Decision

Decision for PCH Transport Ltd

Published 21 October 2022

0.1 EAST OF ENGLAND TRAFFIC AREA

1. DECISION OF THE DEPUTY TRAFFIC COMMISSIONER

2. PUBLIC INQUIRY HELD ON 9 AND 16 SEPTEMBER 2022

2.1 OPERATOR: PCH TRANSPORT LTD LICENCE OF2012369

3. Background

3.1 Licence details

PCH Transport Ltd holds a goods vehicle standard international operator licence for four vehicles and four trailers, granted in June 2018. There are four vehicles specified on the licence. The authorised operating centre on the licence is at Prologic Services Ltd, Felixstowe IP11 4HQ. The transport manager on the licence until his resignation in June 2022 was Keith Fallon.

3.2 Previous history

“Propose to revoke” proceedings were commenced against the company’s licence in January 2019 as it appeared that the company did not have permission to park at its then operating centre. Subsequently the company applied for a variation to use the operating centre at Prologic Services Ltd in Felixstowe. The application was granted, with a warning about the importance of adhering to the terms of the operator licence.

3.3 Further variation application

On 6 February 2022 the company applied to increase its authority to eight vehicles and eight trailers. This proposed doubling of the fleet triggered a DVSA maintenance investigation in March 2022.

DVSA investigation

After carrying out this investigation, DVSA vehicle examiner Ashley McDonagh reported that:

• the authorised operating centre at Prologic Services Ltd had not been used since at least November 2021 and the company was at present operating from an unauthorised centre nearby;

• no preventative maintenance inspection sheets were available for trailers;

• there was no evidence of any electronic or wall planner: the operator relied on the maintenance provider to tell it when inspections were due;

• preventative maintenance inspection records showed numerous driver detectable defects such as tyres with low tread and lights mot working. Driver defect reporting appeared to be ineffective: such issues should be picked up daily by drivers and rectified straight away, not await the next eight-weekly inspection to be identified and addressed. The daily walk-round inspection sheet was inadequate;

• there was no written maintenance agreement with the contractor;

• there had been two prohibitions of vehicles and three of trailers within the past 18 months;

• there was no evidence that the nominated transport manager Keith Fallon was exercising the required continuous and effective management. The director’s son, Modestas Chockevicius had told VE McDonagh that he (Modestas) conducted the day to day running of the company and the transport manager was only used when contact with DVSA was required.

4. Public inquiry

4.1 “Propose to revoke” and call-up letters

In the light of this report, a “propose to revoke” letter was sent to the company on 5 May 2022. Transport manager Keith Fallon was also written to on the same date, to inform him that the senior traffic commissioner was considering the removal of his good repute.

The company responded requesting a public inquiry. Mr Fallon evidently resigned as transport manager (although he did not contact the traffic commissioner’s office), as the company submitted an application to nominate Ramunas Butkus as transport manager in early June 2022. A period of grace was given to the operator until the date of the public inquiry, when Mr Butkus’s nomination could be considered.

The requested public inquiry was duly arranged to take place in Cambridge on 9 September 2022. Call-up letters to the company and to Keith Fallon were sent on 5 August 2022.

4.2 Financial information and maintenance records

The company submitted in advance its maintenance and drivers’ hours records and the evidence of financial standing for eight vehicles, which had been requested. In preparing for the inquiry, I noted that the driver defect report form, criticised by DVSA as inadequate, had not been changed. Preventative maintenance inspection records continued to show driver detectable defects. There was a huge amount (several thousand kilometres) of missing mileage (miles driven with no tachograph card in the vehicle unit) and there was no evidence of any analysis of drivers’ hours data being carried out or infringement reports generated. I also noted that drivers appeared to be taking weekly rest in the cabs of their vehicles, contrary to the ban on taking regular weekly rests in the vehicle which was introduced in August 2020.

I looked at the three bank statements produced to show financial standing for the eight vehicles applied for. The statements purported to cover the three month period 17 May to 16 August 2022. However, I noted that the statement for the period 17 July to 16 August showed a “start balance” dated 17 November. Upon closer inspection, the details of the transactions referred to cash machine withdrawals and online payments with dates in “November”. The other two statements contained descriptions referring to transactions in September and October. The supposed transaction dates of May, June, July and August 2022 had clearly been applied by scissors and paste: several were clearly out of alignment and the “join” was visible. The bank statements were clear and obvious falsifications.

