Decision

Decision for Costyflavor Trans Ltd – OF2020031 & Mr D Nadezhdin, TM & Rilcolm Services Ltd – OF2021903

Published 29 June 2023

0.1 In the Eastern Traffic Area

1. Deputy Traffic Commissioner’s Written Reasons for Decision

1.1 Costyflavor Trans Ltd – OF2020031 & Mr D Nadezhdin, Transport Manager & Rilcolm Services Ltd – OF2021903

The above public inquiry was held on 28 June 2021 at the Office of the Traffic Commissioner in Cambridge. After deliberating for over an hour I announced my decisions and explained that written reasons would follow. What now follows are my written reasons.

Costyflavor Trans Ltd (“Costyflavor”) holds a standard national goods vehicle operator licence authorizing four vehicles and four trailers The licence was granted on 15 April 2019 and the sole director is Mr Giurica and the Transport Manager, since the licence was granted, is Mr D Nadezhdin.

Rilcolm Services Ltd (“Rilcolm”) holds a standard international goods vehicle operator licence authorizing two vehicles and two trailers. The licence was granted on 21 October 2019. The sole director is Mr L Van-Dunem. There is currently no transport manager; the operator had been granted a period of grace in relation to professional competence from 18 February 2021.

The period of grace for Rilcolm was due to expire on 21 June 2021 at the Public Inquiry that was first listed for that date. The hearing had to be abandoned part way through (see below) and so I extended the period of grace until the conclusion of the public inquiry on 28 June 2021.

Costyflavor, and its transport manager, had been called to public inquiry as a result of an adverse report prepared by the Driver and Vehicle Standards Agency (“DVSA”) being received by the Traffic Commissioner. Due to the link between Costyflavor and Rilcolm, via Mr Nadezhdin, Rilcom was also called to public inquiry.

The public inquiry had been due to complete on 21 June 2021. It was listed for a virtual hearing. I presided. It became clear part way through that Mr Giurica could not hear what was happening properly due to problems with the technology. I therefore abandoned that hearing, relisted it for a face to face hearing at the Office of the Traffic Commissioner in Cambridge and directed that the next hearing would commence totally afresh. I had the hearing listed only seven days after the 21 June 2021 because I had serious concerns for road safety from the papers before me.

Present at the public inquiry on 28 June 2021 were the directors for both operators and the transport manager for Costyflavor who was also the proposed transport manager for Rilcolm.

I fully explained what the issues were and that everything was going to be looked at afresh. I then dealt with the issue of appropriate financial standing for Costyflavor in private before commencing the main part of the hearing in public. At the end of the hearing I deliberated for over an hour before giving my decisions which were to be followed by my written reasons for those decisions.

In reaching my findings in these cases I have taken into account everything in the papers before me and everything I heard in oral evidence. Where an issue was in dispute it was decided by applying the civil burden of proof (the balance of probabilities) from the evidence that I considered to be relevant to deciding that issue.

My findings were as follows:

• Neither operator nor Mr Nadezhdin can plead ignorance or lack of knowledge. The Upper Tribunal in appeal case of 2012/030 MGM Haulage and Recycling Ltd made it clear that operators and transport managers are deemed to know the advice and guidance that is in the public domain. Here the extensive statutory documents issued by the Senior Traffic Commissioner for Great Britain have been in the public domain for over 10 years.

• Costyflavor was not of appropriate financial standing. Costyflavor was directed to statutory document number 2 in the call up letter dated 17 May 2021. At page 7 of the bundle the website link to that document is recorded. At page 9 of the bundle it says that “…Evidence of your financial standing should include the following original documents” which are then listed. It then says “…send in internet printouts or shortform statements now if that is all you have, but you will need to provide original or authenticated bank statements on the date of the inquiry. You are strongly advised to sort this out now, not on the morning of the inquiry.” No original or authenticated bank statements were provided. No letter from the bank to confirm that the bank was unable to provide authenticated copies of bank statements was provided. No loan agreement that was current (and therefore still available) was provided. No factoring agreement (in accordance with Statutory Document number 2) that showed the money available to be drawn down was provided. No application for a period of grace to show appropriate financial standing was made to me (and it is for the operator to make that request not for the Traffic Commissioner to invite the operator to do that). Deciding the issue of appropriate financial standing was required on the day of the public inquiry (see the Upper Tribunal appeal case of 2012/017 NCF Leicester Ltd). There was no evidence, that satisfied Statutory Document number 2, before me to demonstrate that Costyflavor remained of appropriate financial standing.

