Decision

Decision for A.J. (UK) LTD (OK1108877)

Published 16 May 2022

0.1 In the South Eastern & Metropolitan Traffic Area

1. Written Decision of the Traffic Commissioner

1.1 A.J. (UK) LTD OK1108877

1.2 Goods Vehicles (licensing of operators) Act 1995

2. Background

This Restricted Licence for 4 vehicles was granted on 19 March 2012. Mr Eliott Baily, the sole Director, attended a New Operators Seminar in London on 15 November 2012. On 17 October 2013 a formal warning letter was sent to the Operator due to an unsatisfactory maintenance inspection. On 15 April 2015 a ‘no further action’ letter was sent to the operator following a satisfactory maintenance inspection carried out due to an increase from 2 to 3 vehicles and a change of operating centre. The increase was granted as applied for. Due to the issue of an ‘S’ marked prohibition a maintenance investigation was carried out on 19 November 2021. The result was ‘unsatisfactory’.

The Examiner stated that he visited the specified operating centre in Chequers Lane and found no trace of the Operator. The Examiner contacted Mr Baily by phone and was told that the vehicles were being parked in Chequers Lane. When questioned Mr Baily admitted that he was parking in Greenacres Trading Estate. Checks show that a variation application to add an operating centre at Greenacres Trading Estate was made online on 9 November 2021 and an interim to allow the use of the site was granted on 22 November 2021. The variation was granted in full on 10 December 2021. The application did not seek to remove the operating centre in Cheques Lane.

Mr Baily explained he was now using DT Trucks and Truckcare to carry out the PMIs. No notification of the change of maintenance provider appeared to have been made online or had been received by the Central Licensing Office at the time the brief was prepared. In responses to DVSA Mr Baily stated that he has spoken to the maintenance providers regarding the tyre dates and to increase the intervals for Roller Brake Testing. Mr Baily advised that he will arrange for laden/unladen tests as required. A VOR system had been introduced. Gate checks were being carried out and he would check the PMIs with the DDR sheets. Any driver failing to report defects would be subject to training or further disciplinary action. Mr Baily advised a written procedure was in place for tyre management.

In a letter dated 6 December 2021 Mr Baily explained that he experienced damage to his vehicles at the specified operating centre so found temporary parking at Box Lane in Barking. He then found secure parking in Greenacres Trading Estate and made an application to change the operating centre at the end of October 2021. He apologised for the oversight in making a ‘timely notification of change of operating centre.’

Due to the matters above, I decided to call the Operator to a Public Inquiry.

3. Hearings

The Public Inquiry commenced on 25 March 2022 and concluded the same day save for one discreet issue. I heard oral evidence from Mr Baily and Vehicle Examiner Abbott. On 11 April 2022, I heard oral evidence from Mr Baily and Traffic Examiner Lordan at a virtual hearing. The Operator was represented by Miss Hellen Newbold, Counsel. I confirmed that I would issue a written decision.

4. Documents

Before making this Decision, I have reviewed the following: -

• Public Inquiry bundle.

• Updated MIVR from Vehicle Examiner Abbott dated 28 February 2022.

• Operator’s bundle of documents received 1 March 2022.

• Email from Operator’s Barrister dated 2 March 2022.

• Email from Operator’s Barrister dated 24 March 2022 at 10:34.

• Email from Traffic Examiner Christopher Lordan to my office dated 25 March 2022 at 13:08.

• S.9 Witness Statement of Traffic Examiner Christopher Lordan to my office dated 4 April 2022.

• Documentation received after the hearing on 25 March 2022 from the Operator, its Counsel and Transport Consultant.

• My handwritten contemporaneous notes.

• South Bucks District Council and another V Porter(FC) (2004) UKHL33, English v Emery Reimbold & Strick Ltd [2002 EWCA Civ 605 and Bradley Fold Travel Limited & Peter Wright v Secretary of State for Transport [2010] EWCA Civ 695 in relation to written decisions generally;

• Upper Tribunal Decisions and other guidance I consider relevant to this determination as listed elsewhere in this Decision; and

• The Senior Traffic Commissioner’s Statutory Guidance and Statutory Directions (‘SGSD) current versions.

