Decision

Decision for for Intact Group Ltd

Published 22 April 2022

0.1 WEST MIDLANDS TRAFFIC AREA

1. DECISION OF THE TRAFFIC COMMISSIONER

2. PUBLIC INQUIRY HELD ON 8 MARCH 2022

2.1 OPERATOR: INTACT GROUP (UK) LTD LICENCE OD2034274

3. Background

Intact Group (UK) Ltd holds a restricted goods vehicle operator licence for three vehicles, granted on 15 October 2020. The director of the company is Gurpreet Singh. The authorised operating centre is at Units 1 and 2, Holyhead Way, Birmingham B21 0LT.

On the application form for the operator licence, signed on 25 June 2020, director Gurpreet Singh wrote that the company was involved in the retail sector. The nature of the company’s business at that time, according to Companies House records, was “other retail sale not in stores, stalls or markets”.

4. DVSA report

In February 2022 I received a report from DVSA traffic examiner Adrian Prior. He had investigated the operator on suspicion that it might be a front for continued operations by Master Construction Products Ltd, a company whose licence I had revoked with effect from 21 October 2020 after a public inquiry in September 2020 had found continuing very poor maintenance standards (the company had a long history of non-compliance). I had also indefinitely disqualified Master Construction Products Ltd from holding an operator’s licence.

TE Prior noted that the vehicles specified on Intact Group (UK) Ltd’s licence during the reference period he had looked at (1 March to 15 July 2021) were volumetric mixers, tippers or grab vehicles, which appeared to be unusual vehicles to be in the service of a company in the retail sector. All of the vehicles were registered to Master Construction Products Ltd or related company MCP Ltd. Three vehicles, LX64 AAJ, LX64 AAE and BX07 OBE, had previously been specified on the licence of Master Construction Products Ltd.

On 4 August 2021, TE Prior requested tachograph data from Intact covering the reference period. None of the requested records was ever received.

On 4 October 2021 he visited Intact’s operating centre at Holyhead Road and found no vehicles there or any sign that the premises were in use. Separately, DVSA vehicle examiner Paul Matthews had asked Intact to make its vehicles available for inspection at the Holyhead Road operating centre on 12 July 2021: he had arrived to find the vehicles parked on a grassy track covered with litter and excrement. It was evident that the vehicles were not in reality operating from this “operating centre”.

On 20 September 2021 TE Prior inspected one of Intact’s vehicles YJ07 HSV, at the roadside. It was carrying a skip marked “MCP Skip Services”. The vehicle was untaxed, supposedly “transferred to the motor trade” in February 2021. However, it had been specified on Intact’s licence between 8 April and 18 May 2021 and between 20 May and 5 October 2021. The operator claimed that this was an “oversight”.

On 12 October TE Prior went to 9 Pentos Drive in Birmingham, the premises (and former operating centre) of Master Construction Products Ltd. There he found three vehicles which, until very recently, had been specified on the licence of Intact. Two of the vehicles had been removed from Intact’s licence less than an hour prior to his visit. Major Singh Ghag, the director of Master Construction Products, stated that the vehicles were parked there for maintenance reasons.

5. Public inquiry

Concerned that Intact Group (UK) Ltd might have been acting as a front for the disqualified operator Master Construction Products Ltd, I called Intact to a public inquiry. The call-up letter was sent on 7 February 2022 and the inquiry was held in Birmingham on 8 March 2022, in parallel with inquiries into Jay 10 Ltd and Pure Veg Ltd, both of which companies were also suspected of acting as a front for Master Construction Products Ltd.

At the time of TE Prior’s investigation into Intact Group (UK) Ltd (“Intact”), its entry on Companies House records stated that it was involved in “other retail sale not in stores, stalls or markets”. By the day of the public inquiry however, I noted that the entry had been amended by the company to include also “development of building projects; construction of domestic buildings.”

Intact’s director Gurpreet Singh did not attend the public inquiry on 8 March 2022 because he had Covid: Intact was represented by solicitor Mahan Manu, who had full instructions.

