Decision

Decision for Connor Construction (South West) Limited (OH1105554) and Nicoleta Graves, Transport Manager

Published 26 April 2021

0.1 CONNOR CONSTRUCTION (SOUTH WEST) LIMITED (OH1105554)

0.2 NICOLETA GRAVES: TRANSPORT MANAGER

1. PUBLIC INQUIRY IN BRISTOL

1.1 2 NOVEMBER 2020

2. BACKGROUND

Connor Construction (South West) Limited is the holder of a standard national goods vehicle operator’s licence authorising the use of nine vehicles and three trailers. The sole director and shareholder is Mr Ian Webb, Ms Nicoleta Graves is the transport manager, appointed in February 2019. An application was submitted on 18 July 2019 to increase authority to seventeen vehicles and twelve trailers. Interim authority was requested because “The operator requires the increase in vehicles to service a contact. At present, vehicles are being swapped on/off the licence daily to meet business needs.” At the time, DVSA had underway a joint Vehicle Examiner and Traffic Examiner investigation. For that reason, interim authority was refused pending the outcome.

The DVSA investigation had begun in May 2019. Vehicle Examiner Gary Ford found significant failings with the maintenance systems. Traffic Examiner Amy Comer found shortcomings with the drivers hours and tachograph systems, that the operator had more vehicles in possession than authorised and that, on some occasions, the tachograph evidence showed vehicles being operated when not specified.

These matters were referred to me and I called the operator to public inquiry on the following grounds:

under Section 6 of the Act, that more vehicles than authorised were being operated

under Section 26(1)(a) of the Act, that the operator had used an unauthorised operating centre

under Section 26(1)(e) of the Act, that statements made when applying for the licence, specifically in relation to parking and maintenance, were either false or not fulfilled

under Section 26(1)(f) of the Act, that undertakings had not been honoured in relation to the fitness of vehicles, observance of drivers’ hours rules, keeping of records and driver defect reporting

under Section 26(1)(h) of the Act, that there had been a material change in the company’s control

under Section 27(1)(a) of the Act, that the operator was no longer of sufficient financial standing, professional competence or good repute

The variation application was also called to be considered at the public inquiry.

Ms Nicoleta Graves was called to the inquiry to consider her good repute as transport manager.

The operator fully complied with the Covid operating directions. Due to the age of the case coming to inquiry, compliance documentation was made available to DVSA two weeks in advance and both examiners were able to provide updates from it. I am grateful to all parties for their assistance in what are difficult times to hold public inquiries.

3. THE PUBLIC INQUIRY

Ian Webb, John Richards and Nicoleta Graves attended for the operator represented by Laure Hadzik, Backhouse Jones Solicitors. Vehicle Examiner Gary Ford attended in person; Traffic Examiner Amy Comer attended by Microsoft Teams, appearing in the room on a large-screen Microsoft Surface Hub. I am content that all parties were adequately able to participate and that fairness was not impaired.

I had been provided with an audit report by RHN Consultancy. I indicated that I had a number of questions in relation to his report but was told that he was unavailable to attend

Proceedings were recorded and a transcript can be produced as required. I do not record all the evidence here, only that which is necessary to come to a decision.

3.1 Preliminary matters

Financial standing was satisfied both for the current authorisation and for the application.

3.2 The evidence of Traffic Examiner Amy Comer

Ms Comer adopted her statement. The background had been intelligence received that suggested the operator was using red diesel and incorrectly taxing vehicles leading to a visit on 15 May 2019. Ms Graves had told her that goods vehicles were running on white and plant vehicles on red. Ms Comer had been unable to take that allegation any further. She could not comment on whether the vehicles described as “tar sprayers” would be correctly termed “plant” without seeing them. However, simply being a tar spraying vehicle did not necessarily mean that it was not a goods vehicle. There had been no plant-type vehicles in the yard on the day of her visit.

There had been an allegation of an unauthorised operating centre and that vehicles may have been hidden there that day. The site that was visited was a satisfactory authorised operating centre. Ms Comer had been unable to pursue that line of investigation. There was no evidence to support the allegation. Ms Comer believed that the undertaking to conduct gate checks on vehicles had not been complied with.

Ms Comer confirmed that the operator had both more vehicles in possession than authorised for and that more were on the road in use at any one time. There were a number of missing records when vehicles were not specified, also PMIs when not specified. She had seen one invoice that indicated that the vehicle may have been hired out. She was not satisfied with the evidence, but neither could she say that the invoices were false. On the occasions when vehicles were operated when not specified, it was not known whether there was any space on the licence. Analogue tachograph records were missing which made it impossible to know who had operated the vehicle. If the hire agreement was legitimate, it would be impossible to know whether the vehicles were being used without a tachograph or whether their use did not need one. Connor Construction had continued to carry out the PMIs.

Only two analogue vehicles were in use. The offences identified (page 87 of brief) had become apparent both at the visit and thereafter. Some were basic such as drivers not recording any other work, the 40km block trace should have been identified and sent for calibration, there were missing records. The offences arose during 2018.

