Decision

Decision for CTSG Transport & Logistics Ltd & Andrew Akers Transport Manager

Published 8 June 2022

1. WRITTEN DECISION OF THE DEPUTY TRAFFIC COMMISSIONER FOR THE NORTH EAST OF ENGLAND

In the matter of the Goods Vehicles (Licensing of Operators) Act 1981 (the Act)

2. CTSG Transport & Logistics Ltd OB2036887

&

3. Andrew Akers, Transport Manager (TM)

4. Public Inquiry at Leeds on 14 March 2022

5. Background

CTSG Transport & Logistics Ltd (hereafter CTSG) has been the holder of a Standard International Goods Vehicle Operator’s licence for 15 vehicles and 5 trailers since 3 November 2020.

The company had no recorded adverse regulatory history before the matters raised below.

Richard Gethings-Smith is a director of GSC Services Ltd, alongside his wife, Louise Gethings-Smith. That company does not hold, and never has held, an operator’s licence. According to records filed with Companies’ House, this was a dormant company, at least until 30 September 2020.

Richard Gethings-Smith remains a director of GS Couriers (Nottingham) Ltd. That company did hold an operator’s licence which I had revoked, following a rehearing of a Public Inquiry held on 18 November 2020 that had been directed by the Upper Tribunal. I had then disqualified Richard Gethings-Smith from holding or obtaining an operator’s licence for a period of 2 years.

6. Transport Manager (TM) Andrew Akers

CTSG’s nominated TM since 15 March 2021 had been Andrew Akers. He resigned on 8 March 2022 and the operator is therefore without professional competence. No application had been made for a period of grace.

Called to this hearing in relation to his good repute as TM, Andrew Akers had indicated that he would not be attending the Public Inquiry but that he would provide a statement and a written indication of the reasons for his non-attendance; neither has been provided. Attempts to contact him before the hearing began were unsuccessful.

I determined to deal with his case in his absence. I was satisfied he was aware of the proceedings and presumed he had changed his mind about providing any written representation. The reasons are included at the foot of this decision.

7. Events immediately prior to the Public Inquiry

My office was notified on 9 March 2022 that CTSG’s directors had decided that they no longer wished to continue operating and would be shutting down the business.

Their counsel, Harry Bowyer, had nevertheless confirmed the attendance of director, Martin Gethings at the hearing, indicating that this step –

“.. will, hopefully, simplify matters for the Traffic Commissioner, who will only have to consider the difference between accepting the surrender of the licence or revoking it”.

In closing his client’s case, Mr Bowyer reconfirmed that Mr Gethings wished to be permitted to surrender the licence and retain his good repute.

8. Circumstances of the calling in to Public Inquiry of CTSG

DVSA officers had made unannounced visits on 12 October 2021 to the operator’s correspondence address and to each of its two operating centres.

Issues arose therefrom:

• At the Bestwood operating centre, they located the operator’s maintenance contractor, who was attending to a CTSG nominated vehicle but said he was working for GS Couriers, whose signage was at the entrance that location.

• At the FedEx operating centre, they spoke to the TM for that company, who said he had never heard of CTSG, that it was not a user of the operating centre but that another company, GS Couriers, did park vehicles there overnight as a contractor of its work. His contact in that regard was said to be Richard Gethings-Smith or Andy Akers.

• At the business address, the officers met Andy Akers and were shown into what appeared to them to be an unused office. They were told no one worked from that location and that the TM kept necessary documents at his home. It transpired the next-door unit belonged to GS Couriers.

The next day a request for information had been made by DVSA in accordance with Section 99 of the Transport Act 1985 for drivers’ hours and other information. This was provided in timely fashion and was assessed as ‘mostly satisfactory’.

Thereafter, attempts by DVSA officers to arrange to carry on their investigation and to examine vehicles were thwarted by periods of COVID isolation within the business. DVSA concluded that the operator was being unhelpful and avoidant, so, on 30 November 2021, an unannounced visit was carried out at the Bestwood operating centre. It was found locked-up, but access was later achieved, and vehicle inspections were carried out, although no records could be inspected.

