The sun goes down on a stupid venture

From the register of decisions taken by adjudicators at London Tribunals.

I am dealing with no fewer than sixty-two appeals against penalty charge notices (PCNs) served by the London Borough of Islington on Sunshine Ventures UKBD LTD, the appellant company, as the registered keeper of the two vehicles concerned. Sixty of those PCNs relate to the vehicle with VRM LS18 OSV. Of those sixty, fifty-eight are for moving traffic contraventions and, in particular, contraventions of prohibitions on motor vehicles. The remainder are for parking contraventions. Two appeals, both in respect of moving traffic contraventions, relate to vehicle with VRM DF65 GVN. The contraventions all occurred between 16 April to 12 July 2022. The fact of the contraventions has never been disputed and so, remarkable though it may seem, these appeals concern two vehicles (with LS18 OSV bearing most of the responsibility) that have accrued PCNs amounting to a total liability of £8,060 in that period. Even more remarkably, the enforcement authority (EA) says that when PCNs that are not before this tribunal are included, these two vehicles and one other vehicle have accrued PCNs with a total unpaid liability of £22,357 as at 25 July 2022. I am only concerned, however, with the sixty-two appeals before me and the evidence in respect of those matters. Although two of the PCNs concern parking contraventions, and their enforcement is governed by different legislation from the others, the legislation is materially the same and so there is no distinction in how I approach all these appeals.

In reality, these appeals stand or fall together, and it would be artificial to approach each appeal in isolation from the others. That is because the appellant company seeks to transfer liability for each PCN on the same basis (or bases) and to the same individual - a Mr. Siem Yared - in each case. In each set of representations against the PCNs the appellant company sought to transfer liability on the basis that the vehicle was, at the time of the contravention, subject to a hiring agreement with Mr. Yared. The EA, in each case, rejected the representations because it did not accept as genuine the document provided with the representations and which purports to be a hiring agreement with Mr. Yared for the vehicle concerned. Now, the appellant company in each appeal relies on a further document, a purported letter of termination of the agreement. It seems that the appellant company now argues that, whilst each vehicle was at some point subject to a hiring agreement with Mr. Yared, the appellant company (on a date that is unclear) exercised its right to terminate the agreement by virtue of Mr. Yared's repudiatory breach of it. On that basis, the appellant company appears to be arguing that on the occasion of the contraventions (or some of them) the vehicle was under the control of Mr. Yared without the consent of the appellant company. Those two grounds of appeal are mutually exclusive. Mr. Yared was either in control of the vehicle with the agreement of the vehicle's owner on the basis of the hiring agreement or, if the agreement had come to an end and Mr. Yared continued to retain the vehicle without the owner's permission, then he did not have the owner's consent to retain it. Given that the first contravention occurred on 16 April 2022, just eleven days after the purported hiring agreement began, I do not take the appellant company to be arguing that all of the contraventions occurred after the agreement had been terminated. Unfortunately, I do not know when the appellant company says that termination occurred.

Given that the appellant company is, on its own account and by legal presumption as the registered keeper of each vehicle, that vehicle's owner, it is for the appellant company to prove, on the balance of probabilities, that the vehicle was, as applicable, subject to a valid hiring agreement at the relevant time or was under the control of Mr. Yared without its consent

As I have indicated, I have approached these appeals globally. In so doing, however, I have undertaken the substantial task of reviewing the relevant evidence in each appeal. There was value in doing that because the evidence in each case is not precisely the same. Both the EA and the appellant company have, in some cases, provided evidence that was not provided in other cases. That evidence is, however, relevant to the overarching issues in all the appeals.

The EA's case and evidence

The EA disputes both bases upon which the appellant company seeks to transfer liability. In reality, what the EA alleges is that the purported hiring agreement and purported termination letter are a sham or contrivance. The EA does not positively assert - and nor does it need to prove - precisely what, if any, relationship the two vehicles and the appellant company had with Mr. Yared. However, it suggests that the documents and the case put forward by the appellant company and upon which it relies have, effectively, been fabricated to frustrate the enforcement of the numerous PCNs issued to the appellant company by sending the EA on a 'wild goose chase' to track down the person liable.