In relation to the most recent update report, the raw data for redacted was missing. The data produced by the operator was in a printed format. The data that was provided was via link to the RHA portal. Ms Hadzik noted that Mr Nugent (RHN Consultancy) had accessed the data in the same way and found the data. It appeared the operator had followed the proper management processes as evidenced by the reports provided but it could not be confirmed without access to the raw data. It appeared that driver Dixon had driven without a card on 30 September 2020 to hide a daily rest offence but that couldn’t be verified without the raw data.

No driver card data had not been received for a significant number of drivers and no driver files had been provided for a further significant number of drivers and no raw driver card data for those drivers either. Their names were established from the vehicle unit data. The time sheets didn’t provide any information on start or finish times, just “yard duty” or night shift. On the days where a sheet showed “yard duties” predominantly there had been no in-scope driving but those duties should still have been recorded on a tachograph card or chart. If Ms Graves was inputting the data manually to the RHA system, it was an acknowledgement that she was aware that the drivers were not recording them. Ms Comer couldn’t verify compliance because there was no recording of times on timesheets. Driver Davis had worked seven consecutive days which was evidence by timesheet and tachograph evidence. That was on 14 June 2020 and comprised seven nightshifts.

I asked Miss Comer when she accessed the recent raw data. She had been sent a link to a Trutac Sharepoint link. It was sent on 20 October and Miss Comer accessed it on 22 October. Miss Comer then confirmed that there were no manual entries on the tachographs for any drivers, although not all would need to use the facility if they were using the tachograph and mode switch properly. Drivers were not recording any other duties when their tachograph card was not in the head.

This shortcoming had not been picked up in the RHN report. If RHN had seen the raw card data for redacted, he had failed to identify the insufficient daily rest offence or the falsification that had been found by the transport manager. I referred Miss Comer to page 12 and 13 of the RHN report which had missing mileage accounted for as workshop use and for which for some there were a significant number of kilometres. Ms Comer told me that the operating centre was large and, due to the access road, if a road test had taken place it could be some distance before they could turn round again.

3.3 The evidence of Vehicle Examiner Gary Ford

Mr Ford adopted his maintenance report. There had been one further encounter since his original report. Vehicle redacted was encountered on 12 June 2019 and issued with an inspection notice for a malfunction warning lamp illuminated.

Miss Hadzik confirmed with Mr Ford that he had left only the PG13F&G document with the operator and the full maintenance report in 2019 had only been seen by the operator as part of the public inquiry brief. In relation to redacted, there had been an invoice from K Taylor which had a description “investigate indicator warning lamps” with rectification of “remove tell-tale warning lamp for trailer but leave other one”. The operator had responded. Mr Ford was referred to the operator’s explanation, page 66 of the bundle. The response addressed the concern but gave rise to another issue in that the wording on the PMI sheet was inadequate. In relation to redacted, the vehicle had been removed from the o-licence in November 2016 but MOT’d January 2017 and 2018. The operator’s response was that the vehicle had been hired to redacted and Mr Ford was satisfied with that.

Mr Ford was still concerned with wheel torque procedures and tyre pressure abnormalities which were still prevalent. In 2019, the tyre pressure issue was with K Taylor but it continued to today’s date with other maintenance providers. Mr Ford could not understand why tyre pressures could not be correctly recorded. Mr Ford had just completed a 7-day police tyre forensic. The variation on the PMIs was as great as 30 psi. A tyre running 22psi below its proper pressure would degrade. Vehicles were leaving the workshop after PMI with a variation of up to 30psi on different occasions. Such a significant difference was detrimental to the tyre.

On his update report, Mr Ford had to make some assumptions as to who was undertaking PMIs as he had not had the opportunity to speak to the operator. There was no name of a maintenance provider on the standard RHA forms. It was clarified that the technician, Mr Curtis, was self-employed but worked only at the operator’s premises and for this operator. It was Mr Curtis who exhibited the marked variability in the tyre pressures recorded.

Mr Ford told me that a full systems audit in December 2018 identified that no wheel torque procedure was in place and was highlighted as a priority action. On 15 May 2019, Mr Ford has advised the operator that not all maintenance providers were complying with the industry standard BS AU 50 procedure. On 8 August 2019, a full systems audit said “there was evidence of emails to service providers setting out our service level agreements for torque and retorque of tyres”, on 4 February 2020, a full-systems audit identified that Kev Taylor and Farnborough Tyres were not complying with the terms of the SLA – priority action required. So from December 18 to February 20, the operator has the same problem. None of the records provided recently included any from Kev Taylor. The recent RHN audit identified that there was a policy and referred to some wheel retorque notices. Mr Ford had seen some of the notices in the recent records but not from Farnborough Tyres or Kev Taylor.

I referred Mr Ford to page 8 of his latest report where he had discussed a defect on a trailer. On 9 March, trailer failed roller test, parking brake at 15%, the minimum being 16%. The sheet is endorsed that after fitting a brake chamber, the trailer achieved 16%. Mr Ford noted that a brake chamber actuates the service brake not parking. Sixteen percent was minimum standard only and left residual concerns. On the actual readings, some had got worse and there had been more load added. Further examination was required. The same trailer had tyres varying between 90 – 120 psi.