• I add, as a moot point, that from the evidence before me, and applying the test in the Upper Tribunal appeal case of 2014/008 Duncan McKee I was extremely unlikely to have granted a period of grace to show appropriate financial standing even if it had been requested because there was no “tangible evidence, beyond mere hope and aspiration, that granting a period of grace will be worthwhile and that there are reasonable prospects for a good outcome…”

• Costyflavor had been operating from an unauthorized operating centre contrary to section 7 of the Act for a long time. The issue of whether Costyflavor had permission from the landlord or landowner at the site where it’s operating centre was specified had been formally raised with Costyflavor. No written permission from the landlord/landowner had been provided to satisfy me that Costyflavor still had permission to park at the specified operating centre any longer. It is an essential ingredient for any operating centre that the land that makes up that location is available to the operator. Written permissions is required from the landlord/landowner to demonstrate that. I was told that the previous landlord had left and that the new landlord had not been willing to provide any form of written permission that Costyflavor was permitted to remain. As a result I find that offences, contrary to section 7 of the Act, have been occurring for a significant length of time and that the operator is operating from an unauthorized operating centre.

• The director of Costyflavor, Mr Giurica, had been knowingly making false records of his driving and duty periods by deliberately extracting his digital tachograph card from the tachograph machine and then carried on driving. He did this, he told me, because he had run out of driving hours. This is extremely serious misconduct and happened over an extended period of time on the following dates. For the avoidance of any doubt he knew the card was extracted from the tachograph machine because (a) he told me that that was what he did and (b) in any event when a digital tachograph card is removed from a digital tachograph machine a warning light is triggered and continues until a digital tachograph card is inserted. Making a false record to extend driving/duty periods beyond the legal limit places road safety at significant risk. Here the following occurred:

01 March 2020 Drove 9 minutes without a card for 2 KM

01 March 2020 Drove 95 minutes without a card for 133 KM

12 March 2020 Drove 25 minutes without a card for 15 KM

12 March 2020 Drove 35 minutes without a card for 23 KM

07 April 2020 Drove for 85 minutes without a card for 94 KM

09 April 2020 Drove for 67 minutes without a card for 85 KM

03 May 2020 Drove for 25 minutes without a card for 19 KM

01 June 2020 Drove for 43 minutes without a card for 43 KM

02 June 2020 Drove for 31 minutes without a card for 44KM

• Notwithstanding how serious these occurrences were per se for a director of a company that holds an operator licence the offences are further aggravated by the fact that he was stopped by DVSA on 04 May 2020 and yet the two incidents in June 2020 still took place despite the previous stop.

• The lack of compliance with drivers hours and tachograph rules and regulations then continued. From the infringement reports sent to the Office of the Traffic Commissioner by Costyflavor a staggering number (I counted 237) drivers hours offences (all breaches are offences) occurred between March 2020 and April 2021. About 200 of those offences occurred after the roadside stop by DVSA on 04 May 2020.

• The excuses given to me for this significant non-compliance were, in essence, to blame everyone else and to blame the lack of tools at the operator and transport manager’s disposal to ensure compliance by drivers.

• I reject all of the explanations given by the operator and transport manager as being wholly without merit and wholly without substance. Compliance is an ongoing expectation not an aspiration. The number and nature of offences is alarming. There was clearly a complete lack of effective management control in relation to drivers hour and tachograph compliance by the operator and I make the same findings in relation to the transport manager.

• On the watch of the sole director of Costyflavor road safety had been significantly put at risk by the failure to ensure compliance with driver’s hours and tachograph rules and regulations.

• On the watch of the transport manager of Costyflavor road safety had been significantly put at risk by the failure to ensure compliance with driver’s hours and tachograph rules and regulations.

• Road safety had been further seriously compromised by the failure on the part of Costyflavor to properly maintain its vehicles. A staggering number of safety related defects were found at various preventative maintenance inspections (“PMIs”) when the corresponding driver defect reporting sheets recorded “Nil” defects having been found when many of the defects subsequently spotted at the PMI were defects a driver should have spotted. The following were of particular note from just two vehicles that I looked at:

GF64 FAU 29 April 2021 5 safety related defects identified

GF64 FAU 02 November 2020 14 safety related defects identified

GJ64 GDK 19 October 2020 19 safety related defects identified.

