of 2020/009 Paccar Financial Polska Sp. Zo.O v DVSA, the Upper Tribunal referred to a reckless or cavalier approach to the return of vehicles to offending clients. Those are markedly different facts to this case but, on Mr Evans’s evidence, the letter was passed from the Applicant’s customer service team to the Collections Department on the date of receipt, namely 23 September 2021. The Collections Department “did nothing with it”. As Mr Evans indicated, it should have been escalated to allow him to respond immediately. I accept that staff in many businesses are working remotely due to the pandemic restrictions. That did not prevent the customer service team from doing what was required and passing the DVSA letter to the Collections Department. The Applicant’s own processes for checking the existence of the asset and an operator’s licence at the outset of the agreement confirm that the Applicant is aware of the potential consequences of unlawful operation. Having been put on notice by DVSA, the Applicant should have acted promptly, in the way which Mr Evans suggested would have been the case. In his words, the Collections Department acted “not in the manner we would expect”. That indicates a high degree of fault on the part of this Applicant. In essence, the Applicant had strong grounds to suspect wrongdoing and then failed to act. On that basis the Applicant has failed to satisfy me as to the requisite knowledge.

I make no criticism but record for future reference, that these are complicated issues and neither party availed themselves of legal advice, where the early involvement of qualified representatives might have led to a much earlier resolution.

R Turfitt

Traffic Commissioner

10 January 2021