Mr Ford clarified that the reports relating to redacted coupled to redacted referred to on page 8 of the update were driver defect reports. They were annotated repeatedly “same list as last week” and “all defects rectified”. Another trailer had a defect of “N/S brakes stuck on”. The action taken was “Free off”. No detail was given of why the brake was stuck on or what rectification was taken.

There were sixteen vehicles on the wall-planner marked o-licence and a further thirteen mostly 18 tonners. Some vehicles were only on the licence for 2-3 days at a time. All vehicles were specified when inspected.

Ms Hadzik clarified whether the gate-check audits were being undertaken. Mr Ford confirmed he had been given evidence of some gate checks which, with some development, could be effective. There was currently a lack of detail.

3.4 The evidence of Transport Manager Nicoleta Graves

Ms Graves took up post on 3 December 2018. She had been transport manager previously from August 2015 to October 2017. Much of the period covered by the initial investigation was when she was not transport manager and was working elsewhere. She was employed full-time.

Spraying tankers are used for road construction. They used red diesel. Those vehicles are on the maintenance planner and maintained as a normal HGV. They are 18 tonne and spray tar. Colas delivers tar to the yard and they fill up there and take the tar to site. The vehicles cannot be used for anything else apart from the tar.

Ms Graves first saw TE Comer’s report with the public inquiry brief. She had not been made aware of the issues with tachograph analysis previously.

Some of the missing records related to people who were not drivers. Ms Graves told me that some were not drivers for Connor Construction. Three redacted were technicians at Ford or Mercedes. Hughes had started with the company at the end of August. Jackson works in the gang and drives occasionally for cover. The same was true of Weeks, Impey and Nix. Aldred had left the business in May 2020. Prior was a fitter. Hill had hired a vehicle and had his own licence. Cave left the business in June.

There had only been two analogue vehicles. They were now all digital. The time sheets were just to see where the drivers were. They were paid a flat rate for a shift which is why times were not necessary. In relation to handwriting differences, Ms Graves wrote some of the timesheets herself and inputted them on the driver calendar. If a driver was exclusively in the yard, then they only filled in a timesheet. The timesheets were solely for the accountant’s use. The RHA had said it was OK not to do manual entries but had not said so in writing.

She had spoken to driver Davis about the weekly rest offence. He admitted that it was an error. He thought he had taken his card out earlier than he had. He thought the 21-hour, 30 minute brake was 24 hours. Ms Comer felt that was not plausible. He finished his duty at 23:54 on 17 June and re-entered it at 21:24 the following day. I similarly expressed disbelief and asked how the company could roster a driver to work seven consecutive nights. Ms Graves couldn’t recall what they were working on. Mr Davis does not have regular infringements.

When drivers drop plant, they park in the road closure, a supervisor will say it’s fine. Sometimes the road closure has to be made bigger and drivers have to move on. I asked why the card was removed when the drivers took rest. Ms Graves couldn’t explain. From now on, the cards would be kept in. I put it to Ms Graves that the drivers removed their cards because of the likelihood of needing to move and were committing simple false records. Ben Smith and redacted on 1 July 2020 had been at Lakenheath Airfield. The driver had driven to the airfield and been told to stay there, then someone else will have told him to move. The driver would be taking his daily rest. The drivers have now been told that they should record the movements but they hadn’t. I referred to an example where the driver had relocated 34km in 78 minutes. Ms Graves maintained that it was just to leave the airfield. I commented that I was not aware of any airfield that was 34km long.

Ms Graves used the tracking system to see where the vehicle had been. She had spoken to the driver. The RHN report had explanations which had come from Ms Graves’ missing miles report. Ms Graves hadn’t dealt with a more recent incident. She hadn’t returned to the office until 24 August 2020.

Ms Hadzik took Ms Graves to the maintenance matters. The maintenance had been moved back in-house in January to March 2020. Some vehicles are back with K Taylor from September. The plan is to do all maintenance in-house in the future. Ms Graves was unable to assist on the tyre pressure point raised by VE Ford. Indeed, she was unable to assist to any real effect with any of the maintenance matters.

Ms Graves told me that it was her responsibility to move vehicles on and off the licence. The vehicle would be specified and used in the same day. The tar sprayers had been IVA’d as plant. There were sixteen other goods vehicles in possession that would fall within scope of operator licensing.

3.5 The evidence of Ian Webb, Director

Mr Webb told me that the business was major road constructions, some planned and some demand responsive, for example when a road had to be re-surfaced following a crash. There was also a plant-hire business It had taken a while to adopt to Covid working arrangements with extra vans being needed. It had initially reduced from 120 staff to 12. Work such as on airfields had dropped off significantly. Some businesses wanted to be seen as having shut. Very few vehicles had been used for a while.

The current position was that work programmes were now much shorter. A five-week programme was a long one now where previously it would be much longer.

Mr Richards had been recruited as Managing Director to take the pressure off him (Mr Webb); the queues of people outside his door had been overwhelming. The RHN report had proposed a new reporting facility for him to oversee. Ms Graves and Mr Richards would be responsible for the day-to-day operation. He had started a road-planing department but it had been a challenging market to enter.