The EA makes, in particular, the following points, in addition to its observations on the appellant company's evidence, to which I shall return.

It says that, as I have indicated above, there is a very large outstanding liability for PCNs served on the appellant company for the two vehicles in this case and one other vehicle. These amount to 185 PCNs. The EA says that, in each case, it has proved difficult or impossible to confirm the existence or liability of the hirers in respect of these PCNs and no payment has been recovered. In particular, the EA says that in relation to the vehicle that is not subject to these appeals, when the EA contacted the purported hirer, he was able to demonstrate that he had not hired the vehicle and that his details had been used fraudulently. There is no direct evidence for this particular assertion that is made in the case summary and ideally some such evidence would have been provided for it. However, there are other pieces of evidence that support the general contention that the EA has been unable to confirm the existence and liability of persons that the appellant company has nominated as hirers of vehicles in respect of which the EA has served PCNs.

In its notice of rejection (NOR) dated 4 July 2022 in respect of PCN IZ22085081 the EA stated:

"You have asked us to transfer liability for this PCN and have provided a hire agreement. I am afraid that we will not transfer liability as our records show that where we transfer liability to a person you have asked us to transfer liability to, the PCN goes unpaid and progresses without any contact from the hirer. We have identified numerous vehicles and hire agreements supplied by you and as my colleague has advised, we have received complaints from some of the people you have stated have hired a vehicle."

NORs issued in respect of other PCNs on (at least) 5 and 6 July 2022 contained the same statement. In an NOR issued on 19 July 2022 in respect of PCN IZ21812996 the EA said:

"You have asked us to transfer liability for the penalty charge to the person you have identified as having hired the vehicle at the time of the contravention. We note that we have transferred liability for previous penalty charges involving your company and had no contact from the driver you declared had hired the vehicle. Examination of other PCNs issued to your vehicles shows a similar pattern, whereby only 1% of penalty charges are typically paid by the driver. In addition we have received representations from persons you had reported as having hired the vehicle where they declared they had never hired a vehicle from you, claiming identity fraud had occurred. Until such time that you can provide additional supporting evidence to support your claim that the vehicle had been hired by the person you identified, we will not transfer liability and you remain liable to pay the penalty charge."

Further, in a letter dated 4 August 2022 the EA's Parking Fraud Team informed the appellant company that as a result of an audit of outstanding PCNs issued to it, the EA would, as a matter of policy, no longer transfer liability for PCNs to purported hirers of the appellant company's vehicles because it was "difficult or impossible to confirm the existence or liability of the drivers".

Although those pieces of evidence are hearsay in respect of the assertions of fact made therein, I am able to give some, limited weight to those assertions as to the difficulties experienced by the EA in confirming the existence and liability of persons identified by the appellant company as hirers of its vehicles and that some persons so identified have positively asserted to the satisfaction of the EA that they were not the persons who hired the vehicles. The authors of those assertions of fact have, on the face of it, some familiarity with the records of the EA upon which the assertions are based. The evidence lends some, limited weight to the suggestion made by the EA that this appellant company has a tendency to furnish the EA with hiring agreements that are not genuine.

It seems to me, however, that the real value of this evidence is not what it positively proves, but to put the appellant company's case and evidence in context. By 4 July 2022 (and possibly earlier) the appellant company can have been under no illusions as to precisely why the EA was refusing to transfer liability. That date pre-dates all of the appeals before me. It follows that the appellant company knew, by the earliest of these appeals, what case it had to meet in order to discharge the burden of proving that the hiring agreements (and termination letter) were genuine. That the appellant company knew what the issues were, and what kind of evidence it needed to provide, was further re-enforced by the letter of 4 August 2022 and indeed by the EA's case summaries in each of these appeals. One would expect that any appellant, facing a potential liability of over £8,000, and knowing precisely what case it needed to meet, would serve on this tribunal all the evidence, and the best evidence, at its disposal to discharge the burden of proof upon it.