4.3 Public inquiry

The public inquiry took place in Cambridge on 9 September 2022. Present were company director Petras Crockevicius, son Modestas Crockevicius and prospective transport manager Ramunas Butkus. Previous transport manager Keith Fallon had written to my clerk on 8 August 2022 to say that he had retired owing to ill health and would not be attending.

I asked Petras Crockevicius about the bank statements provided and suggested that they were false documents. Both he and Modestas Crockevicius denied that this was so, but could not explain why, for instance, a statement purportedly covering the period 17 July to 16 August 2022 would refer to start balance dated 17 November and contain detailed descriptions of transactions taking place in November.

I asked about previous transport manager Keith Fallon’s involvement. Modestas Crockevicius said that he had physically attended the company’s premises only once. Otherwise, contacts had been by phone, when Mr Fallon had said that they were doing well.

The operator accepted that driver defect reporting was still unsatisfactory. It would try to make sure this improved. Modestas Chockevicius explained that drivers came across for three weeks or so at a time from Lithuania and stayed overnight in their cabs during that period. He stressed that cabs were equipped with beds but was not aware of the rule which prevented drivers from sleeping in cabs for their regular weekly rest (which they would have to take at some stage during a three-week period).

Because director Petras Crockevicius’s English was very poor (although he had not requested interpretation), I adjourned the hearing at this stage in order to give him the opportunity of speaking and listening with the assistance of an interpreter. This was arranged for 16 September, when the inquiry reconvened in Cambridge.

4.4 Reconvened inquiry

Present on 16 September 2022 was Petras Crockevicius only. Just after midnight on 16 September my clerk received an email from Ramunas Butkus to say that, owing to his “big concern with PCH Transport Ltd’s good repute, financial standing, vehicles and drivers’ competence” he was withdrawing his application to be transport manager on the licence and would not be attending. Modestas Crocevicius had unspecified “family problems” and did not attend either.

The company had, as requested, supplied fresh statements for the period 17 May to 16 August 2022, stamped by the bank. These statements showed an average balance of £2,600 over that period, a somewhat different picture to the average of around £30,000 which the falsified statements originally presented had shown. The newly provided statements also showed that the balance had frequently gone below zero and that, as a result, ten direct debit payments to creditors had not been honoured over the three month period.

I asked Petras Crockevicius why the new set of statements provided showed such a marked difference from the previous set. He continued to insist that the company had not falsified any documents. It must have been the accountant who had provided the false statements. Eventually he accepted that the accountant had been asked to provide “good statements” in support of the application for eight vehicles. He had not looked at them before submitting them in advance of the 9 September inquiry.

I asked about the real involvement of Petras Chockevicius in the business, noting that DVSA had dealt almost exclusively with Modestas Chockevicius. Petras Chockevicius said that Modestas managed the “organisation of the transport” while he (Petras) looked after the technical condition of the vehicles and occasionally drove. Asked specifically to comment on the potential outcomes of revocation and disqualification, he asked for one more chance to get things right.

5. Findings

In the light of the written and oral evidence presented, I make the following findings:

• the company has used an unauthorised operating centre, moving from the authorised one in or before November 2021 (Section 26(1)(a) of the 1995 Act refers). The company has previously been warned (in 2019) about the unauthorised use of an operating centre and the importance of adhering to the terms on the licence;

• the company’s vehicles and trailers have incurred prohibitions (Section 26(1)(c)(iii) refers);

• the company has failed to keep its promise, made on application, that trailers would be inspected every eight weeks (Section 26(1)(e) refers);

• the company has failed to fulfil its undertakings that drivers would report defects in writing and that it would ensure that rules relating to drivers’ hours and tachographs would be observed (Section 26(1)(f) refers);

• the company has undergone a material change in that it no longer has the required level of financial standing (Sections 26(1)(h) and 27(1)(a) refer);

• the company is without a transport manager (Section 27(1)(a) refers).

I further find that the company has falsified bank statements in an attempt to show financial standing for eight vehicles when the true financial position is that it lacks the funds even to support one vehicle. Falsification of bank statements undermines the trust that must exist between operator and traffic commissioner: it is not the act of a company of good repute. I attach no credibility to the claim made by Petras Crockevicius that the falsification was carried out by the company’s accountant. It defies credulity that a chartered accountant would carry out such an unprofessional (and criminal) act. In any case, the responsibility for submitting a clearly false document lies firmly with the operator.