Brake-testing was a key factor of the drive to bring inspections in-house. Lots of hours were being lost taking vehicles to the maintenance provider for inspection and separately for brake testing because of the need for a load. Mr Richards believes that the tar sprayers were allowed to operate on red diesel as plant. They were maintained, inspected and MOT’d as goods vehicles.

In relation to the drivers hours matters, he had written the letter with Ms Graves. He had stern words with drivers. Day-to-day he was not always in the office and could be anywhere in the country. The new monthly reporting process should show what needs addressing.

The loss of the o-licence would mean redundancies. They would not be able to haul their own plant machinery and that of others. The alternatives were not economically viable. The plant side of the business might need to shut down. The responsive work would go. It wasn’t clear if the business would survive.

A suspension would have a big impact. He would try to re-allocate drivers. If the licence were to be curtailed from nine to six, he would have to let a couple of guys go and to sell trucks. He would try to re-purpose people. He would have to choose what to walk away from.

Operating only nine vehicles without the flexibility to move vehicles on and off would impact. The issue would be with the road-planing machines. He would have to do a financial analysis. It would take time to assess the damage.

I reminded Mr Webb that he had previously said at public inquiry that he would sit the transport manager exam. He had booked it twice but had been too busy to attend. He had the home-study guide but not studied it. Previous transport manager Elaine Marks had been a driver. As manager, she felt pressurised. It was not a run of the mill operation. It was much more complex and fast-moving.

The tar-sprayers carry the product to the site. They are lorry-based with specialist equipment fitted. Mr Webb did not believe that the exemption for them had been removed. They were always MOT’d and inspected. They were exempt because they were single use.

3.6 The evidence of John Richards, Managing Director

Mr Richards previously worked for Tarmac and Aggregate Industries, then OCR Regeneration as operation manager. The company had recognised the need to make changes inside the business. The reporting structure for the workshop needed changing. The plan was for the foreman to report direct to him and he could address any tension between the foreman and the transport manager. He intended to take the transport manager CPC. He had taken a recent two-day operator licence training course. The plan was to have the workshop IRTEC accredited.

He was aware that Ms Graves sat down with the drivers every week and she hadn’t made that point. Driver defect reports were now checked periodically. Previously he had checked that a job-card had been raised and then closed. He had learnt that he should start with the PMI.

3.7 Closing submissions

Ms Hadzik offered to provide written submissions on the exemption status of the tar-sprayers.

There was no evidence of use of an unauthorised operating centre so that allegation fell away.

In relation to the breach of undertaking in respect of gate checks, Mr Ford had seen recent evidence that they had happened and there was no evidence that they had not.

In relation to incorrect taxation class, there was no cogent evidence that the vehicles were not a plant vehicle.

On maintenance, I needed to take in to account the Green OCRS. There had been no adverse encounters. All vehicles at the fleet check were clear. Changes were proposed including accreditation of both technicians and the workshop, and the new reporting structure so that Mr Richards would be direct manager of the foreman. There would be ongoing engagement of the consultant and monthly reporting.

The ongoing concerns of Mr Ford largely related to K Taylor – Mr Ford corrected that point – they persisted with the in-house maintenance. The wheel torque issues had been addressed, the tyre pressure was the in-house maintenance concern. Those matters can and will be resolved and addressed.

On drivers hours management, a primary area was the lack of manual records. Ms Graves had been led to believe that she was OK to complete those on the driver calendar herself. It was accepted that was not the correct position and would be addressed. The timesheets were largely redundant and not part of that process. The breaches of rules by drivers had been identified by Ms Graves. She will address the issue of movements and interruptions to rest periods so that there is a full audit trail.

There had been no deliberate attempt to operate in excess of authority. There was authority for nine and they had been transparent and moved vehicles on and off properly. Ms Hadzik submitted that the practice was legal and that the practice was common and widespread. It was designed to allow operators to have a fleet of various types of vehicles to operate flexibly. Discs had been returned to Leeds. The alternative was to hire vehicles. The company needed the sixteen vehicles.

The operator had been unsafe on the road so revocation was not appropriate. The company was more likely than not to be compliant. Some more robust systems were needed.

In terms of impact of action, Mr Webb had explained. The key area where suspension would be detrimental was the emergency work. Curtailment or refusal would depend on what needed to be specified. Undertakings were offered in relation to the workshop and staff and a future audit.

Written legal submissions would be provided by 13 November.

3.8 Legal submissions submitted via email Monday 16 November

Ms Hadzik explained that she had issues with her laptop on Friday 13 November. In the event, they were received first thing Monday morning so there was no material delay.

The submissions run to 14 pages and 77 paragraphs but can be quickly summarised as follows:

• The operator has twelve operational large goods vehicles of which two are spare. A further two are VOR awaiting sale. So ten vehicles appear to be needed.

• The company owns thirteen tar-sprayers. Five are on long-term hire elsewhere and one is a spare. Seven vehicles are needed to be operated.

