Decision

Decision for Eric Sprakes/Sprakes Transport Services

Published 18 October 2023

0.1 IN THE NORTH WEST OF ENGLAND TRAFFIC AREA

1. ERIC SPRAKES TRADING AS SPRAKES TRANSPORT SERVICES

1.1 OC0261186

2. CONFIRMATION OF ORAL DECISION OF THE TRAFFIC COMMISSIONER

In the matter of the Goods Vehicle (Licensing of Operators) Act 1995

Public Inquiry held at Golborne on 14 September 2023

3. Background

Eric Sprakes trading as Sprakes Transport Services (“the operator”) has held a standard international goods vehicle operator’s licence OC0261186 since 1993 authorising the use of twelve vehicles and twelve trailers. There are currently two vehicles in possession. Mr Sprakes is also the Transport Manager.

At the five yearly continuance of the licence earlier this year, it became apparent that the Operator lacked financial standing.

The examination of the licence also raised a concern that there had been a change of entity.

In correspondence with my office, Eric Sprakes asked for the name on the licence to be changed to Sprakes & Sons Limited.

Sprakes & Sons Limited was incorporated in May 2012. Its directors are Eric Sprakes, his wife Karen Sprakes, and their sons Barry Eric Sprakes and Paul Eric Sprakes. The person with significant control is recorded as Barry Eric Sprakes.

The existence of the company previously came to attention in 2013 when Eric Sprakes asked for the name on the licence to be changed to Sparkes & Sons Limited. After it was explained that would require a new application by the company, Mr Sprakes replied that he would continue to hold the licence as sole trader. He explained that the limited company ran the garage side of the family business. Mr Sprakes said he intended to retire in the next 18 months and that his sons would then apply for a new licence. Nothing further was heard. The possibility of a change of entity was not considered at the subsequent continuation in 2018 when Mr Sparkes returned the checklist without indicating any further change.

It also came to my attention that Eric Sprakes and Karen Sprakes were directors of a company named Sprakes Transport Services Limited (the same name as the trading name given for Eric Sprakes on this licence). That company entered liquidation in 2011. Mr Sparkes has never disclosed the fact of that liquidation to the Office of the Traffic Commissioner despite completing continuation declarations in 2013, 2018 and 2023 that there had been no material changes in his circumstances.

The public inquiry was called to consider these matters. As the matter initially appeared to concern only the question of financial standing, Mr Sprakes was not called to the inquiry in his capacity as Transport Manager and I do not make any finding about that aspect.

4. The Call to Public Inquiry

The operator was called up to public inquiry by letter dated 3 August 2023.

The call up letter gave notice that the grounds for regulatory action in Sections 26(1)(b) and 26(1)(h) of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”) were to be considered as well as the issues of good repute and financial standing and the provisions for disqualification in Section 28 of the Act.

5. The Public Inquiry

The Public Inquiry was heard at Golborne today. Eric Sprakes was present with his wife Karen Sprakes.  

6. Evidence

In advance of the hearing, I was provided with a bundle of documents by the operator.

The financial evidence provided was in the name of Sprakes & Sons Limited.

Mr Sprakes also provided an explanation for the position in letters dated 31 August 2023 and 12 September 2023. Mr Sprakes admitted that the sole trader business had “finished” in 2012 after a fire at his premises. Sprakes & Sons Limited was incorporated at that point. He claimed an accountant had advised him that he could keep his licence as a sole trader. Mr Sprakes said he thought this was in order as the VAT registration certificate for Sprakes & Sons Limited gave the trading name of Sprakes Transport Services

Mr Sprakes said he realised he had made a “huge mistake” but insisted it was not deliberate. He explained that the limited company had now applied for a new operators’ licence. I have confirmed that an application has been received in the name of Sparkes & Sons Limited trading as Sparkes Transport Services reference OC2068359 on 8 September 2023 and is in the very early stages of processing.

Mr Sprakes asked for the licence to be allowed to continue as they had a long-standing customer that would be impacted if they were not able to provide it with haulage services.

Shortly before the hearing commenced today, I was made aware that Mr Sparkes had removed the two vehicles currently specified on the licence from the licence record this morning.

In evidence today, Mr Sparkes repeated the fact that he had made a terrible mistake.

It was confirmed that in fact the first change of entity occurred in 2008 when the sole trader business was incorporated as Sprakes Transport Services Limited. That company then operated the vehicles until its insolvency in 2012. From that date the vehicles have been operated by Sprakes & Sons Limited.

Mr Sparkes told that me that having belatedly realised the gravity of the position, he had now arranged for the business’ haulage work to be sub-contracted to Brian Mansell Forwarding Ltd OC0285132 and they are hiring the two vehicles previously specified on this licence.

Mr Sprakes said he had been caused great stress by the position and sought to reassure me he would learn lessons and be doubly careful to be compliant in future. If he was to be disqualified as a licence holder, it would not necessarily mean the application by Sprakes & Sons Limited could not proceed without him as a director, but it is clear Mr Sprakes is still the main manager of that business.