Two delayed prohibitions were attracted by vehicles inspected that day by VE Flanagan; both related to leakages in vehicles’ braking systems. An inspection notice was issued in respect of a third vehicle’s tyre.

Concerned about whether CTSG was a front for GS Couriers, matters were reported to the Traffic Commissioner and a decision made to call the operator to Public Inquiry.

Records were requested to be provided in advance of this hearing and DVSA had been able to review them. An analysis tool (SIPCAT) was presented that evidenced some late preventive maintenance inspections and that more than half of those carried out were incomplete, since brake testing had either not taken place, or been carried out in an unladen condition. A TE had examined Vehicle Off Road (VOR) records but when he had sought to reconcile them with tachograph reports had found that vehicles were in fact in use during those periods. The operator also accepted that PMI sheets showed driver detectable defects.

The first-time pass rate at MOT is at a level slightly better than the national average.

9. The hearing:

I heard evidence from Traffic Examiner (TE) Cotgreave and Vehicle Examiner (VE) Flanagan. Their evidence was largely undisputed, although having heard it, I concluded that:

• The allegation that Martin Gethings’ partner, Ciara Turley had been obstructive towards the DVSA was not made out on the balance of probabilities;

• Nor was I satisfied on balance that maintenance records had been falsified, as had been alleged.

Invited to conduct my own ‘dip test’ of maintenance records, I did see evidence of late PMIs, although the number of occasions and the extent of the stretching was limited.

I heard at some length from Martin Gethings. I found his evidence to be almost entirely without artifice, I judge that he had been naïve, and from the outset unfamiliar and ill-prepared for the expectations of him as the director of a licence holding company but also that it was likely he had been influenced by family members including his sister, Louise Gethings-Smith.

He claimed that he had sought to carry out his role, as CTSG’s lead director exclusively from his home in Craigavon, Northern Ireland. The original application had made no mention of such an intention. He had not attended in Nottingham at any stage during the life of the licence, referring instead, to regular online “Microsoft Teams” meetings with Andrew Akers, his TM. Medical advice was to the effect that he should not travel. He denied that Richard Gethings-Smith had any leverage in the way the operations were undertaken, no management function, nor was he allowed he give instruction to drivers.

Hire agreements for vehicles were provided but alternative and conflicting provisions had been left unaltered in the text. The agreement required vehicles to be maintained by CTSG but GSC Services Ltd purported to carry out the role.

He maintained that GSC Services sub-contracted its transport requirements to CTSG. It followed that payments were received by CTSG for work completed and invoiced for but that payments were made in the other direction for the hire of vehicles, staff and the insurance of vehicles, which were ach provided by GSC Services. He argued that Richard Gethings-Smith received none of the profit from the use of vehicles but only the benefited from the vehicle hire costs received. It was the case however that bank statements showed periods, for example 4 December 2021 to 31 January 2022 when no monies were received at all, as though GSC Services were controlling the cash flow of CTSG.

He described his management and oversight of Andrew Akers as being “purely on trust” and conceded that he had done nothing by way of education to prepare himself for being licence holder.

He had no direct contact with Richard Gethings-Smith and had not spoken to him for 18 months. He said he had only a limited understanding of the disqualification to which he was subject and did not know of the timescales. Since it was a family arrangement, he said there had been no formal due diligence process, nor had solicitors been involved in setting up CTSG, at the point the licence application was made, or regulating the relationship between the companies. He had not appreciated that GSC Services Ltd was a dormant company before the operator’s licence was granted. He believed a legitimate arrangement was possible and there had been a plan that the drivers would be employed by CTSG but admitted that idea fell by the wayside. He reported that Andrew Akers was to be the direct point of contact with drivers and that he would have been sent a note in the event of them being disciplined. He accepted that during the life of the licence no driver had ever been disciplined. Pressed by me he was unable to describe how he supervised the activities of the TM, or how he satisfied himself that only fit and serviceable vehicles were deployed on the road.