• I am referred to HMRC Guidance Note 75 which refers to exemptions for tar sprayers

• No more than 9 goods vehicles had been operated at any one time and there was no evidence to contradict this, Ms Comer having seen a relevant hire agreement

• A breach would only occur of the operator was shown to be operating those vehicles in circumstances that required an o-licence

• The operator believed at the date of the inquiry that the tar sprayers were exempt

• It is accepted that “on the face of it”, the tar sprayers did not benefit from an exemption following the coming in to force of the Goods and Motor Vehicles (Miscellaneous Amendments) Regulations 2018/25, on 1 September 2018

• The Goods Vehicle Operator Licensing Guide was the only advice and still refers to the previous exemption

• There is a legal argument that the operator need not have authority for all the vehicles in possession

• If I do not agree with that position, the operator will submit an application to regularise the position and I am asked to provide sufficient time

4. CONSIDERATION AND FINDINGS OF FACT

Page 12 of the RHN audit identifies fifty-five occasions when an authorised vehicle is moved a distance of 5km or more without an appropriate card in the tachograph head. I do not know why the auditor has excluded shorter movements as interruptions to, for example, daily rests to move a parked vehicle will frequently be only 1 or 2 kms. Five kms is a high threshold to set.

The explanations given at page 13 make no sense. For example:

redacted, 1 July, “moved vehicle for parking”, 34 kms travelled and 76 minutes driven. It is hard to believe the driver had to drive over 20 miles to find somewhere to park

redacted, 2 occasions, 14 June, “Exeter Airport – requested to move plant from runway”. total 48 kms and 119 minutes. Exeter airport is not 48 or even 24 kms long. It is nearer 2 km.

Other explanations include “filling up with fuel”, clearly an in-scope activity. Ms Graves told me it was standard practice for drivers to remove their cards when taking a rest. Why? It is a process that risks generating the long list of missing mileage. Ms Graves’ investigation is seriously lacking. There appears to be no obvious follow-up question asked such as “Why didn’t you put your card back in to move it?”, “Did the movement mean that you didn’t get an uninterrupted daily rest?”. Of course such questions might have produced unhelpful answers.

The process for recording other work on days when the driver is not driving is also seriously flawed and makes it impossible from the tachograph data to establish whether proper daily and weekly rests are taken. It is also unlawful. Article 6(5) of EU Regulation 561/2006, as amended by EU Regulation 165/2014, states:

“A driver shall record as other work any time spent as described in point (e) of Article 4 as well as any time spent driving a vehicle used for commercial operations that do not fall within the scope of this Regulation, and shall record any periods of availability, as defined in point (b) of Article 3 of Directive 2002/15/EC, in accordance with point (b)(iii) of Article 34(5) of Regulation (EU) No 165/2014 of the European Parliament and of the Council1. This record shall be entered either manually on a record sheet or printout or by use of manual input facilities on recording equipment.”

Ms Graves claims to have been advised otherwise by the Road Haulage Association. There is no evidence of that. I find that Section 26(1)(f) is made out in relation to drivers hours and tachographs. I attach significant weight.

The maintenance failures are also capable of resolution and I am offered relevant undertakings. I simply do not understand the problem with recording tyre pressures accurately on first presentation for PMI and in setting them correctly thereafter.

The exception status of the “tar-sprayers” in relation to fuel remains unclear to me. Ms Hadzik’s reference to HMRC Guidance Note 75 assists to a degree. The relevant exemption is here:

8.18 Tar sprayer

A tar sprayer may use red diesel if it is constructed or permanently adapted, and used only for spraying tar on to the road or when going to and from where it is used for that purpose.

Hot boxes used to transport and maintain tar at a desired temperature do not qualify in this or any other category.

My interpretation of this is that the vehicle can proceed empty from the operating centre to the site. It cannot carry the hot tar, which is what I was told the vehicles did. In order for me not to find that the operator has been involved in a serious failure to pay duty on vehicles used in the carriage of goods on the road, I require the following undertaking:

• By 31 March 2021, the operator will consult with H M Revenue & Customs, providing them with a full description of the nature and use of the tar sprayers and a copy of this decision and request an opinion on whether or not the tar sprayers can use red diesel when travelling laden from the operating centre to site. A copy of that opinion together with a description of any necessary further actions will be sent to OTC Bristol by 15 April 2021

I am in a similar position in relation to the vehicle excise duty status of the tar sprayers. In order not to find that the operator has evaded vehicle excise duty, I require the following undertaking:

• By 31 March 2021, the operator will consult with DVLA, providing them with a full description of the nature and use of the tar sprayers and a copy of this decision and request an opinion on whether or not they are properly taxed as plant when travelling laden from the operating centre to site. A copy of that opinion together with a description of any necessary further actions will be sent to OTC Bristol by 15 April 2021

I accept that there is no evidence of use of an unauthorised operating centre.

The operator now accepts that the tar sprayers do not benefit from an exemption from operator licensing. The exemption was removed in September 2018. Ms Hadzik submits that the publicity at the time referred to the far more controversial previous use of volumetric concrete mixers. She further submits that the official published guidance does not refer to the change in exemption for these sorts of plant vehicles. I accept both those submissions. In relation to the tar sprayers, I find that they have been operated unlawfully and that the operator has exceeded its authorisation but that it did so in ignorance. I ask myself whether the operator should have asked more questions but, absent any knowledge that the legislative landscape had changed in their regard, whilst it is incumbent on the operator to keep up to date, I cannot find a high degree of fault. I therefore find that the breach in relation to the tar sprayers was inadvertent. I attach no weight to it.