• I add that in my 13 years as Deputy Traffic Commissioner I have never seen a vehicle with as many safety related defects presented for PMI as GJ64 GDK on 19 October 2020. It is frightening to think that this vehicle was clearly in service with all or many of those safety related defects present for a significant length of time prior to the PMI.

• The operator and transport manager have an absolute duty to ensure that the PMI inspection frequency is set to reflect a suitable gap between PMIs to stop road safety related defects occurring. You may see one, maybe two, safety related defects when a vehicle is the subject of a proper PMI schedule but you should not be seeing more than that.

• The operator clearly failed to effectively monitor and manage maintenance. Had it done so then it would have seen the obvious issues from the maintenance records and that drivers were clearly not doing any (or any effective) first use inspection of their vehicle before it went onto a public road. As a result, on the watch of the sole director of Costyflavor, road safety had been significantly compromised.

• The transport manager of Costyflavor clearly failed to effectively monitor and manage maintenance. Had he done so then he would have seen the obvious issues from the maintenance records and that drivers were clearly not doing any (or any effective) first use inspection of their vehicle before it went onto a public road. As a result, on the watch of the transport manager of Costyflavor, road safety had been significantly compromised.

• The general undertakings on the operator licence held by Costyflavor had been repeatedly breached for a long time.

• The conditions on the operator licence held by Costyflavor had been breached because the operator had failed, within 28 days, to inform the Traffic Commissioner of an event, or events, that may impact on the operator’s ability to remain of good repute and/or appropriate financial standing and/or professionally competent.

• The director of Costyflavor had not undertaken any formal continued professional development refresher training.

• The transport manager of Costyflavor had undertaken refresher training as a transport manager in July 2020 (but there was still the serious and sustained non compliance on his watch after that date).

• The operator detailed changes it had made to its systems and procedures (maintenance and drivers hours) but this had to be balanced against the fact that there was no third party audit before me to show that the changes had resulted in compliance or would soon result in compliance. Promises as to future change by being more strict with drivers were also made.

• In relation to Rilcolm there was no maintenance contract in place as at the date of the public inquiry. Maintenance related documents (PMI sheets) were missing for vehicle CA14 BKO and GN14 ZCZ. In relation to vehicle CA14 BKO; its last PMI was on 15 January 2021 and no further PMI had then been undertaken then until 10 June 2021 (over 20 weeks) and vehicle GN14 ZCZ went from a PMI on 25 February 2021 to its next PMI on 10 June 2021 being a period of 16 weeks.

• Both vehicles revealed a large number of defects at PMI but there was either no corresponding driver defect reporting sheet or where there was one it was marked as “Nil” despite multiple driver spottable defects being found at the PMI.

• This all occurred on the watch of the sole director and Mr Nadezhdin who was the proposed transport manager.

• Road safety was clearly compromised by the operator and the proposed transport manager. Both the sole director and the proposed transport manager had failed to effectively manage maintenance compliance within the Rilcolm transport operation.

• The undertakings and the conditions on the operator licence held by Rilcolm had been breached.

• Rilcolm had not made any real effort to source an alternative transport manager should Mr Nadezhdin lose his good repute as a transport manager. I was told of another person being available but no firm details were given and I was also told that Mr Van-Dunem’s partner had just taken the transport manager CPC exams and her results would be due in three weeks or so.

• Both Mr Van-Dunem and Mr Nadezhdin made promises as to future compliance and requested a chance to demonstrate that compliance could be achieved.

In relation to Costyflavor I gave the operator as much credit as I could for the positives which I then balanced against the negatives to assess the operator as it appeared before me on the day of the public inquiry on 28 June 2021. Having undertaken that balancing exercise it was crystal clear to me that the negatives significantly outweighed the positives.

I then considered Statutory Document number 10 and in particular Annex 4 therein. Again I gave the operator as much credit as I could give. In doing so I still assessed the operator as falling into the “Severe to Serious” category for the entry point for regulatory action, but this was more in the “severe” category than in the “serious” one.

The conduct of the director and transport manager in this case was extremely poor. I had no hesitation, from my findings in this case, in answering the Priority Freight question in the negative as I did not think it at all likely that Costyflavor would be compliant in the near future.

I then, even after giving Costyflavor as much credit as I could, found that it was proportionate to answer the Bryan Haulage question in the affirmative. The conduct of this operator was such that this operator ought to be put out of business. The operator had lost its good repute.

