Liliana Elena Manole

A transport manager who knows that an operator’s nominal director is a sham, and colludes in or fails to act upon that fronting arrangement, may properly lose good repute. Fronting is deception which prevents Traffic Commissioners from knowing whom they regulate and strikes at the foundation of the operator-licensing regime.

Reasonable inferences may be drawn from established primary facts. A transport manager’s satisfactory compliance work does not outweigh knowing participation in fronting. A longer effective disqualification than that imposed on the nominal director may be proportionate where the transport manager had previously been found to have acted as a front and had been warned of the seriousness of such conduct.

The appellant was the nominated transport manager for Negru Trans Ltd. The Deputy Traffic Commissioner found that its sole director, Mr Smith, was a sham director and that the company was being operated by an unidentified controlling mind. The appellant carried out the administration and was connected with the maintenance provider.

On a remitted hearing, the Deputy Traffic Commissioner inferred that she knew Mr Smith was a sham director and had either colluded in the fronting arrangement or done nothing to prevent it. He found that she had lost good repute under Schedule 3 to the Goods Vehicles (Licensing of Operators) Act 1995 and disqualified her from acting as a transport manager for two years, producing an effective period of two years and nine months.

She appealed, challenging the inferences, the commencement date and the proportionality of the disparity between her disqualification and Mr Smith’s.

1. Appeal dismissed. The Deputy Traffic Commissioner’s findings were not plainly wrong. The established facts entitled him to infer that the appellant knew Mr Smith was a sham director. She performed the company’s administration, was involved with its maintenance provider, and would inevitably have encountered financial transactions which called Mr Smith’s directorship into question.

2. Fronting undermines the regulatory system because it conceals the person whom Traffic Commissioners are regulating. It therefore calls for a serious response. A transport manager is one of the Traffic Commissioners’ “eyes and ears”. Where the transport manager knows of fronting, satisfactory performance of ordinary compliance functions does not remove responsibility for facilitating, colluding in, or failing to act upon the deception.

3. The appellant’s earlier unsuccessful licence application, in which she had been found to be a front and to have misled the Traffic Commissioner, was material background. It supported the inference that she understood both the nature and seriousness of fronting and should have been alert to its indicators.

4. The loss of good repute under paragraph 16(1) of Schedule 3 to the Goods Vehicles (Licensing of Operators) Act 1995 was proportionate. So was the effective disqualification of two years and nine months under paragraph 16(2). The Deputy Traffic Commissioner had explained the disparity from Mr Smith’s two-year disqualification: unlike him, the appellant had previously been involved in proceedings concerning fronting and had then been given an opportunity to regain trust as a transport manager.

5. Applying the appellate approach in Bradley Fold Travel & Peter Wright v Secretary of State for Transport (2010) EWCA Civ.695, neither the facts nor the law required the Upper Tribunal to interfere.

• Upper Tribunal (Administrative Appeals Chamber): Dismissed the appeal and upheld the Deputy Traffic Commissioner’s decision of 17 November 2021.
• Upper Tribunal (Administrative Appeals Chamber): On 8 September 2021, allowed an earlier appeal because the reasons for loss of repute and indefinite disqualification were inadequate, and remitted the matter to the same Deputy Traffic Commissioner for fresh consideration.
• Deputy Traffic Commissioner: On 17 November 2021, found that the appellant had lost good repute under Schedule 3 to the Goods Vehicles (Licensing of Operators) Act 1995 and disqualified her from acting as a transport manager.