Decision

Decision for Hi-Stanford Scaffolding Ltd (OK2042641)

Published 29 April 2024

0.1 LONDON & SOUTH EASTERN TRAFFIC AREA

1. WRITTEN DECISION OF THE TRAFFIC COMMISSIONER

2. PUBLIC INQUIRY HELD ON 20 MARCH 2024 

3. OPERATOR: HI-STANFORD SCAFFOLDING LTD (OK2042641)

4. Reasons

4.1 Documents and Evidence

Before preparing this decision I have re-read the full electronic bundle, which concludes on page 428. This comprises the original PI Bundle (page 1 – 117), the Operator’s submitted evidence and representations (pages 118 – 329), the Traffic Examiner’s updated report and email serving it on the Operator (pages 330 – 394, Operator own numbering Maintenance A4 – A80/Representations A5 – A13 & B16 – B114), correspondence sent to the Operator after the call in letter dated 15 January 2024 (pages 395 – 403) and pre- PI finances received (confidential) (pages 404 – 428). I have also considered communication from or on behalf of the Operator since the hearing concluded namely: -

• Contract between VIP Transport Management Consultancy Limited and the Operator dated 23 January 2024 and received on 29 January 2024.

• Request via solicitor to extend the time limited interim to operate from Romford from 18 February 2023 until my written decision is received and impacts. This was agreed by me.

4.2 Background

The full background is set out in the case summary (pages 2-4) and the call-in letter (pages 6-15), and I do not repeat it here. In short, Hi-Standard Scaffolding Ltd was granted a Restricted Licence for 1 vehicle only with an operating centre in Erith on 24 April 2021. One of the Directors, Mr Jay Smith, attended a DVSA Remote New Operator Seminar on 16 June 2021. In September 2022 the company name was changed to Hi-Stanford Scaffolding Ltd (same company number and therefore there was no change of entity). A change of name is a material change that should be notified to OTC within 28 days. This did not happen until 16 March 2023.

The Operator came into DVSA’s radar because on the 30 March 2023 a light goods vehicle was stopped and found to be significantly overloaded. On 4 April 2024 an application was submitted on VOL to increase authorisation to 5 vehicles and 5 trailers, from a new Operating Centre at 2 Tonbridge Road, Romford, RM3 8QE. I called the existing Licence and variation application to Public Inquiry. I granted a time limited interim authority on 18 August 2023 to enable use of the new operating centre but for one vehicle only to regularise the position. The DVSA follow up investigation report and Operator’s reply were such that I called the existing Licence and variation application to a Public Inquiry.

4.3 Hearing

The Public Inquiry took place on 15 January 2024. By this time Mr Smith was the sole director and he attended for the Operator, represented by Miss Catherine Gilder, Solicitor. DVSA Traffic Examiner Mr Mark Webb attended via Microsoft Teams. At the end of the evidence and closing submissions, I confirmed a written decision would follow.

4.4 Approach

There is clear and consistent case law from the Upper Tribunal that a Traffic Commissioner is entitled to treat the conduct of the Sole Director effectively as the conduct of the Limited Company and repute or fitness is determined accordingly. Such an approach has received approval from the appellate tribunal on a number of occasions, such as 2013/008 Vision Travel International Limited and 2013/61 Alan Michael Knight.

Operators, Transport Managers, and those advising them have deemed knowledge of the advice and guidance in the public domain, as per the Upper Tribunal in 2012/030 MGM Haulage & Recycling Limited.

4.5 Consideration, Findings & Determination.

The DVSA follow up investigation commenced on 5 May 2023 and concluded with the Operators reply to the Traffic Examiner Visit Report dated 14 June 2023 (page 117). The outcome was marked ‘unsatisfactory’. However, the investigation was not straightforward due to the Operator’s approach. By way of example, when an email was sent to the company to make an appointment for an interview. As no response was received a Section 99ZA request was sent on 15 May 2023 requesting data for the period 01/02/23 to 30/04/23.  The Examiner only received a copy of the driving licence for the driver of HN21LYO but not the data requested for KX64TWV.A visit was made to the operator on 9 June 2023. The result of the visit was marked ‘unsatisfactory’.  The Examiner highlights the following shortcomings: -

• No driver induction training provided to drivers. Toolbox talks said to be carried out but no records kept.