I asked him directly about how he paid his TM, Andy Akers, as I could see no payment of him in the bank account. It transpired that the TM was paid by GSC Services Ltd not by CTSG, although it was said that his company was currently organizing for payment to be made to him. It was accepted that the TM was not contracted to work for CTSG.

10. Consideration:

Mr Bowyer accepted that at the heart of this inquiry lay allegations of fronting. It was his clients’ position that an arrangement, whereby vehicles and drivers were properly hired out to CTSG, but where the activities of vehicles and their drivers were controlled by CTSG, was such that lawful use was being made of the operator’s licence.

Having heard evidence, I am not satisfied the arrangements met that test of control – essentially that the controller of drivers and vehicles is the user of the licence. I find that:

• Martin Gethings, by spending his whole time in Northern Ireland, exercising very little supervision of his TM, deriving no real assurance from what he was told and having little role in the day-to-day activities was not controlling the transport activity.

• It turned out that his TM, who was present on the ground, was in fact a contractor paid for by GSC Services Ltd and not by CTSG. Instructions to drivers were therefore given by GSC Services Ltd not CTSG.

• Hire agreements, central to the legitimacy of the arrangement in demonstrating an arms-length relationship between two companies were not reflective of what was happening in real terms.

• GSC Services Ltd appeared to have such control over the flow of monies for work carried out by CTSG, that it might not be described as operating independently from it.

• It is more likely than not that these arrangements have served to facilitate the operation of vehicles by Richard Gethings-Smith in a period after the GS Couriers (Nottingham) Ltd licence was revoked and during a period when he was disqualified.

I am not satisfied the arrangements for compliant operation of vehicles by the operator had been in place. Basic failures in terms of record keeping and the maintenance of fit and serviceable vehicles were not being met.

I find that my confidence in this licence has been undermined to the point where I consider it appropriate and entirely proportionate that I revoke the licence in accordance with all those provisions of Section 26 of the Act set out in the calling-in letter but also under the mandatory provision in Section 27 in respect of lack of professional competence.

Allowing the surrender of this licence in the circumstances described would be wholly inappropriate and an affront to the system.

I have asked myself if I must conclude that the repute of this operator and its directors is appropriate. Martin Gethings specifically asks that he be permitted to retain his repute. I note that when asked directly by me “What he had believed he had needed to do to ensure that the relationship with GSC Services Ltd might not been seen to be a front: he had been unable to answer. Later asked whether he believed that he had been “tricked or whether he had not supervised closely enough”. He had replied “both”.

I conclude his role was probably that of a naïve and unsuspecting pawn, yet I would be unable to describe him as an ‘innocent’. He does not present that matter in terms of undue pressure placed on him. He did apply for the operator’s licence, he gave undertakings to comply with the law, and to operate fit and serviceable vehicles: he did not achieve it. His belief that it would be acceptable to manage an operator’s licence without ever visiting the site of operations, even taking account of the contextual background of the pandemic, is so unacceptable that any other conclusion that repute has been lost is impossible.

I am to conclude that neither disqualification of the company, nor of either of the directors is necessary or appropriate. I am told there is no intention for Martin Gethings (or Ciara Turley) to further involve themselves in transport. I believe what I am told in that regard, if I had not, a lengthy disqualification would have been appropriate.

I direct that the revocation take effect immediately.

11. Former TM Andrew Akers

Andrew Akers has chosen not to attend this hearing, nor has he provided representations about why his repute should not be forfeit. He ought to have been prepared to face up to criticisms of his role in these operations and about how effective he was in the light of the criticisms made during the investigation and following the review of documentation since provided. I find that he has failed in his responsibility to manage transport operations in a continuous and effective manner. He has compounded this by his absence. I judge that I must find his good repute to have been lost and that he should be disqualified from holding the role. I am neither able to properly calculate the length of the ban, nor to describe rehabilitative measures which might otherwise have been applied in his case. The disqualification will therefore be an indefinite one.

Simon Evans

Deputy Traffic Commissioner for the North East of England

15 March 2022