It is to that evidence that I now turn.

The appellant company's case and evidence

The ground of appeal entered into the tribunal’s system when each appeal was made varies, but the narrative notices of appeal contain a variation of the following:

"We are a car rental company, the [I]slington council rejected us saying the rentalagreement we have provided is invalid. It is totally untrue, and in fact, the person still using that car even after we send him the termination. Police investigation is ongoing on him as well. We, as a rental company, cannot do much more about it."

In one notice of appeal (case reference 2220625374), made on 22 August 2022, the appellant company says that it has been telling Mr. Yared to return the car "for two months now".

In some notices of appeal (e.g. case reference 2220581348) it is said that the agreement was terminated because of the number of PCNs accrued. In another (2220583795) it is said the agreement was terminated because Mr. Yared was "reckless". It is surprising and notable that the appellant company does not say in its notice of appeal precisely when it deemed the agreement to be terminated, and for what reason.

In each case (including, notably, the two appeals relating to vehicle DF65 GVN) the appellant company has provided the main, signed page in what it describes as the hiring agreement for vehicle LS18 OSV. This is a surprising error in respect of the two appeals concerning vehicle DF65 GVN.

With its representations in each case the appellant company provided a fuller version of the hiring agreement, purporting to include the full terms and conditions. Again notably, in the case of appeal 2220579787, which relates to vehicle DF65 GVN, the appellant company has provided the hiring agreement for vehicle LS18 OSV; again a surprising error.

Even more notable, however, is the different hiring agreement provided in respect of PCN IZ2218862A, issued for a contravention on 25 May 2022 in respect of vehicle DF65 GVN. Whilst this hiring agreement does indeed relate to the correct vehicle, and has Mr. Yared's name upon it, two aspects are very concerning. First, even to a lay person, the signature for Mr. Yared is radically different from the signature for him on the hiring agreement for vehicle LS18 OSV. Second, the agreements are almost precisely co-extensive in time, with just a few days difference either side. At the time of the contravention to which this PCN relates, if these two agreements are to be accepted, Mr. Yared would have been in possession of two different vehicles hired from this appellant company at once. No explanation is given as to why this one man would need two vehicles for a period of several months. That is particularly, odd when, on the face of the hiring agreements provided, clause 9 prohibits the subletting of the vehicle to another person.

Indeed, that highlights another problem identified by the EA; the complete lack of any corroborative evidence as to how Mr. Yared came to hire these vehicles or what happened once he did. There is no evidence (save for the termination letter, to which I shall return) of Mr. Yared's initial enquiry, no statement from the individual(s) at the appellant company who dealt personally with Mr. Yared, no evidence of the due diligence they did on him, or of e-mails or any other communications with him. The absence of such evidence which, it if exists, would be in the hands of the appellant company, is striking.

The hiring agreement

The main, signed page of the hiring agreements appears on its face to be fairly standard, apart from the odd phraseology in the text above the signature field. There is ambiguity in that text as to the precise circumstances in which the £25 fee is due. The £25 fee is dealt with slightly differently in clause 4D of the appended terms and conditions.

The main difficulties are indeed with the appended 'terms and conditions', to which the main, signed page refers and which, in turn, refer to the main, signed page as 'Exhibit A'. There are numerous issues but I shall I identify the main oddities with the contract, as a whole. I take into account that the terms and conditions were probably not drafted by a solicitor but, nonetheless, many of them do not even make sense as a matter of common sense, let alone law.

The first and, frankly, remarkable oddity is that the contract does not actually specify the cost of hire, i.e. the rate which the lessee must pay to hire the vehicle. Clause 6, which refers to the lessor's (the appellant company's) rights upon a default by the lessee, sets out the consequences if the lessee fails to make the weekly lease payments 'as required under item 3'. But item three does not specify the amount of the payments at all and, in fact, refers to the lessee's duties in respect of the registration and taxation of the vehicle.

