Decision

Decision for JT Construction (NE) Ltd (OB2042074)

Published 6 April 2023

0.1 In the North Eastern Traffic Area

1. Written Decision of the Deputy Traffic Commissioner

1.1 JT Construction (NE) Ltd (OB2042074)

1.2 ## Background

JT Construction (NE) Ltd holds a restricted operator’s licence for two vehicles. The licence was granted in December 2021: there have never been any vehicles specified on the licence, although the company has operated two HGVs. The sole director of the company is Towson Smith.

1.3 October 2021 public inquiry

Deputy Traffic Commissioner (DTC) Evans granted the licence after a public inquiry held to consider the application in October 2021. There had been concerns about Towson Smith’s previous licensing history: he had been a director of JT Construction Ltd which had been issued with two warnings (one of them severe) for maintenance shortcomings before its licence was revoked in July 2021 after it entered liquidation. DTC Evans concluded that on balance the application from the new company was capable of grant, but sought (and received) an undertaking from the company that it would arrange for an independent compliance audit to be carried out by 31 August 2022, with a copy of the audit report – together with the operator’s proposals for implementing the recommendations – to be submitted to the traffic commissioner within 14 days of the operator’s receipt of the report from the auditor.

Nothing had been received by 15 September 2022, so on 16 September 2022 the case worker sent a chasing letter to the company, reminding it of the undertaking. An audit was carried out on 20 September 2022 and the report was submitted to the traffic commissioner six days later.

1.4 Compliance audit

The audit reported serious and widespread non-compliance. Amongst the issues identified were:

i) the company was using an unauthorised operating centre;

ii) no vehicles were specified on the licence, although two were being operated;

iii) preventative maintenance inspection intervals had been exceeded on occasion;

iv) no brake tests of any kind were being carried out;

v) the company did not possess a tachograph card so no downloads were being carried out on the vehicle units, which were still locked in to the previous owners;

vi) the operator lacked the equipment to carry out downloads of driver tachograph cards. No drivers’ hours data could therefore be analysed or any offences identified. The driver (director Towson Smith) was taking print-outs each day instead.

The audit report made 83 recommendations, among which were the need to apply to use the current operating centre as soon as possible and the urgent need for Mr Smith and other staff to attend an operator licence management course.

Despite the terms of the undertaking, the company did not submit any details of how it proposed to implement the recommendations made.

The traffic commissioner’s office wrote to the operator on 10 October 2022, stating that it was now required to submit an application for the new operating centre, along with an explanation of why it had failed to do so before. The company was also reminded that it was required to submit proposals for implementing the audit’s recommendations. A reply was requested by 24 October 2022.

1.5 “Propose to revoke” letter

No reply was forthcoming either by 24 October or later. The traffic commissioner’s office therefore wrote on 17 November 2022 proposing to revoke the licence under Section 26(1)(a), (e) and (h) of the 1995 Act. The operator was given the opportunity to request a public inquiry, which it duly did in a one-line email dated 29 November 2022.

2. Public inquiry

The public inquiry was held in Leeds on 2 March 2022. In advance of the inquiry I received a submission from Logico, the transport consultancy which had carried out the audit, saying that while the degree of the operator’s non-compliance could be placed in the severe to serious category (according to the definition set out in the Senior Traffic Commissioner’s Statutory Guidance Document No 10), the consultancy had now provided the operator with policies relating to compliance and it was submitted that, with the consultancy’s help, a compliant operation could be achieved. Logico stated that the company’s vehicles had been parked up since 23 September 2022 (although it could not provide definitive evidence of this) and suggested that, while revocation of the licence would be disproportionate, a short suspension or curtailment could be survived.

Present at the inquiry was Towson Smith, director. The company was not represented. I asked Mr Smith why he had failed to meet the deadline for the audit set out in the undertaking, especially after DTC Evans had made clear in his public inquiry decision that he attached importance to the audit. Mr Smith said that the deadline had simply slipped by: he was not very good with dates.

Mr Smith explained that he had been forced by his previous business partner to quit the original operating centre on the licence. Asked why he had not applied straight away for authority to use the new operating centre he said that he had no defence: it should have been done in a timely manner was but was not.

Mr Smith’s explanation for having failed to act on the audit’s recommendations that he submit an application for the new operating centre and attend an operator licence management course was that he had decided not to do so because he was unsure as to the fate of the licence at the forthcoming inquiry.