• Driving licences said to be checked every three months but no records kept.

• No evidence of any downloading – he was told that a member staff had been carrying out the download of vehicle units and driver card but had wiped all the data from her laptop when she left recently. However, there was no other evidence of contemporaneous checking either.  I would have expected something, such as signed infringement reports.

• No evidence of a disciplinary procedure in place.

• No evidence of systems for vehicle monitoring – latest PMI carried out by Hales Commercial who are not list on VOL.

• Director confirmed it was using 2 Tonbridge Road, Romford, RM3 8QE (see below).

The Examiner received a letter from Mr Smith dated 14 June 2023 confirming that he and a member of staff were booked on an OLAT course on 18 August 2023 and a visit from a transport consultant (TAC) was arranged. Mr Smith assured the Examiner that the company have upgraded their contract with Aquarius and were setting up an automatic download system. Other new systems were said to be being set up. At the visit the Examiner found KX64 TWV had only been specified since 30 March 2023 and decided to send a further Section 99za requesting data for HX64 XPT and KX64 TWV by 27 June 2023. Despite chase up emails, the Examiner only received three drivers digi-card data.

The investigation concluded that the Operator was unable to demonstrate virtually any systems across the board. This is not challenged. Accordingly, I find a breach of Section 26(1)(f) of the 1995 Act, namely a breach of the undertakings to have systems in place to ensure the laws relating to the driving and operating of vehicles will be observed and in particular in relation to drivers’ hours, working time directive, tachographs, driver licence checks and load security. I addition to the failure to properly meet statutory requests for data and information, there are two further aggravating features namely: -

i. Mr Smith told the Examiner that OTC had approved Romford as an operating centre for the vehicle. It was only when the Examiner subsequently checked VOL that he became aware that this was not the case. That aspect of the Traffic Examiner Visit Report was given the highest (poor) rating of a 6, but if Mr Smith was taken at his word it would have been 0 – creating a false picture and hiding an offence.

ii. Mr Smith deliberately misled the Traffic Examiner as to the number of vehicles in possession and in use and the number of drivers. Mr Smith admitted at the hearing that since at least 13 February 2023 Hi-Stanford Scaffolding Ltd has operated more than the one vehicle authorised. Since that date it has operated WA14ATN and WA14ATO. Mr Danny Wall has been employed since February 2023 and driven the specified vehicle and the two tractor units and trailers. Since approximately June 2023 Mr Patryk Szostak has also been employed and driven the specified and non-specified vehicles.

It is impossible to assess the full length of unauthorised use of the operating centre, and it may well have been from around September 2022. This is when it changed its name from Hi-Standard to Hi-Stanford and 2 Tonbridge Road, Romford, RM3 8QE is also the Operating Centre of Stanford Scaffolding Limited (see below). I find that it occurred from at least the 13 February 2023 through to the interim grant to regularise the position in August 2023. It follows I make an adverse finding under Section 26(1)(a) of the 1995 Act. Unauthorised use of an operating centre is also a criminal offence, as per Section 7(2) of the 1995 Act. It is a breach of undertaking to operate more vehicles than authorised and I make that adverse finding under section 26(1)(f) of the 1995 Act. It is also an offence to use more vehicles and trailers than authorised as per Section 6(8) of the 1995 Act. As the Operator has failed to adduce all of the data it has not been possible to assess the extent of the illegal operation between 1 February 2023 – 30 April 2023 and the three months prior to the Public Inquiry. The Operator has failed to produce all of the vehicle data and driver defect sheets. It failed to notify a material change within 28 days (maintenance contractor), a breach of a condition on the Licence. I make an adverse finding accordingly under section 26(1)(b) and (h) of the 1995 Act.