I then turned to the good repute of Mr Nadezhdin as the transport manager of Costyflavor. Even giving him what credit I could give from my findings the evidence only pointed in one direction. On his watch road safety had, for a long and sustained period of time, been seriously compromised. It was entirely proportionate to find that he had lost his good repute as a transport manager a long time ago and it had not been restored as at the date of the public inquiry. Mr Nadezhdin was no longer of good repute as a transport manager.

Therefore under my mandatory powers, pursuant to section 27(1)(a) of the Act, the operator licence was revoked because the operator was no longer of good repute, appropriate financial standing and it was no longer professionally competent.

Under my discretionary powers I found, even giving the operator as much credit as I could, that it was proportionate to revoke the operator licence under section 26(1)(a) [unauthorized operating centre], 26(1)(b) [breach of the licence conditions], 26(1)(f) [breach of the general undertakings on the operator’s licence] and 26(1)(h) [material changes since the licence was granted].

The date that all order of revocation for Costyflavor take effect was set to 2345 hours on 28 July 2021 to allow the operator to wind down its transport operation.

As a result of Mr Nadezhdin losing his good repute as a transport manager it was mandatory for me to disqualify him as well. That disqualification start date was deferred until 2345 hours on 28 July 2021 to allow him to assist in the winding down of the transport operation. The disqualification was for 12 months from 2345 hours on 28 July 2021 until 2345 hours on 27 July 2022. I have already detailed, in my decision document, the necessary rehabilitation measure that must be undertaken. Clearly him undertaking the transport manager CPC refresher course did not work last time but I remain hopeful that if he were to undertake it again that it would be effective in giving Mr Nadezhdin the necessary knowledge and skills to do the job properly were he to come back into the industry at a later date.

I made no order as to disqualification only because I did not think that Mr Giurica had acted with a deliberate intent (except when he pulled his drivers card on the 9 occasions) to breach the operator licensing rules and regulations. I think he was, quite simply, just not up to the job of being able to manage a small transport operation in a compliant manner.

In relation to Rilcolm. Its proposed transport manager had lost his good repute as a transport manager. He could not be the transport manager on this operator licence. There was no one else that could step in for him and this operator had been in a precarious position for a long time relying on a period of grace since 18 February 2021. I would not extend that period of grace (albeit I was not asked to) because in accordance with the Upper Tribunal appeal case of 2014/008 Duncan McKee there was not any “tangible evidence, beyond mere hope and aspiration, that granting a period of grace will be worthwhile, and that there are reasonable prospects of a good outcome.” With that in mind there was no tangible evidence before me that Mr Van-Dunem’s partner had sat all elements of the transport manager CPC course and there was no guarantee that his partner would pass the transport manager CPC qualification (and about 40% of the people who take that examination fail it). Therefore that issue was, at best, “mere hope and aspiration”. There was likewise nothing before me in relation to the other person (whose surname Mr Van-Dunem could not remember) who again, at best, was “mere hope and aspiration.”

An adverse determination had already been made under section 27(1)(a) when the period of grace for Rilcolm had been granted.

As a result of the period of grace no longer being present I revoked the operator licence in accordance with the adverse determination that had already been made. It was revoked under section 27(1)(a) [no longer being professionally competent] but I set the date of the revocation back to 2345 hours on 28 July 2021 to allow for the orderly winding down of the transport operation.

I also undertook a balancing exercise for Rilcolm in relation to my other powers. In that respect I gave Rilcolm as much credit as I could give to it. However, even after doing that the negatives still outweighed the positives as at the date of the public inquiry.

Even giving as much credit as I could to Rilcolm the correct entry point for regulatory action, as per Statutory Document 10, Annex 4, was in the “Serious” category due to the risk to road safety and the lack of management control in relation to maintenance.

I did not think the operator had lost its good repute (but it had been severely tarnished by acts and omissions of Mr Van-Dunem and Mr Nadezhdin).

It was, from my findings, proportionate to revoke the operator licence held by Rilcolm under my discretionary powers pursuant to sections 26(1)(f) [breach of the general undertakings on the operator’s licence] and 26(1)(h) [material changes since the licence had been granted]. Again, the date of revocation under my discretionary powers was deferred until 2345 hours on 28 July 2021.

In relation to Mr C Giurica I formally direct that he is called into a driver conduct hearing in relation to the nine instances that he drove without his driver’s card.

Finally, I apologise to Mr Nadezhdin and Mr Giurica for the repeated failure on my part to properly pronounce their names during the public inquiry hearing.

Deputy Traffic Commissioner Dorrington.

[signed electronically]

05 July 2021