The operator has openly had in possession more goods vehicles (excluding the tar sprayers) that authorised. Ms Hadzik argues that is permissible under the legislation. My consideration here is in relation to the sixteen vehicles that were in possession, being parked at the authorised operating centre, managed by the transport manager, maintained by the operator and used on a regular basis. There is no evidence either way whether more than nine vehicles were actually being driven on a road at the same time.

Being an engineer and a former policy-maker, my starting point is to consider the purpose of the licence specifying a maximum number of vehicles (and trailers) prior to an analysis of the legislation. It is helpful to consider each of the mandatory criteria in turn.

The maximum number of vehicles to be used aligns with the maximum number of vehicles to be kept when not in use at the authorised operating centre(s). That is subject to publication both by Traffic Commissioners and by the applicant operator in a newspaper that circulates in the vicinity of the operating centre. It allows all affected parties to consider the road safety and environmental impact, including of noise and visual intrusion, of the candidate operating centre and then for a Traffic Commissioner to make a decision. In doing so, the Commissioner will have in mind the differing impact of an operation of nine vehicles versus one of twenty-nine vehicles. Capacity of the operating centre, though not an issue in this case, is a clear and relevant concern. If, as Ms Hadzik contends, only the vehicles to be used on the road at any one time is the issue, then the capacity of the operating centre would not be relevant as, once at the operating centre, they would no longer be being “used” and so would not need to be specified and need not concern me. That is clearly totally illogical.

The purpose of financial standing has been considered by the Upper Tribunal on many occasions. In T/2012/17 NCF (Leicester) Ltd, At paragraph 12, it states:

1. The purpose of the requirement to be of appropriate financial standing is spelt out, in general terms, in recital 10 to Regulation 1071/2009, which provides: “It is necessary for road transport undertakings to have a minimum financial standing to ensure their proper launching and administration”. In our view ‘administration’, for the purposes of this Regulation, means the organisation and running of a haulage business which holds an operator’s licence. In particular the requirement is intended to ensure that vehicles can be operated safely because the operator can afford to maintain them promptly and properly.”

Careful consideration is given to the assessment of financial standing so that “the operator can afford to maintain them promptly and properly”. In the case of Connor Construction (South West) Limited, that assessment was conducted with in mind the operation of nine vehicles, not twenty-nine. The difference in the requirement is currently redacted. The proposition put forward by Ms Hadzik is entirely at odds with the longstanding consideration of a per-vehicle maintenance cost (note the requirement for access to financial resources is even more clearly spelt out for restricted licences).

Different types of operation will have different types of demands on a transport manager The EU legislation puts a cap on what an external transport manager can be responsible and the terms in which that is done are informative. Article 4(2)(c) refers:

in his or her capacity as transport manager, the person referred to in point (a) may manage the transport activities of up to four different undertakings carried out with a combined maximum total fleet of 50 vehicles. Member States may decide to lower the number of undertakings and/or the size of the total fleet of vehicles which that person may manage; and

The term used is total fleet, not vehicles in use. Accepting that Ms Graves is an internal manager and the 4/50 does not apply, the total fleet size is still a major consideration for a Traffic Commissioner considering whether a Transport Manager can exert continuous and effective management over a transport operation. Mr Webb’s evidence was that this was a more complex arrangement than most because decisions had to be made about which vehicles to be used, often at short notice. Those vehicles might then have to be specified and a further decision made about which vehicle to remove. It was clear from his evidence that Ms Graves was responsible for a much greater fleet than nine.

Applicants and operators are required to have satisfactory arrangements in place for certain matters. One of those is “for maintaining the vehicles used under the licence in a fit and serviceable condition”. Any assessment of those arrangements can only be made by a knowledge of how many vehicles are to be maintained. Ms Hadzik’s construction again prevents such an assessment from being effective.

I turn now to the legislation and note, but do not agree with, Ms Hadzik’s submissions on how the legislation should be read. Ms Hadzik promotes an instantaneous interpretation of the term used. A vehicle is only being used in her view, when it is actually being driven on a road and for the carriage of goods (paragraphs 39 – 47 of the further written submissions). If her position is to be taken, an operator is not operating a vehicle under authority of a licence when it is unladen.

I find differently. Section 2(1) of the Act states as follows:

(1) Subject to subsection (2) and section 4, no person shall use a goods vehicle on a road for the carriage of goods—

(a) for hire or reward, or

(b) for or in connection with any trade or business carried on by him, except under a licence issued under this Act; and in this Act such a licence is referred to as an “operator’s licence”

Ms Hadzik relies upon s.58(2) of the Act to conclude that a vehicle is only is scope when it has a driver. That provision states the following:

(2) For the purposes of this Act, the driver of a vehicle, if it belongs to him or is in his possession under an agreement for hire, hire-purchase or loan, and in any other case the person whose servant or agent the driver is, shall be deemed to be the person using the vehicle; and references to using a vehicle shall be construed accordingly.