5. Issues

The Operator does not challenge the Vehicle Examiner evidence. Notably, Mr Baily admits unauthorised use of an Operating Centre for up to three years before an application was made on 9 November 2021. The Vehicle Examiner report dated 20 December 2021 and the updated report for the Public Inquiry are not in dispute. Mr Baily admits that he did not initially tell the Vehicle Examiner the truth on where he was parking vehicles. Mr Baily only admitted it when VE Abbott said he had already been to Chequers Lane and knew it was not there anymore. The Traffic Examiner Visit Report from October 2021 was not in issue prior to the Public Inquiry because the Report did not reach the requisite level. However, it was referred to by me during the first hearing because Section 13 indicates that the Operator was at that time using its nominated operating centre, which is not correct. It remains a live matter to be determined by me whether Mr Baily misled TE Lordan or Mr Lordan made assumptions and completed the section himself.

There is clear and consistent case law from the Upper Tribunal that a Traffic Commissioner is entitled to treat the conduct of a sole director effectively as the conduct of the Limited Company and good repute or fitness is determined accordingly. Such an approach has received approval from the appellate tribunal on several occasions, such as 2013/008 Vision Travel International Limited and T2013/61 Alan Michael Knight. As well as the operator licensing obligations, a company director must exercise his or her statutory duties of demonstrating independent judgement, skill, care, and diligence, as per sections 173 and 174 Companies Act 2006).

6. Consideration and Findings

The compliance history is adequately set out in the background, and I do not repeat it here. Further information is available in the Public Inquiry bundle and Operator’s documentation. Vehicle EJ65TOA was stopped on the A13 and when inspected found to have several loose wheel nuts. This led to the ‘S’ marking indicating a significant failure in the maintenance systems. The follow up investigation in November 2021 found that there were fundamental failings in the Operator’s maintenance systems in terms of PMIs, drivers’ abilities to undertake effective walk around checks, changes in maintenance contractor not notified and no retorque register was produced even though the visit was two months after the ‘S’ Marked prohibition. Two maintenance contractors were being used that were not specified on the Licence and this is a breach of a Licence condition. Unauthorised use of an operating centre is a breach of a Licence Condition and an offence. As of 25 March 2022, there was some improvements with the maintenance system but still much room for more.

Mr Baily is undertaking driver walkaround gate checks, but Mr Baily himself has never actually had any formal external driver walkaround check training. It follows he may just be passing on bad practice. The level of prohibitions and inspection notices at the roadside indicate this may well have been the case. Mr Baily referred to doing gate checks, but in fact he was only checking the vehicle and not the driver defect books themselves. For this reason, he missed the fact that even in February 2022 a driver is not noting odometer readings. In 2022 the Preventative Maintenance Inspections are still not always being stamped by a contractor and there are basic matters such as non-urgent items being listed in the immediate attention section. All the brake tests we looked at, apart from one dated 7 December 2021, were insufficiently laden to a significant degree. The Preventative Maintenance Inspection dated 15 February 2022 is stamped and has the certificate of roadworthiness signed off. It is signed off by the foreman which makes the mislabelling in relation to safety and non-safety items more concerning.

The Preventative Maintenance Inspection for EK19ULX for 2 March 2022 has no contractor stamp/identification. It has four items in the less urgent/for early attention section. The certificate of roadworthiness is not signed off, but at least the vehicle was properly laden for its brake test. However, the PMI has three driver reportable items on, of which there is no evidence that a driver picked them up. Further the vehicle was released without the certificate of roadworthiness signed off, with a large chip and crack in the windscreen, an ABS warning light on and the offside front tyre “big chunk out”. Mr Baily says that it didn’t have a big chunk it was a small nick in the tyre but there is no evidence of that produced and that does not explain the windscreen or the ABS warning light on. Mr Baily said that the vehicle went straight from the garage to the tyre company, but that is ten miles up the road when the vehicle is not signed off as roadworthy. Mr Baily lodged evidence of the windscreen and ABS light being repaired by 30/3/22 but it does not confirm when the work was done. The same PMI has a roller brake test but there is no secondary brake performance measurement.