Certain admissions are made in relation to “use” of additional vehicles in the representations dated 8 January 2024 but when the full statutory records are not made available then the veracity of any admissions and the level of offending cannot be effectively assessed. The representations themselves include false statements, despite being signed by Mr Smith. By way of example, it is stated at paragraph 34 that vehicle WA14ATN has been VOR since 25 September 2023. The driver card data demonstrates the vehicle in use in November 2023. The only preventative maintenance inspection sheet for the vehicle is dated 24 July 2023 with an unladen brake test the following day. There is also a brake test dating back to the 16 October 2020. There are no driver defect sheets and no vehicle unit data. From the driver cards provided it was driven between the 27 November 2023 and the 30 November 2023, but the vehicle unit data would have shown whether there is another driver which Mr Smith has failed to declare. In relation to WA14ATO the data provided was corrupted and the Examiner was simply given a general email from Aquarius around some challenges since the 7 December 2023. That is not an explanation as to why data is not supplied and what steps were taken once it knew it may be a problem. The Licence requirement is for data to be produced as required. There is no evidence, for example, that it was taken to a calibration centre to retrieve data. Mr Smith was unable to help as he went away with his family between the 27 December 2023 and the 12 January 2024 leaving it to his ‘transport supervisor’ and others to deal with anything outstanding. On 27 November 2023 both tractor units and trailers were out working but the only driver defect sheets produced for those vehicle are in December. Similarly, WA14ATO was in use on the 10 November 2023 but there is no driver defect sheet.

It is of utmost seriousness not to produce all data and records to prevent a full assessment of the extent of illegal operation. Mr Smith says his whole point of attending on 15 January 2024 was to tell me the whole truth. He tried to put his hand up at the outset of the Examiner’s evidence, when he thought that I had misunderstood the representations about the use of more than one vehicle. I reminded the Inquiry that I was testing the veracity of his signed statement/representations with the Examiner from the data and records because the representations clearly included some inaccuracies even on the limited prior information I had.

Hi-Stanford Scaffolding Ltd changed its name in September 2022. That is the same time that it became the registered keeper of KX64TWV, WA14ATN and WA14ATO. On 9 August 2023 Mr Smith told OTC that he changed the name from Hi-Standard to Hi-Stanford when he acquired the assets and active contracts (my emphasis) of Stanford Scaffolding “to appeal more to the current contracts that the company had to give them peace of mind the same staff members just new owner and a more professional approach”. Based on that letter and the registered keeper checks it would suggest that the Operator has been operating at least three vehicles and two trailers since September 2022. Mr Smith says that although he became the keeper of the vehicles no money changed hands in September 2022, it was just part of the intention of Hi-Stanford taking over Stanford Scaffolding Ltd if it could not avoid liquidation. This does not align with reference to ‘acquired the ‘assets’ and ‘active contracts’ or the timing of the name change when linked with the fact they could have both been co-located at the same Operating Centre. I was told that the deal effectively had to be ‘done again’ with the liquidators to ensure that the transaction was at an appropriate value. Mr Smith told me that is why he now gives me the active date for takeover of 13 February 2023. This is somewhat unclear when linked to the company not going into liquidation until 13 March 2023. The statement of affairs is unclear. I asked my office to write to the liquidators to benefit my understanding for these proceedings. The Liquidator confirmed “..that Stanford Scaffolding Ltd (“the Company”) ceased trading on 8 February 2023 and the Company was subsequently placed into liquidation on 13 March 2023.  I can also advise that Hi-Stanford Scaffolding purchased the business and assets of the Company on 13 March 2023.” This does not clarify the extent of which entity was using the vehicles. If both were trading until February 2023, the 2022 name change would put them in competition with similar names for many months. This would not have benefited Stanford Scaffolding Limited. The Operator Licensing regime requires transparency. This arrangement is, at best, opaque and confusing.

There are some positives as identified in the Examiner’s Supplementary Report. I also received future promises of further improvements. After the hearing I received the Contract for Services for VIP Transport Management Services Limited, which includes assurance from VIP to notify my office direct if its services are dispensed with or VIP terminates the arrangement. However, there are some cases where it is only necessary to set out the conduct in question to make it apparent that good repute is lost, and a Licence should be revoked, and an Operator put out of business. The authority for that is 2012/034 Martin Joseph Formby t/a G&G Transport, 2012/020 A+ Logistics Ltd. Although this is a Restricted Licence, the principle is apposite on the facts of this case. The serious and persistent breaches of conditions and undertakings, the offences committed, the lies and misleading statements made and failure to produce data and records fundamentally undermines trust to a fatal degree. The positives hold limited weight in the face of the above. I do not trust Mr Smith, with or without a transport consultant maintaining oversight. He has demonstrated behaviours which involve an unhealthy ability at deceit when he chooses.  Accordingly, I have reached the decision set out in paragraph 1 above.

