Transport Regulation Unit v RJ Rutledge Ltd

A licensing authority must give an unsuccessful operator’s-licence applicant clear written reasons for its decision. A bare recital of statutory provisions does not disclose the reasoning needed to decide whether an appeal is warranted or to formulate focused grounds. Failure to give adequate reasons may itself justify allowing an appeal.

When deciding whether arrangements are satisfactory under section 12C of the Goods Vehicles (Licensing of Operators) Act (Northern Ireland) 2010, the authority must conduct a proper evaluative balancing exercise. An adverse compliance audit is important evidence, but must be assessed in context, including the operator’s compliance history, the nature and significance of deficiencies, explanations, remedial action and the scope for appropriate undertakings.

The appellant company applied for a restricted goods-vehicle operator’s licence after its director’s former sole-trader business changed legal entity. Following a Driver and Vehicle Agency compliance audit assessed as unsatisfactory in several areas, the Head of the Transport Regulation Unit refused the application by letter dated 26 October 2021.

The letter identified statutory provisions concerning drivers’ hours and vehicle maintenance, but did not explain why the authority considered that the company’s arrangements failed to meet them. Further information about the reasoning emerged only in a later determination refusing a stay. The company appealed to the Upper Tribunal, contending that the audit findings required context and that its operational arrangements and compliance record had been inadequately assessed.

1. The appeal was allowed. The refusal decision was wrong and the application was remitted to the Head of the Transport Regulation Unit for redetermination, with an expectation that it would be granted.

2. The refusal letter did not give adequate reasons. It merely recited the provisions thought relevant, namely section 12C(2)(a), section 12C(2)(b) and section 12C(4) of the Goods Vehicles (Licensing of Operators) Act (Northern Ireland) 2010. It did not identify the findings or reasoning by which the Head of the TRU concluded that the requirements were unsatisfied. The Tribunal accepted and endorsed the guidance in Nico 2014 Limited [2022] UKUT 00096 (AAC) and ALPS Scaffolding Ltd [2022] UKUT 00094 (AAC): full written reasons are required at or before an adverse licensing decision so that an operator can make an informed decision about an appeal and formulate appropriate grounds.

3. The Head of the TRU was entitled to regard an unsatisfactory audit as raising concerns. However, the audit was considered in a raw and insufficiently contextualised form. The authority did not properly conduct the required balancing exercise. Relevant matters included the director’s previous operator’s licence without compliance history, the absence of issues concerning financial standing or the nominated transport manager, the minor and explained drivers’ hours issues, acceptance of deficiencies in walk-round checks and maintenance, and the company’s commitment to remedy them.

4. The Head of the TRU could also have engaged with the company after receiving the audit, explored compliance with recommendations, and considered safeguards rather than immediately refusing the application. The Tribunal held that the relevant licensing requirements were satisfied and saw no evidence that any remaining requirement was unsatisfied.

5. On remittal, the Tribunal considered it appropriate for the licence to carry the usual restricted-licence undertakings plus requirements for the director to complete a new operator’s course within six months, the relevant company individual to complete a transport-manager refresher course, and an independent audit within six months of grant. Priority was expected because the refusal had compelled reliance on third-party hauliers.

• Upper Tribunal (Administrative Appeals Chamber): Allowed the appeal and remitted the restricted-licence application for redetermination, expecting it to be granted.
• Head of the Transport Regulation Unit: Refused the application for a restricted goods-vehicle operator’s licence on 26 October 2021, relying on alleged failures to meet section 12C requirements of the Goods Vehicles (Licensing of Operators) Act (Northern Ireland) 2010.