What has become patently apparent through this process is that Mr Baily has based his Operator Licence compliance on FORS standards which is unforgivable. Traffic Commissioners have made it clear for longer than Mr Baily has held a Licence that FORS is a procurement standard with a safety element, but it is not an Operator Licence safety standard. Somewhat bizarrely I have been produced a 2017 FORS audit and 2018 risk assessment and therefore no comfort that what is happening is current, even to FORS standards.

Mr Baily refers to doing an HGV and PCV Fleet Management Essentials FORS course when asked about an Operator Licensing Awareness Course. They are not the same thing. The FORS self-styled course says that managers and supervisors responsible for running restricted operator licence fleets should attend. Mr Baily is running 32,000kg tippers. Whether it is a national or a restricted licence, the holder must still have a responsible person. The standards are not different. In terms of the course narrative available online, it includes “explain the complementary nature of the of the Operator Licence undertakings and requirements of the FORS standard”. This is a misnomer. They are not the same thing. The course refers to managing an Operator’s Licence and compliance with the undertakings and the latest guidance from the Traffic Commissioners but at the time Mr Baily took the course he was operating from an unauthorised operating centre and his maintenance systems were deficient. Attendance on this course in May 2021 appears to have added no value to Mr Baily’s business.

This brings me now to the operating centre. On 16 November 2021 Mr Baily lied to Vehicle Examiner Abbott as to where his vehicles were parking. Mr Bailey told Mr Abbott that he was based at Chequers Lane. As at the date of that call Mr Baily had not been at Chequers Lane for at least two years. Mr Baily only told the truth when Mr Abbott made him aware of his prior visit to Chequers Lane. The letter subsequently sent to the Vehicle Examiner and then a month later to my office (date stamped 10 January 2022) seeks to suggest that COVID was one of the reasons for the unlawful parking. The unlawful parking happened long before March 2020. Thankfully Mr Abbott’s inquiries elicited the full picture.

Mr Baily sought to use the Traffic Examiner Vehicle Report of October 2021 as a positive in his case. Unfortunately for him this led to my queries as to what Traffic Examiner Lordan was told on 11 October 2021. The scoring at Section 13 is zero which is in complete contrast to the 6 it should have been due to ongoing unauthorised use. On 11 April 2022 I heard evidence from Mr Baily and Mr Lordan. I prefer the evidence of Mr Lordan. Mr Lordan has a clear recollection of the meeting – describing the home as a building site with noisy works going on. He recalls Mr Baily’s wife wearing Transport for London clothing. Mr Lordan’s pocketbook confirms the visit took just over 2 hours, which he says is about right for this type of operation. Mr Lordan is sure he posed the relevant questions, particularly as (i) it is a shared site; and (ii) they were not meeting at the operating centre. Mr Lordan refutes any suggestion that questions were skimmed over due to the building works. He accepts some things are taken from online records such as prohibitions and other compliance history but not Section 13 as the 4 questions need the Operator to provide the information. I believe him. I do not believe Mr Baily that the questions were not asked or his assertion that if asked he would have told the truth. Mr Baily lied to the VE in November 2021 out of ‘panic’. I see no good reason why he would have been any different with the TE just a month earlier.

7. Determination

There are some positives. The Traffic Examiner report was favourable save for the operating centre issue. I have already explained the maintenance changes by 25 March 2022 above. The rest of the Operator’s evidence at that point was promises of further improvements, training, and external assistance (with some booking confirmations). I am sure that the Public Inquiry was a rude awakening, but he only has himself to blame, especially as there was a previous warning. The Operator has used the time since 25 March 2022 wisely. There has since been a Compliance Visit tied in with driver training and one day awareness training.