To conclude that a vehicle need only be specified on a licence when it is being driven is not a reasonable finding from this clause. The purpose of s.58(2) is to define who has the legal duty to ensure that an operator’s licence is in force and so who commits an offence when one is not in use. To use it for any further purpose is inappropriate, particularly to define what “used” means. One need not look much further for that definition. It is found at s.58(3):

(3) In this Act references to vehicles being authorised to be used under an operator’s licence are to be read in accordance with section 5.

Section 5(1) provides:

(1) Subject to the following provisions of this section, the vehicles authorised to be used under an operator’s licence are—

(a) any motor vehicle in the lawful possession of the licence-holder (whether that motor vehicle is specified in the licence or not); and

(b) any trailer in the lawful possession of the licence-holder.

So a vehicle remains authorised on the licence whilst it remains in possession, whether or not an application has been made to de-specify it.

Sections 5(6) and 5(7) further assist:

(6) A motor vehicle which is not specified in an operator’s licence is not authorised to be used under that licence by virtue of subsection (1) after the period of one month beginning with—

(a) the day on which the vehicle was first in the lawful possession of the licence-holder, or

(b) (if later) the day on which the licence came into force,

unless, during that period, the licence-holder has given to a traffic commissioner a notice in such form and containing such information about the vehicle as is required by a traffic commissioner , and has paid the prescribed fee (if any) to a traffic commissioner .

(7) Where notice of a vehicle has been duly given and the prescribed fee (if any) has been duly paid under subsection (6), a traffic commissioner shall vary the licence by directing that the vehicle be specified in it.

It is submitted by Ms Hadzik that these clauses mean that any vehicle can be used under authority of a licence the instant it is specified on the vehicle operator licensing system (VOL). Of course, the legislation predates the digital age. Nevertheless it remains in place and precludes the immediate use of a vehicle when specified electronically. There has been no reason to change that as an operator has a month to specify a vehicle when it comes in to possession. It is helpful to read this clause with the subordinate legislation made under the Act, the 1995 Goods Vehicles (Licensing of Operators) Regulations 1995/2869. Regulation 23 states as follows:

(1) A traffic commissioner shall, when any motor vehicle to be used under a licence is specified in the licence, issue to the licence-holder a disc in respect of the vehicle.

(2) The disc shall clearly indicate (by colour or other means)-

(a) whether a vehicle is being used under a standard licence or under a restricted licence;

(b) in the case of a vehicle being used under a standard licence, whether the vehicle covers both international and national transport operations or [national transport operations only;

(c) where applicable, that the vehicle is being used under an interim licence, or pursuant to an interim direction, and in such a case, the date the interim licence was issued or the interim direction was given; and

(d) subject to paragraph (5)(b), the date on which the disc expires under paragraph (5)(a).

(3) The licence-holder shall, during such time as any motor vehicle is specified in the licence and whether or not for the time being the vehicle is being used for the purpose for which a licence is required, cause a disc appropriate to the vehicle to be fixed to, and exhibited in a legible condition on, that vehicle in a waterproof container-

(a) in the case of a vehicle fitted with a front windscreen, on the near side and near the lower edge of the windscreen with the obverse side facing forwards;

(b) in the case of a vehicle not fitted with a front windscreen, in a conspicuous position on the front or near side of the vehicle.

So it becomes clear that the vehicle cannot be used (apart from in the first month of its possession) until a disc has been issued and displayed in the screen and that this must be the ”appropriate” disc. When a vehicle is removed from the licence, the disc relevant to that period of time is required to be returned (Regulation 28) so must not be displayed at any future time. Discs are serial numbered and their period of validity is kept on the licence record on VOL. The use described by Ms Graves where a vehicle is used the same day as it is specified is unlawful.

Section 5(9) of the Act is on all fours with the current position (emphasis added):

(9) Where it comes to the knowledge of a traffic commissioner that a vehicle specified in an operator’s licence (“the first licence”) —

(a) has ceased to be used under the licence (otherwise than because of a fluctuation in business or because it is undergoing repair or maintenance), or

(b) is specified in another operator’s licence,

he may vary the first licence by directing that the vehicle be removed from it.

The changing of the specified vehicles on the online system is actually an application to a Traffic Commissioner to make that change. I do not have authority to remove a vehicle purely because it needs repair or because the business need today is a different one from the business need yesterday. It follows that the actions of the operator have been unlawful for a long time and should have ceased once that point was made by the Traffic Examiner and, at the latest, when I made the point clearly at the public inquiry. The operator has clearly used more goods vehicles than authorised. For the sixteen referred to as goods vehicles, I attach significant weight; for the 13 tar sprayers I attach negligible weight. Section 6 of the Act has been breached which is a material change and Section 26(1)(h) is made out.

Ms Hadzik refers to the Regulators’ Code and states that this change in policy of Traffic Commissioners has not been adequately publicised. I am afraid I am at a loss. I have been a Traffic Commissioner almost nine years and no such change in policy has occurred in that time. It could not have done so because the law is clear. She submits that it is common practice to have more vehicles than authorised. That is certainly not my experience. Best practice is to have a margin to allow for any fluctuation. Indeed, most auditors, including the RHA, will check that a suitable margin is in place. It is rare in my experience, save for owner drivers, that it is not. Of course, such practice is commonplace within PSV operations and that is facilitated by the discs not being vehicle specific and a generally different domestic legal framework.