6. Conclusions

The DVSA’s report showed a very poor level of compliance with vehicle roadworthiness requirements. It transpires that the transport manager was almost entirely absent, from the inception of the licence in June 2018 until his resignation four years later. This goes some way to explaining the poor level of compliance. The company must have known that operating without a functioning transport manager, using him only to deal “when contact with DVSA was required” was in contravention of the legal requirement that the transport manager “continuously and effectively manage the transport activities of the business”.

Given that the previous transport manager was a cypher and the transport manager nominated as a replacement has resigned and wishes to have nothing further to do with the operator, a conclusion that the operator lacks the required professional competence is inevitable (Section 27(1)(a) refers).

In addition, the operator lacks the required financial standing, even for its existing number of vehicles let alone the increase applied for. Worse, it has attempted to conceal this fact by falsifying bank statements and denying (in the face of all the evidence) any responsibility for this (Section 27(1)(a) also refers).

Owing to the attempts, described above, to operate without a transport manager and to conceal the true financial position of the company by forging documents, I further conclude that the operator lacks the required good repute. (Section 27(1)(a) also refers).

There is nothing meaningful to put on the positive side of the balance. In any case, revocation of the licence is mandatory for a company lacking professional competence, financial standing and good repute. Given the operator’s conduct, a further period of grace would be completely inappropriate.

7. Decisions

7.1 Operator licence

I am therefore revoking the licence, pursuant to Sections 26(1)(a), (c)(iii), (e), (f) and (h) and Section 27(1)(a). The operator has already had a period of grace in advance of the inquiry and, such is the level of its deceit and of my concern that its financial situation is incapable of providing the required level of support even for one vehicle (with potential consequences for the safety of other road users and for fair competition), I am bringing the revocation into effect immediately.

7.2 Transport manager

Keith Fallon, by the operator’s own acknowledgement, has failed to exercise continuous and effective management. He only attended the operator’s premises once in four years. The inadequate maintenance documentation, ineffective driver defect reporting system and complete absence of any drivers’ hours records are the unsurprising result of his neglect. He has simply been a name on a licence, giving the operator the outward sign of professional competence when the reality was otherwise. Mr Fallon’s good repute cannot possibly survive this level of neglect. His refusal to appear at the public inquiry has prevented him from presenting any mitigating arguments. I conclude that his good repute is lost, pursuant to Schedule 3 of the 1995 Act and I must accordingly disqualify him from acting as a transport manager under any operator licence in the future (paragraph 16 of Schedule 3 refers). The disqualification is indefinite.

7.3 Disqualification under Section 28 – operator

I have considered whether to disqualify the company and Petras Chockevicius, under Section 28 of the 1995 Act, from holding or obtaining an operator licence in the future. In doing so, I have taken account of paragraph 105 of the Senior Traffic Commissioner’s Statutory Document 10. This suggests a period of disqualification of between five and ten years in serious cases, and in severe cases, where falsification has been involved, possible indefinite disqualification. Because of the deliberate and pre-meditated falsification of bank statements, designed to conceal the parlous state of the company’s finances (insufficient to support even one vehicle) and to deceive the authorities, and because of the company’s failure to come clean and admit to any degree of blame for this falsification, I am imposing a disqualification period of seven years. This is not a company or director who should be allowed back into the industry before a very considerable period of time has elapsed.

7.4 De facto director

There was a significant amount of evidence to suggest that Modestas Chockevicius is a de facto director of PCH Transport Ltd, even if he does not appear as a director on Companies House records. He dealt largely with DVSA and led for the operator at the inquiry on 9 September. Petras Chockevicius described Modestas as being responsible for the “organisation of the transport” while he himself seemed to play a subsidiary role. Even when Petras Chockevicius had the benefit of an interpreter when the inquiry reconvened on 16 September it was clear that he had little or no idea of the responsibilities of an operator or the issues raised in DVSA’s report.

I am minded to conclude that Modestas Chockevicius has been acting as a de facto director of the company and thus to disqualify him along with his father. However, I did not give him notice in the call-up letter that I was contemplating such a finding (there was insufficient evidence at the time to do so). I will therefore refrain from determining the issue now, but will give Modestas Chockevicius an opportunity to make representations and/or appear at a further hearing before coming to a decision on whether or not to disqualify him.

Nicholas Denton

Deputy Traffic Commissioner

20 September 2022