You need to read onto the next page, page 10, second paragraph.
Although it is badly worded, I interpret the final sentence of that paragraph as only modifying the previous sentence, and not the entire paragraph, such that PFs can be charged, in PF areas, on unilateral (i.e., without prior permission) usage of standard class tickets in first class accommodation.
Clearly, a passenger would indeed be liable for a PF if using an standard class Off-Peak ticket to travel in first class in a PF area.
The alternative interpretation would effectively invalidate the first sentence of the paragraph (which limits a passenger's civil liability to only payment of an excess fare), and mean that PFs could always be charged (in PF areas) to passengers using time-restricted tickets at barred times, or on otherwise permitted routes barred by the ticket routeing.
There is nothing in the notices and publications of Off-Peak tickets suggesting that PFs can be charged when an otherwise valid ticket is used at the wrong time and there is no reason why the ticket is invalid (railcard conditions may (and do) provide that tickets used without accompanying railcards are wholly invalid such that the passenger may be PF'd in PF areas, but that is another matter entirely).
The statutory basis for Penalty Fares are the Penalty Fares Regulations and Rules made under the Railways Act 1993 as amended.
Rule 7.6 states:
An authorised collector must not charge a penalty fare to a person whose ticket is not valid only because of a published
restriction, as described in condition 12 of the National Rail Conditions of Carriage.
The wording: "
An authorised collector must not charge a penalty fare to a person whose ticket is not valid only because of a published
restriction" seems to be to be pretty clear and definitive, regardless of any ambiguity in Condition 12 itself.
DfT guidance on the Penalty Fares Rules also states that PFs must not be charged in these specific circumstances.
Of course, if there was some other additional reason why the (Super) Off-Peak ticket was invalid besides a "published restriction as described in Condition 12" (wrong class, no railcard, out of date, parts of return ticket used out of sequence, re-used, used so as to illegitimately double back, overdistance, not on a permitted route at all) then a PF could be issued.
Furthermore, I believe at least two resident RPIs have confirmed in this forum that PFs cannot be charged
solely because a (Super) Off-Peak ticket is time-barred, and there was a reported incident (I can't immediately find the link) where a passenger succeeded with an appeal against a PF in such circumstances.
Finally, a member of staff is not obliged to sell an upgrade if a passenger has previously passed an opportunity to upgrade his or her (Super) Off-Peak ticket, but may choose to report for consideration of prosecution. There seems to be little doubt that a 'byelaw 18' prosecution would succeed in such circumstances, since the passenger has failed to produce a (wholly) valid ticket on demand.
The passenger's answers, and actions, may well incriminate himself or herself further, potentially opening the way to a prosecution for fare evasion.