Turning now to Ms Graves, I find that she has strengths, particularly in relation to the potential to manage drivers hours. She needs to be more thorough, more questioning and more robust. No-one need drive 34 km to find a parking space and that is not an acceptable explanation for driving without a card. Nor is refuelling. There are repeat offenders. She was unable to assist at all with roadworthiness matters. The good repute of a transport manager relies on them being able to exercise continuous and effective management of the transport operation. Ms Graves does not do that but, on balance, I find her good repute is tarnished but not lost. Section 27(1)(b) is therefore not made out. However, the extent of her role is insufficient and I do find Section 27(1)(a) made out, the operator is without sufficient transport management, para 8(2)(a) of Schedule 3 of the Act refers. A suitable remedy would be the addition of Mr Richards as a further transport manager.

There are positives with the operator. As submitted by Ms Hadzik, the on-road mechanical condition is not a cause for concern. I find that the addition of Mr Richards in particular is a positive one. Provided prompt and strong action is taken by the operator now, particularly in relation to transport management and the fuel and excise duty issues, I find that the operator’s repute remains intact.

I refer to the Senior Traffic Commissioner’s Statutory Document 10 and, in particular, the helpful Annex 4. In the positive, I have found that the tar sprayer issue was not a deliberate one. The on-road performance in relation to maintenance is not of concern. There are some effective management controls and I am told they will be improved. Mr Richards is a strong addition to the management team. Relevant undertakings are offered. There has been cooperation, including with the Covid directions. The operating centre appears suitable for the full fleet. The variation application was made in July 2019.

In the negative, the drivers hours management and, in particular, the failure to make manual entries and the significant driving without a card without full and effective intervention is a major road-safety concern. The persistence of the tyre pressure and wheel torque issues over a period of what is now years is unacceptable. The use of the sixteen goods vehicles with authority for nine provided a major competitive advantage and is grossly unfair for those operators who religiously maintain an operating margin. The transport manager could not assist with the roadworthiness matters and appears to be on a level with the workshop foreman rather than the person in overall charge of the transport operation. There has been a previous public inquiry.

Having balanced the positive and negative features, I find the starting point is “severe to serious”. Action which materially affects the operation is necessary and proportionate. In taking that action, I note that even operating all vehicles at the current level of authority will be problematic, marking as it does a reduction of between one third and two thirds, depending on whether I use the figures given to me by the company at the hearing or those in the further written submissions. I note that a suspension in particular would cause difficulties for the emergency road repairs. I am provided with no financial or contractual evidence to support the operator’s assessment of the impact of regulatory action.

5. DECISION

The operator has not satisfied me that the current systems are adequate to ensure that drivers hours and tachograph rules will be complied with nor are current transport manager arrangements satisfactory. The operator has not satisfied the requirements of Sections 13A (professional competence) nor 13C (systems for tachograph and drivers hours). The variation application is refused. A fresh application may be made.

Pursuant to adverse findings under Section 26(1)(e) and (h), the licence is curtailed to 8 vehicles and 3 trailers for a period of 1 month from 17 January 2021.

Pursuant to Section 27(1)(a), the operator is absent professional competence. A period of grace until 30 April 2021 is granted for the addition of an alternative or an additional transport manager.

Having been used inappropriately to operate more vehicles than authorised, the operator’s access to the VOL self-service system is removed with immediate effect.

Undertakings are recorded:

• By 31 March 2021, the operator will consult with H M Revenue & Customs, providing them with a full description of the nature and use of the tar sprayers and a copy of this decision and request an opinion on whether or no the tar sprayers can use red diesel when travelling laden from the operating centre to site. A copy of that opinion together with a description of any necessary further actions will be sent to OTC Bristol by 15 April 2021

• By 31 March 2021, the operator will consult with DVLA, providing them with a full description of the nature and use of the tar sprayers and a copy of this decision and request an opinion on whether or not they are properly taxed as plant when travelling laden from the operating centre to site. A copy of that opinion together with a description of any necessary further actions will be sent to OTC Bristol by 15 April 2021

• The operator will apply for IRTE Workshop Accreditation and submit evidence of doing so to OTC Bristol by 30 June 2021

• Two technicians will achieve IRTEC Heavy Vehicle Inspection Technician licences and submit evidence of doing so to OTC Bristol by 30 June 2021

• An audit shall be conducted by a competent independent person by 31 May 2021. The scope of the audit shall include systems for the management of maintenance, driver licencing, drivers hours and working time and the role of the transport managers in line with the requirements of EU Regulation 1071/2009 and STC Guidance. The audit report will be prepared, acted upon and retained for at least 2 years. A copy of the report together with the operator’s plans for implementing any recommendations will be forwarded to the Office of the Traffic Commissioner by 30 June 2021.

Kevin Rooney

Traffic Commissioner

23 December 2020