I asked why a vehicle had, according to the audit report, gone for 10 weeks without a safety inspection. Mr Smith thought it had been laid up at the maintainer’s premises for some of that time, but an investigation of the mileage readings at various points suggested that this was not the case. There was certainly no VOR record or anything on the maintenance provider’s forms to evidence Mr Smith’s claim.

Mr Smith said that he had left brake testing in the hands of the maintenance provider and had assumed that such testing was being carried out.

3. Findings

After considering the evidence, I make the following findings:

i) the company has used an unauthorised operating centre (Section 26(1)(a) of the 1995 Act refers). No application for the operating centre has ever been submitted, either before it became the operating centre or since;

ii) the company failed to fulfil its undertaking to have an audit carried out by 31 August 2022. The company had to be chased, despite the fact that DTC Evans had emphasised the importance of the audit in his original decision granting the application (Section 26(1)(f) of the 1995 Act refers);

iii) the company has further failed to fulfil its undertakings to ensure that rules on drivers’ hours and tachographs were observed (no downloads ever took place); that vehicle were kept fit and roadworthy (no brake tests were carried out); and that vehicles were operated lawfully (they were never specified on the licence, in contravention of Section 5(6) of the 1995 Act);

iv) the company has not always had its vehicles inspected at the six-week intervals stated in the application (Section 26(1)(e) refers).

4. Balancing act

I carried out a balancing act. On the negative side were the operator’s failure to carry out the audit on time, its use of an unauthorised operating centre, the serious shortcomings both on maintenance and drivers’ hours identified in the audit, and the operator’s failure to follow up the audit by either responding to the recommendations or taking any meaningful improvement action.

I could find very little on the positive side of the balance other than Mr Smith’s honesty in accepting that there was no excuse for his failures. I concluded that the negatives very heavily outweighed any positive factors. I find that the company is therefore no longer fit to hold an operator’s licence (Sections 13B and 26(1)(h) of the 1995 Act refer).

5. Priority Freight and Bryan Haulage questions

I asked myself the Priority Freight question of how likely I considered it to be that the company would comply in the future. The answer is “extremely unlikely”. Towson Smith has shown from his history, which includes his previous company receiving two warnings for maintenance shortcomings and the failure of his new company to fulfil undertakings and operate compliantly, that he cannot be trusted to comply. A negative answer to the Priority Freight question tends to suggest an affirmative answer to the Bryan Haulage question of whether a company deserves to go out of business. In this case we are talking of a restricted licence, and Mr Smith described to me at the inquiry how the company has been able to carry on its pipelaying business without HGVs since September 2022, so revocation of the operator licence should not in fact entail the cessation of the business. But because of Mr Smith’s serious failure to ensure a compliant operation, despite the previous warnings and the concerns expressed by DTC Evans, I conclude that if the company were to go out of business that would be a merited outcome.

6. Decisions

6.1 Revocation of the licence

In the light of the above findings, balancing act and consideration of the Priority Freight and Bryan Haulage questions, I conclude that this licence must be revoked. I revoke it under Sections 26(1)(a, (e), (f) and (h) of the 1995 Act. Because the vehicles have not been operated since September 2022 and the company does not therefore need any further time in which to wind up its HGV operations, the revocation takes immediate effect.

6.2 Disqualification

I have also considered whether to disqualify JT Construction (NE) Ltd and its director Towson Smith from holding or obtaining an operator’s licence and from being the director of any company holding or obtaining such a licence. In considering this, I have had regard to paragraph 105 of the Senior Traffic Commissioner’s Statutory Guidance Document No 10. This suggests as a starting point a disqualification of between one and three years for a first public inquiry. Although this is the company’s second public inquiry, it is the first inquiry which has focused on maintenance and drivers’ hours shortcomings so I will treat it as falling withing the 1-3 year starting point. I have given some credit to Mr Smith for not attempting to disguise the extent of his failures and therefore impose a 12 month disqualification – very much at the lighter end of the scale. However, should he ever wish to re-enter the industry at some point in the future, he will have to work very hard to convince a traffic commissioner at the inevitable public inquiry that he has the necessary knowledge and drive to be trusted to manage a compliant business.

Nicholas Denton

Deputy Traffic Commissioner

2 March 2023