Second, whilst clause 4C refers to deductions from a deposit, the contract does not specify what that deposit shall be.

Third, there is odd, inconsistent and imprecise language used throughout the hiring agreement (comprising 'exhibit A' as it is described, and the appended terms and conditions). Just to a few examples, clause 5 begins: "this contract shall be subject to the excessive jurisdiction of the United Kingdom laws". Perhaps this means 'exclusive jurisdiction'. The rest of the clause, concerning wear and tear, is very difficult to follow. Even if a non-lawyer might not know that, for the purposes of the law of contract there are no 'United Kingdom laws' other than statutes passed by Parliament that are intended to affect the laws of contract in England and Wales, on the one hand, and Scotland on the other, the effect of this clause is thoroughly ambiguous. By clause 5B, the lessee agrees not to use the vehicle "for any unlawful or wrongful activity which is in violation of UK laws guidelines..." What guidelines? Clause 10, concerning the termination of the lease says, "Termination of the lease shall only occur in conjunction with termination of the vehicle lease agreement with one months minimum notice". This clause, to the extent it makes sense at all, appears inconsistent with clause 6(ii), which provides for the appellant company to terminate the lease without notice in some circumstances. There are numerous other examples.

In short, the hiring agreement contains a number of oddities which are hard to reconcile with it being a document genuinely containing the terms of an agreement reached in good faith by the parties, which was intended to create legal relations and which could be adjudicated upon by a court if necessary. It occurred to me that it might be some kind of 'pro forma' contract that has been translated from a different language.

The termination letter

I did not think much of the EA's point about the place to which, according to the termination letter, the vehicle was to be returned. There is no evidence to back up its assertion that the address is on a narrow street with no forecourt and, in any event, the address is an address which is used by the appellant company on its letter of representations and the hiring agreement. The other points made by the EA about this strange document do, however, have merit.

As the EA points out, there is no evidence that this letter was even sent. It does not bear the address of Mr. Yared and, if it was e-mailed to him (given that his e-mail address was provided on the hiring agreement), the covering e-mail has not been provided.

The letter states:

"This Letter is to confirm that your contract with Sunshine Ventures UKBD Limited T/A Sunshine Automobiles is terminated, No Contact will deem this agreement voided, Reason for refusal of extension;

- Failure to comply with terms as stated in the contract"

The reference to a refusal of an extension does not make sense. Whilst on the face of it the letter appears to state that the agreement is terminated by 'no contact', there is no clause in the hiring agreement itself requiring a certain level of contact, or the consequences of a lack of contact. Nor, it should be said, is there any clause that expressly states that the appellant company is entitled to treat the agreement as repudiated if a large number of PCNs are accrued. On the contrary, the hiring agreement contains provision for the lessee to be liable for such PCNs and for the appellant company to charge a fee for administering them.

The termination letters provided in respect of the two appeals concerning vehicle DF65 GVN instead refer the other vehicle. A further surprising error.

There are further problems with this letter, and indeed with the appellant company's case that the agreement was terminated and the vehicle was thereafter under the control of Mr. Yared without its consent. Most notably, and entirely unaddressed by the appellant company since the matter was pointed out in the first of the EA's case summaries, is the lack of date on the letter, but the specification of the date of 30 July 2021 as the date by which the vehicle must be returned. It might be said that it was a typographical error, and that the year should be read as 2022. Although another surprising error, that would be broadly consistent with the appellant company's notice of appeal in case 2220625374, made on 22 August 2022, that the appellant company had been trying to get Mr. Yared to return the vehicle 'for a couple of months now'. However, there is no evidence that the threats referred to in the letter have been carried out. The letter refers to an immobiliser which, if operated, would have prevented the moving traffic contraventions at least. There is no evidence of what, if anything, happened with the immobiliser. There is no evidence of any civil claim for recovery of the vehicle. Although the letter refers to Police action, and the appellant company has alluded to this in its notices of appeal, there is no evidence of a crime reference number or anything of that nature.

