Decision

Decision for MGT Logistics Ltd (OD2017117)

Updated 1 November 2021

WEST MIDLANDS TRAFFIC AREA

1. DECISION OF THE TRAFFIC COMMISSIONER

1.1 PUBLIC INQUIRY HELD ON 12 JANUARY 2021

1.2 OPERATOR: MGT LOGISTICSLTD

LICENCE OD2017117

2. Background

2.1 Operator details and licence history

MGT Logistics Ltd (“MGT”) holds a standard international goods vehicle operator’s licence (OD2017117) for four vehicles four nine trailers. There are four vehicles in possession. The licence was granted in October 2018, at that time for two vehicles and two trailers. The nominated transport manager, Raymond Sheaf, declared that he would be working four hours per week, on Saturdays, on the licence. This was in line with the Senior Traffic Commissioner’s guidance on the number of hours appropriate for a two-vehicle licence.

In September 2019 the operator applied for an increase to four vehicles and four trailers: this was duly granted in November 2019.

In May 2020 the operator applied for a further increase to ten vehicles and ten trailers. Included in the documents submitted during the application process was a letter dated 1 June 2020 from transport manager Raymond Sheaf in which he stated that he would be working 12 hours per week on the licence on Thursdays and Fridays but that he was also resigning as transport manager with effect from 1 July 2020 owing to a change in circumstances. The operator was looking for a replacement transport manager. MGT duly nominated Jagmohan Singh as the new transport manager on 4 July 2020: he was projected to work 12 hours per week on the licence.

The size of the requested increase triggered a desk-based assessment by DVSA. The operator was assessed as “unsatisfactory” on the maintenance side because it failed to provide any of the requested documents relating to driver defect reporting and only one preventative maintenance inspection report (for a trailer) over the six-month reference period. None of the requested information on brake testing was provided. The vehicle examiner concluded that owing to the paucity of the information provided he was unable to conclude that any of the required compliance systems were in place. Whether the failure to provide the information stemmed from a deliberate decision or a failure to understand the (simple) request, it was worrying in an operator which wished to more than double the size of its fleet.

3. Public inquiry

I was concerned by the result of the desk-based assessment and therefore called the operator and previous transport manager Raymond Sheaf to a public inquiry under (amongst others) Section 27(1) of the 1995 Act. The call-up letters were sent on 7 December 2020. The letter to MGT recommended that the new transport manager Jagmohan Singh also attend the inquiry to answer any questions relating to how he intended to respond to the desk-based assessment and manage compliance in the future.

The public inquiry took place in Birmingham on 12 January 2021. Marian Manole, Raymond Sheaf and Jagmohan Singh attended via MS Teams.

Previous transport manager Raymond Sheaf stated that until May 2019 he had met Marian Manole approximately every three weeks in a Costa Coffee café to go through maintenance and tachograph records. At that point Mr Manole had gone on holiday to Thailand and had never contacted him again: Mr Sheaf had thought the company had become dormant. He had not realised that, far from being dormant, it had actually increased its authority from two vehicles to four in autumn 2019.

I noted that Mr Sheaf had submitted a letter on 1 June 2020 in support of the application for an increase to ten vehicles. That letter had given the impression that he was still very much involved with the licence and would continue to be so until 1 July 2020 when his resignation would take effect. Mr Sheaf accepted that his letter was disingenuous.

Mr Manole stated that he had not properly understood the request from DVSA’s desk-based assessment team. He had submitted full driver defect report and preventative maintenance inspection documentation for the inquiry. I noted that many of the PMI sheets lacked a signature signing the vehicle off as roadworthy. PMIs were carried out by a mobile mechanic who lacked access to brake testing equipment. Mr Manole said that vehicles had been recently given a roller brake test and that this would be the regular practice in the future. Pressed as to why he had in practice operated without a transport manager from May 2019 to October 2020 (when Mr Singh had started), Mr Manole said that he had tried to reach Mr Sheaf several times during that period, but without success.

Mr Singh said that he had started to assemble the missing maintenance records in mid-October 2020. He had been informed of the public inquiry by Mr Manole only on Friday 8 January 2021.

I asked on what basis drivers were employed. Mr Manole said that they were limited companies.

In conclusion, Mr Manole said that he had worked very hard to develop his business from an owner/driver operation to four vehicles and was now ready to expand further. He undertook to comply from now on.

4. Consideration

MGT has operated without the required professional competence for a considerable period of time (May 2019 to October 2020). Even before May 2019 the nominal transport manager Raymond Sheaf never exercised the required continuous and effective management of the business – a meeting in Costa Coffee every three weeks is insufficient even for a two-vehicle licence. After May 2019 even this paltry level of contact ceased. The operator however, then successfully applied for an increase to four vehicles – an application which would never have been granted had the true situation been known. The lack of a transport manager was reflected in MGT’s wholly inadequate response to the desk-based assessment in summer 2020: it had not kept the necessary maintenance and driver defect records.