I have reminded myself of the helpful Upper Tribunal case of NT/2013/082 Arnold Transport Ltd ( underlining is my emphasis): -

1. The grant of an operator’s licence does not mean that an operator can then proceed on the basis that the requirements that must be met in order to obtain a licence can thereafter be disregarded. In our view it is clear both from the terms of the 2010 Act and from Regulation 1071/2009 that these are continuing obligations, which an operator is expected to meet throughout the life of the licence. It is implicit in the terms of s. 23, which gives the Department power to revoke, suspend or curtail an operator’s licence, that this can take place at any time and for any reasonable cause, including matters covered by the requirements of s. 12 as amended. It is explicit in s. 24, which provides that a standard licence shall be revoked if at any time it appears that the licence-holder is no longer (i) of good repute, (ii) of appropriate financial standing or, (iii) professionally competent. The underlining, in each case is ours. First, we wish to stress that once it appears that the licence-holder is no longer of good repute, or of appropriate financial standing or professionally competent the licence must be revoked because the Act makes it clear that there is no room for any exercise of discretion. Second, the use of the expression ‘at any time’ makes the continuing nature of the obligations crystal clear.

2. The Tribunal has stated on many occasions that operator’s licensing is based on trust. Since it is impossible to police every operator and every vehicle at all times the Department in Northern Ireland, (and Traffic Commissioners in GB), must feel able to trust operators to comply with all relevant parts of the operator’s licensing regime. In addition other operators must be able to trust their competitors to comply, otherwise they will no longer compete on a level playing field. In our view this reflects the general public interest in ensuring that Heavy Goods Vehicles are properly maintained and safely driven. Unfair competition is against the public interest because it encourages operators to cut corners in order to remain in business. Cutting corners all too easily leads to compromising safe operation.

3. It is important that operators understand that if their actions cast doubt on whether they can be trusted to comply with the regulatory regime they are likely to be called to a Public Inquiry at which their fitness to hold an operator’s licence will be called into question. It will become clear, in due course, that fitness to hold an operator’s licence is an essential element of good repute. It is also important for operators to understand that the Head of the TRU is clearly alive to the old saying that: “actions speak louder than words”, (see paragraph 2(xxix) above). We agree that this is a helpful and appropriate approach. The attitude of an operator when something goes wrong can be very instructive. Some recognise the problem at once and take immediate and effective steps to put matters right. Others only recognise the problem when it is set out in a call-up letter and begin to put matters right in the period before the Public Inquiry takes place. A third group leave it even later and come to the Public Inquiry with promises of action in the future. A fourth group bury their heads in the sand and wait to be told what to do during the Public Inquiry. It will be for the Head of the TRU to assess the position on the facts of each individual case. However it seems clear that prompt and effective action is likely to be given greater weight than untested promises to put matters right in the future.

The Operator sits within the second category. However, this case is more complicated that that. Trust lies at the heart of operator licensing. Failing to have safe systems to ensure vehicles are roadworthy is a gross breach of trust. Misleading DVSA is a serious matter. Unauthorised use of an operating centre is a breach of a condition on the Licence and an offence (s.7 of the 1995 Act). The fact that this breach lasted 3 years is insupportable. That cannot be put down to ‘mere’ panic; it is a course of conduct. These matters cast grave doubt on Mr Baily’s integrity. Counsel acknowledged that the starting point in this case is SEVERE in terms of STC SGSD No. 10 Annex 4. As at the date of this decision I am not able to trust Mr Baily moving forward, it is simply not a sustainable conclusion on the facts. You cannot learn honesty and integrity in a seminar. The case is too serious to step back from revocation. Revocation cannot be disproportionate where there have been serious and sustained failings and Examiners misled. Accordingly, I have reached the decision in paragraph 1 above.

What I have been prepared to do – just – is not make an order for disqualification. It is open for the Operator to apply again in the future. However, the burden of proof will be on Mr Baily to persuade a TC/DTC that he can be trusted.

Miss Sarah Bell

Traffic Commissioner

Written confirmation: 6 May 2022