7. Decision

The core facts are not disputed. Mr Sprakes now freely admits that the vehicles have not been operated by him as the sole trader holding the licence since 2008. Instead, the vehicles have been operated by the two limited companies mentioned above. This clear change of entity was not notified to my office as required. Further Mr Sprakes has failed to take advantage of several opportunities over that 15-year period when he should have disclosed the position. Most significantly, Mr Sparkes was told in unequivocal terms in the letter sent by my office on 4 May 2013 that the licence was not transferable, and a new application would be needed by the limited company. Mr Sparkes now concedes that his response at the time that he would continue to operate as a sole trader was not true.

These findings satisfy me that there has been a very significant material change in the circumstances of the licence holder and the grounds for regulatory action in Section 26(1)(h) of the Act are met.

I also find that the Operator no longer meets the requirement of financial standing. I have not been provided with any evidence of finances in Mr Sprakes own name and he accepts that he has not been operating the vehicles as a sole trader. Hence, I find that the grounds for revocation of the licence on the basis of a lack of financial standing in Section 27(1)(a) of the Act are met.

Finally, the failure to notify the change of entity over such a protracted period and aggravated by the fact that misleading information was supplied in 2013, must inevitably lead to a finding that good repute is lost. I find that the grounds for revocation of the licence in Section 27(1)(a) of the Act are also met on the grounds of a loss of good repute.

Having reached the findings of fact recorded above, I have considered the balancing exercise and have considered the positive and negative features by reference to the guidance in the Senior Traffic Commissioner’s Statutory Document Number 10.

There are a number of positive features. The licence has not come to Traffic Commissioner previously. There appears to be effective management control and appropriate systems and procedures in place to properly maintain the vehicles and manage the drivers. I have not been made aware of any previous offending or prohibitions.

The negative features are the unfair commercial advantage that Mr Sprakes has enjoyed as a result of operating vehicles for 15 years under cover of the sole trader licence when new licences in the limited companies’ names should have been sought. The failure to declare Sparkes Transport Services Limited’s insolvency in 2012 also meant that issue avoided proper scrutiny at the time. The position is aggravated by the number of years for which it has persisted and the fact that Mr Sprakes failed to take heed of the clear warning he received in 2013 about the change of entity.

The gravity of the negative features is such that it outweighs the positive features recorded above.

Having balanced these factors and considered the evidence heard at the public inquiry, I consider this is a case that falls into the category of “serious” for the purposes of considering regulatory action.

As Mr Sprakes has conceded the sole trader business is no longer operating the vehicles, it may be seen as academic to consider the continuation of the licence. Nevertheless, I have gone on to consider the question posed in Priority Freight 2009/225 namely, how likely is it that this operator will, in future, operate in compliance with the operator’s licensing regime?”

I have considered Mr Sprakes’ persistent failure to notify the change of entity and to heed the warning given in 2013. I am also concerned at the lack of evidence of continuing professional development. For those reasons, and taking matters as they stand today, I do not have confidence in Mr Sprakes’ ability to be compliant in future.

I have then considered the Bryan Haulage 2002/217 question of whether the sole trader operation deserves to be put out of business, noting that it has ceased to trade in 2008. However, the extent of the failings in this case are such that I would have considered revocation was proportionate even if the sole trader business was still active.

The sole trader licence is therefore revoked immediately and taking effect from Friday 15 September 2023.

Having reached the findings of fact recorded above, I have considered if an order for disqualification of Mr Sprakes as a licence holder should be made.

As a sole trader, the positive and negative features are the same as discussed above for the operator and my current lack of confidence in Mr Sprakes’ ability to be a compliant operator in future is also set out above.

I balance this with the absence of any other complaints about Mr Sprakes’ management of the licence beyond the change of entity point. His ability to effectively manage the maintenance of the vehicles and compliance of drivers has not been called into question. Mr Sprakes is clearly much chastened by the events that have led to his appearance at public inquiry. I am satisfied that with appropriate training and support, Mr Sprakes is capable of regaining his good repute and should be allowed the opportunity of proving he can deliver compliance in future.

I therefore determine that an order for disqualification is not required in the particular circumstances of this case.

8. Application by Sprakes & Sons Limited OC2068359

This new application was not formally before me at the public inquiry today and I make no decision in relation to that matter. I will however take the opportunity to make the following observations on matters that would assist future consideration of the application.

I have commented above on Mr Sparkes’ lack of continuing professional development. At the very least, I would expect to see evidence that he had attended a Transport Manager CPC refresher course (or an undertaking to do so shortly) before considering his application for appointment as a Transport Manager for Sprakes & Sons Limited.

I would also encourage Mr Sprakes and/or one of the other directors to attend an Operator License Awareness Training Course. Mr Sprakes and his fellow directors may also wish to consider if they would benefit from advice from an external source such as a trade body or consultant on how they can remain compliant.

I note the arrangement entered into with Brian Mansell Forwarding Limited (“BMF”). Sprakes & Sons Limited should ensure that the vehicles are fully operated by BMF to avoid any concern of the practice known as “disc lending”.  Any vehicles hired by Sprakes & Sons Limited to BMF should be specified on BMF’s operator licence. The hire agreement for the vehicles and other documentary evidence to demonstrate the validity of the arrangement should be supplied to the Central Licensing Office at Leeds.

Sprakes & Sons Limited must not operate vehicles until it has confirmation of authority to do so in the form of an interim or full operator’s licence. Any evidence that unauthorised operation has continued after today’s public inquiry is very likely to result in its application for an operator’s licence being refused.

Gerallt Evans

Traffic Commissioner for the North West of England

14 September 2023