Mr Manu explained that the vehicles had been hired by Intact (with drivers) from Master Construction Products Ltd. “Hire agreements” covering periods from January 2022 were produced: the agreements each consisted of only one page of A4 paper and did not contain the detail common in hire agreements with normal vehicle rental companies. I noted that there was no provision for VAT for example. Prior to this, hire agreements from January to December 2021 had been verbal, not written. Payments for the hire had been in cash.

Mr Manu was not able to assist with most of my questions. He explained that the company constructed residential and industrial units. He further made the point that the first vehicles had not been specified on Intact’s licence until January 2021, whereas Master Construction Products Ltd’s licence had been revoked with effect from 21 October 2020. If Intact was simply a front for Master Construction Products, it would surely have specified vehicles immediately after grant of its licence on 15 October 2020.

6. Further information

I adjourned the inquiry in order to take a written decision. I asked Intact to provide further bank statements covering the period 1 January to 31 October 2021 so that I could assess the nature of the business. These I duly received. They were supportive of the company’s claim to be in the building trade, with numerous payments to wholesale suppliers in that sector (including “MCP Ltd”). Payments to MCP were of varying amounts and irregular. They did not suggest regular payments for the hire of vehicles. I noted that the majority of Intact’s income seemed to be in the form of cash deposits.

7. Findings

I find that the so-called hire arrangement between Intact Group (UK) Ltd and Master Construction Products Ltd was a fiction. Until January 2022 the “hire agreements” were purely verbal and even after that they were not what would normally be considered as bona fide hire agreements. No company genuinely hiring its vehicles to another company would ever do so on this basis.

I find that the vehicles on Intact’s licence were never based at the supposed operating centre at Holyhead Road (Section 2(1)(a) of the 1995 Act refers): the photographs attached to TE Prior’s report makes graphically clear the unsuitability of the premises as an operating centre. I find that the vehicles continued rather to be based in Pentos Drive, at the premises of Master Construction Products. This was not Intact’s authorised operating centre.

Intact was never able to produce any tachograph records and clearly therefore has not been monitoring drivers’ hours (Section 26(1)(f) refers).

There is no sense in which Intact was in control of the vehicles or drivers. I find that Intact has acted as a front for continued operations by Master Construction Products Ltd, with the traditional lack of attention to legal requirements (eg in taxing vehicles) which I have come to expect from that company.

I was unpersuaded by Mr Manu’s argument that, if Intact had been a front for Master Construction Products it would have operated vehicles from October 2020 rather than January 2021. Between October 2020 and January 2021, Master Construction Products was able to use Jay 10 Ltd and Pure Veg Ltd as cover for its continued operation of HGVs. Only from January 2021 did it need to turn to Intact as a cover.

In consequence of its fronting, I find that Intact Group (UK) Ltd is not fit to hold an operator’s licence (Sections 13B and 26(1)(h) of the 1995 Act refer).

In reaching this finding I did consider the Priority Freight question of how likely it is that the operator would comply in the future. I consider that this is extremely unlikely, given the company’s record of deception. This tends to posit an affirmative answer to the Bryan Haulage question of whether the company deserves to go out of business. In actual fact this is unlikely, as I do not believe that Intact operates any HGVs for its own core business. If it were however to go out of business, this would be a merited outcome, as the company has knowingly facilitated continued operations by a banned operator.

8. Decisions

8.1 Licence revocation

1. The licence is revoked with effect from 0001 hours on 7 May 2022.

8.2 Disqualification of Intact Group (UK) Ltd and of its director

1. For the reasons outlined above, I further conclude that Intact Group (UK) Ltd and its director Gurpreet Singh should be disqualified under Section 28 from holding or obtaining an operator’s licence in the future. Because of the seriousness of fronting for a disqualified operator, the disqualification is for a period of five years, until 7 May 2027.

Nicholas Denton

Traffic Commissioner

8 April 2022