My take for formal reps:
I was parked as can be seen in the council's photos. I arrived at the location by passing a very clear Controlled Parking Zone sign which stated Pay and Display zone and proceeded to park immediately beyond this sign in a marked parking bay. I then looked beyond my car, saw a pay and display traffic sign and immediately paid for my stay. On my return I found a PCN which alleged that I was parked in a 'permit holders' only bay.
As I now know, this bay in fact commences prior to the Pay and Display(P&D) zone entry sign and is marked by its own traffic sign which is dwarfed by the adjacent P&D entry sign. The bay then extends into the P&D zone, but the council expects drivers to disregard these indicators and instead notice that the bay terminates prior to the pay and display traffic sign which I saw ahead and which lies clearly within a driver's vision. The junction between my bay and the pay and display bay is not signed as recommended in the Traffic Signs Manual i.e. with a traffic sign at the junction of the bays carrying two traffic signs indicating clearly the change of restrictions whose presence would remove ambiguity and ensure that drivers would then be alerted to the change in restrictions. Instead, the council relies upon road markings which are invisible from the footway when, as in this case, a car is parked so as to overshadow their presence.
Drivers know to look for traffic signs and do not carry a Sherlock Holmes-like magnifying glass to enable them to examine every inch of carriageway.
In my opinion the contravention did not occur because, having regard to all the on-site indicators, the council has failed to convey the restriction clearly.