Operating without a transport manager constitutes a significant level of unfair competition to those hauliers who incur the expense of employing one, as well as posing a threat to the safety of drivers and other road users. The fact that MGT was prepared to operate without one for so long – in spite of the legal obligation of professional competence – and dishonestly sought to conceal this fact when applying for the increase to ten, poses a severe question mark over the question of whether it can be trusted to comply in future.

5. Findings

Mr Sheaf’s conduct has fallen far below that of a reputable transport manager. His level of involvement with this licence was always inadequate but vanished entirely more than a year before he got round to resigning from the licence and informing my office of the resignation. In so informing me, he gave the distinct impression that he had been continuously involved with the licence and indeed would be increasing his commitment to 12 hours per week. By remaining on the licence as transport manager after May 2019 despite the fact that he was not carrying out the transport manager’s functions and was not being paid Mr Sheaf gave the operator the outward sign of professional competence and compliance when this was very far from the case. A transport manager’s repute cannot survive such conduct and I therefore conclude that Mr Sheaf’s good repute is lost (Section 27(1)b) and paragraph 1 of schedule 3 to the 1995 Act refer).

I find that the operator has failed to fulfil its undertakings to ensure that vehicles are kept fit and serviceable and lawfully driven (Section 26(1)(f) of the 1995 Act refers). Vehicle BV13 PUH failed its MOT on 3 March 2020 on spray suppression, steering control and aim of headlamps, while the same vehicle was given a prohibition on 12 September 2020 for a tyre being cut to the chords. On the latter occasion an S-marked prohibition was also issued for the absence of any load security. The driver, director Marian Manole, was given a £100 fixed penalty for driving a vehicle in a dangerous condition.

I find that the operator failed to fulfil its undertaking to keep maintenance documentation and make it available on request to DVSA. The operator produced only one preventative maintenance inspection document in response to DVSA’s request, when it should have been able to present numerous documents for the six-month period requested.

I find that the operator knowingly operated without professional competence between May 2019 and October 2020, at a time when its fleet expanded from one vehicle (until 30 April 2019) to three vehicles (from 26 November 2019) and then four (from 3 March 2020). Although Jagmohan Singh has been engaged as transport manager since around October 2020, the fact that he did not find out from the operator about this inquiry until four days beforehand suggests that the level of communication between operator and transport manager remains less than close.

6. Balancing act

I carried out a balancing act. On the negative side were the above findings. On the positive side were the recent move to roller brake tests (although not always laden) and the fact that Jagmohan Singh has managed to put together (or find) more comprehensive maintenance records and driver defect reports and appears to be exercising closer management of the business than Mr Sheaf (although it was disconcerting that he was not informed of the public inquiry until only a few days beforehand). I have concluded that the long period of operation without the required transport manager (and the inevitable shortcomings in record keeping and safe operation which this gave rise to) far outweighs the more recent positive elements, which are partly promises for the future rather than long-established practice.

7. Priority Freight and Bryan Haulage questions

I posed the Priority Freight question of how likely it is that the operator will comply in the future. Given MGT’s record of being quite prepared to ignore something so fundamental as the need to employ a transport manager (and to seek to disguise this failure when applying for the recent increase), I conclude that the answer is highly unlikely. A negative answer to the Priority Freight question tends to suggest an affirmative answer to the Bryan Haulage question of whether the company deserves to go out of business. Because of its fundamental and long-lasting breach of operator licensing law I believe that its does.

8. Conclusions

8.1 Licence revocation

Because of the company’s conduct in operating without professional competence for some 17 months, I conclude that it has lost its good repute pursuant to Section 27(1)(a) of the 1995 Act. I am therefore revoking its operator licence with effect from 0001 hours on 12 February 2021 pursuant to that Section (as well as Sections 26(1)(f) and 27(1)(b)).

8.2 Company and director- disqualification

For the reasons outlined above, and having performed the same balancing act described therein, I conclude that the company and Marian Manole should be disqualified under Section 28 from holding a licence in the future. In deciding upon the length of the disqualification, I have taken account of paragraph 100 of the Senior Traffic Commissioner’s Statutory Guidance Document 10. This posits a starting point of between one and three years for a first public inquiry (which this is). Mr Manole is an owner/driver who has expanded too fast without considering or bothering with the legal requirements relating to operators: I do not think he is a fundamentally dishonest man. I have therefore decided upon a disqualification period at the lower end of the scale: 12 months. Mr Manole should use that period, if he wishes, to re-enter the industry, to educate himself on the legal requirements and obligations relating to operator licensing.

8.3 Transport manager – disqualification

Having concluded that Raymond Sheaf’s good repute is lost I must also disqualify him under paragraph 16 of Schedule 3 to the 1995 Act from being a transport manager on any licence. The disqualification takes immediate effect. Mr Sheaf has, through his negligence, enabled a company to operate and expand its HGV operations which should never have been able to do so. I am disqualifying him from acting as a transport manager for an indefinite period of time. If he wishes to act as a transport manager again in the future, he may begin to re-establish his repute by taking and passing the transport manager CPC examination.

Nicholas Denton

Traffic Commissioner

13 January 2021