4.6 Disqualification

In terms of potential disqualification, the relevant case law and principles are set out in Chapter 13 of the Upper Tribunals Digest of Traffic Commissioner Appeals (2023) and Statutory Document No. 10 paragraphs 64 – 69 and 107 – 109. Disqualification is a potentially significant infringement of rights, and the Upper Tribunal has indicated that whilst there is no ‘additional feature’ required to order disqualification the Operator/individual are entitled to know the reasons. Disqualification is not always ordered in addition to revocation. As per 2009/011 Katherine Oliver and J W Swan & Partners, Catch22Bus Limited, Philip Higgs v The Secretary of State for Transport [2019] EWCA Civ 1022:      

“The case law indicates a general principle that at the time the disqualification order is made that the operator cannot be trusted to comply with the regulatory regime and that the objectives of the system, the protection of the public and fairness to other operators, requires that the operator be disqualified. Each case must turn on its own merits”.  

It follows that there are cases in which the seriousness of the conduct is such that revocation and disqualification are necessary for the purposes of enforcing the legal framework. I recall the reminder by the then Transport Tribunal in 2007/459 KDL European Ltd, which included:

“We are satisfied of the need “to make an example of the operator so as to send a warning to the industry as a whole”.  This is consistent with the approach by the five-judge Court of Session in the Thomas Muir case (see paragraph 2(xiii) above) where deterrence is expressly mentioned (“in particular for the purpose of deterring the operator or other persons from failing to carry out their responsibilities under the legislation”).  This is not by way of punishment per se but, as Lord Cullen said, is “in order to assist in the achievement of the purpose of the legislation”.  

I am satisfied again that this is such a case. Hi-Stanford and Mr Smith have posed a serious risk to safety over a sustained period. It operated more vehicles than authorised with bare lip service to many of the conditions and undertakings. In doing so it has also gained a significant unfair competitive advantage against the other scaffolders with an Operator Licence in that area. Traffic Commissioners are committed to maintaining the level playing field that all operators are entitled to expect. This is essential to maintain the integrity of the operator licensing regime and protect the public. I hope that when reading about this case Operators, Transport Managers and Drivers will be in no doubt as to the views which Traffic Commissioners take towards the behaviours demonstrated by this Operator.

In relation to the Senior Traffic Commissioners Statutory Document No 10 the starting point for disqualification after a first Public Inquiry is one to three years, but serious cases may merit disqualification of between five and ten years or indefinite disqualification. As to the appropriate length of disqualification in this case, I have reminded myself of the helpful guidance in 2012/044 Highland Car Crushers Ltd, 2012/56 & 57 Deep Transport Ltd & Midland Transport Ltd:

“All such cases depend on their own particular facts.  While the facts in some cases may reveal similarities it is a rare event to find two cases with exactly the same facts.”

This is the Operators first Public Inquiry but there has been a gross breach of trust over a sustained period. The absence of any regard by Mr Smith for anything other than his own self-interest and commercial needs undermines the bedrock principle for which Operator Licensing regime exists, namely road safety and fair competition.  In my judgement a period of 2 years is appropriate. It does not mean that a future application will be granted. If for example there is further overloading of smaller vehicles then this will negatively impact, and Mr Smith is so warned. Accordingly, I have reached the decision set out in paragraph 2 above. 

It has not been possible to understand the involvement, if any, of Mr O’ Brien and Mr Zabitler in these nefarious practices to date. Accordingly, I have reached the decision set out in paragraph 3 above. 

4.7 Decision

Pursuant to adverse findings under Section 26(1)(a), (b), (c)(iii), (ca), (e), (f) and (h) of the Goods Vehicle (Licensing of Operators) Act 1995 Licence OK2042641 is revoked with effect from 23:45 on 12 March 2024.

Hi-Stanford Scaffolding Ltd and Director Jay James Ronnie Smith are disqualified from holding or obtaining an Operator Licence or being involved in the management, administration and control of any entity that holds or obtains an Operator Licence for a period of two years with effect from 23:45 on 30 April 2024.

If former directors Lufti Zabitler and/or Scott Anthony O’Brien apply to be involved in operator licensing again in any guise, this must be referred to a Traffic Commissioner and not dealt with under any purported delegated authority.

Miss Sarah Bell
Traffic Commissioner

Written confirmation: 20 March 2024