In short, there is no evidence of any of the steps that the owner of a valuable asset, a motor vehicle, might be expected to take to recover that vehicle in circumstances in which the person in possession of it did not have the owner's consent.

Conclusion

Even the sharpest contract lawyer will sometimes make the odd mistake in drafting an agreement, and, similarly, lawyers' letters can sometimes contain errors. In this case, the sheer number of errors, inconsistencies, anomalies and matters that are entirely unexplained among the documents relied upon by the appellant company is remarkable, even taking into account that the documents might have been drafted by a lay person. After all, the author of the documents is a person of business, and the documents concern that business's valuable assets, namely motor vehicles.

Dealing with the purported hiring agreement, it is not only the number of oddities in the document that is remarkable, though, it is their fundamental nature. The agreement does not even state the amount to be paid for the hire of the vehicle(s). Nor is the agreement to be looked at in isolation. In determining whether the hiring agreement is probably a genuine agreement, and not a sham or contrivance, I have looked at all the surrounding circumstances. I find the fact of two concurrent hiring agreements for two vehicles, with apparently different signatures, but in respect of the same individual, very concerning. The further matters I have highlighted in my review of the appellant company's evidence add to my concern; the inconsistencies and anomalies detract from the credibility of the appellant company's case that the agreements are genuine.

The purported letter of repudiation is very odd and does not even state the date upon which the appellant company treated the agreement as terminated. The circumstances of the purported termination are unclear.

A genuine document or set of documents purporting to contain, or to arise from, an agreement, even if it contains the occasion error, is likely to be consistent with itself and with known facts and with common sense. That is because the parties to the agreement and documents arising from the agreement, acting in good faith, typically want to document their agreement, and each matter arising from the agreement, so each party clearly knows its rights and responsibilities under it. Further, in the event of a disagreement about those rights and responsibilities, a court can look at what has occurred and, by reference to the agreement, clearly determine the respective liabilities.

No such care or concern is typically found in a sham agreement or contrivance. That is because the documents merely have to provide a facade, to mislead a third party into thinking the parties have reached an agreement when they have not, or that an event has occurred when it has not. The parties are not genuinely documenting their agreement, and will not genuinely rely on the documents to resolve a dispute. They do not expect their documents to be pored over to resolve a contractual dispute because they do not anticipate such a dispute. They are merely for show, and often do not withstand scrutiny.

The number and nature of the anomalies in the documents provided by the appellant company in this case, and the fact that they are unexplained, is much more consistent with the purported hiring agreements not being genuine hiring agreements.

Taking the evidence as a whole, and bearing in mind that the appellant company knew full well of the issues raised by the EA as to the genuineness of the hiring agreement, it has fallen far short of proving on the balance of probabilities, that the hiring agreements relied upon in these appeals are genuine. The first ground of appeal fails.

The second basis upon which the appellant company seeks to transfer liability is parasitic upon the first, because it relies on the termination of an agreement that I have not found to be genuine. Nonetheless, I do not accept either, and for the same reasons, that the termination letter is a genuine letter. For the avoidance of doubt, given the paucity of the evidence as to the steps that the appellant company has taken to recover the cars, I further decline to find that the vehicles were at any time under the control of any person without the consent of the appellant company.

For all the above reasons, I reject the appeals and liability remains with the appellant company.

Pitting yourself against the state in an unorthodox manner (Mr Mustard will leave you to read between the lines as to his meaning) is likely to end badly as any of your vehicles can be seized once any of these 62, yes 62, PCNs reaches a bailiff. This is not the kind of motorist that Mr Mustard wishes to help.

Finances not looking so hot either, cash flow is already under strain.

End.