Decision

Decision for M P T Logistics (Lincs) Ltd (OF2054380)

Published 30 March 2023

0.1 In the Eastern Traffic Area

1. Written Decision of the Deputy Traffic Commissioner

1.1 M P T Logistics (Lincs) Ltd (OF2054380)

This is my decision issued following on from the Public Inquiry held on 4 October 2022 in Cambridge. The hearing was adjourned to enable the applicant company to submit additional evidence by 14 November 2022. I have now been able to consider this and have made my determination as set out below.

2. BACKGROUND

The applicant company and its sole director, Mr Mark Steven Pick (dob October 1972), were called in for me to be satisfied whether the company should be granted a standard international licence with an authority for 2 vehicles and 2 trailers. Mr Michael James Abbott (dob September 1981) is the proposed transport manager who attended as requested by the Traffic Commissioner. The company was represented by Mr Oliver of Oliver Legal Solicitors Ltd.

The applicant company had been incorporated on 3 February 2022 and this application received on 13 March 2022 with the proposed operating centre at Yard 1, Brooks Court, Spalding PE11 3FA. The proposed maintenance contractor had been changed from Cars 2 Trucks Ltd to TruckRent Ltd also in Spalding on a 6 weekly basis for vehicles and trailers. No interim had been granted.

The applicant company was notified in a letter from the Central Licensing Office (CLO) that the Traffic Commissioner had decided to convene a Public Inquiry due to “Mr Pick’s previous licensing history and attendance at multiple Public Inquiries.” It was considered “necessary to see the person and hear from him directly.”

The grounds set out in the calling letter of 30 August 2022 for me to consider were good repute, financial standing, professional competence, including the designated transport manager not being responsible for a greater number of or vehicles as the Traffic Commissioner considers appropriate, as well as satisfactory arrangements and facilities pursuant to sections 13C and 13D.

Mr Pick has been involved with the following licences:

i. OF1036062 Mark Steven Pick

This licence was granted on 23 August 2004 and surrendered on 1 December 2017. Mr Pick was called to Public Inquiry in May 2016 following a traffic examiners/vehicle examiners investigation. Mr Pick’s repute as an operator was found to be severely tarnished and the licence was curtailed to an authority of 2 vehicles 3 trailers for 21 days by Traffic Commissioner Richard Turfitt.

ii. OF2007052 Mark Pick Transport Ltd

This licence was granted on 16 November 2017 and revoked on 27 July 2021 following a Public Inquiry. Mark Pick was named as a company director from 20 September 2017 to 29 October 2018. Although Mr Pick was not a company director at the time of the Public Inquiry, he did attend as he was acting as a manager for the operator. Deputy Traffic Commissioner Nick Jones stated in his written decision that any future application involving Mark Pick was to be referred for consideration by a Traffic Commissioner.

I adjourned the Public Inquiry with an extended deadline because Mr Pick would be abroad from 6 to 27 October 2022 and I made the following directions that were complied with by the deadline;

By 14 November 2022 the applicant company’s solicitors will provide to the East of England Office of the Traffic Commissioner documentary evidence together with supporting submissions relating to;

i. Mr Pick’s contention that between 3 May 2022 and 4 July 2022 all but [REDACTED] of the monies in the applicant company’s Barclay’s bank account ending [REDACTED] set aside to demonstrate financial standing was withdrawn for the purpose of supporting the sponsorship of his step son’s immigration application;

ii. Mr Pick’s contention that the credits of [REDACTED] transferred by Mrs Pick on 5 and 26 September 2022 and the two credits of [REDACTED] transferred by Mr Pick on 20 and 22 September 2022 into the applicant company’s Barclay’s bank account ending [REDACTED] in order to demonstrate financial standing in advance of the Public Inquiry were monies that were no longer required to support the sponsorship of his step son’s immigration application.

iii. The nominated transport manager, Mr Abbot’s decision regarding his employment by DHL Supply Chain and any associated changes in his current overall work commitments.

3. EVIDENCE

3.1 MR PICK

Mr Pick fully accepted the financial issues that had led to the difficulties in terms of his first licence OF1036062 Mark Steven Pick that had eventually been surrendered. Initially he had been the main driver, progressing to international work when the licence was upgraded in 2006. The transport manager was his long term partner Lisa Lonsdale. Mr Pick accepted that he had left her to manage the financial side of his business. This included tax and VAT liability to HMRC. Their relationship ended in 2014 when Ms Lonsdale also resigned as transport manager and left the business entirely. Mr Pick confirmed that he had not been aware of the size of the HMRC debt at that time. He also blamed a factoring agreement for contributing to his financial difficulties.

Mr Pick and Ms Lonsdale had owned a property together. Mr Pick decided to buy out Ms Lonsdale’s share and attempted to re-mortgage. It was not clear at that stage whether his accountants were also aware of the sizeable HMRC debt. Mr Pick took advice and agreed to pay it back at [REDACTED] per month. A total of [REDACTED] was paid, until according to Mr Pick unexpectedly HMRC petitioned him for bankruptcy relating to a VAT liability of more than [REDACTED].

As a result of the bankruptcy in April 2018 he lost his house and solvency. Evidence was helpfully produced including the creditors’ report and confirmation that Mr Pick was no longer is listed in the Individual Insolvency Register. Mr Pick confirmed that he had learnt the hard way about his responsibilities to manage the finances of his business and the requirement to notify the Traffic Commissioner’s Office of any material change.

Before his bankruptcy Mr Pick had set up Mark Pick Transport Ltd and obtained a standard international licence in 2017. He was named as the sole director, but had to resign when he was declared bankrupt. The company was then sold to Andrew Mowbray in 2018, but Mr Pick remained working as the operations manager and as a driver. He attended the Public Inquiry held on 27 July 2021 in his capacity as operations manager. Notably, Mr Mowbray did not attend, despite being aware that the request to surrender the licence had been refused and that the Public Inquiry was proceeding. There were serious compliance issues, including that the operator had exceeded its authorisation and obtained a commercial advantage.

The licence was revoked with an indefinite disqualification of the company and the former transport manager was also disqualified. In terms of Mr Pick’s involvement in the company, the Deputy Traffic Commissioner concluded there was insufficient evidence to find that Mr Pick was a de facto director, even though there had been some suspicion of that. The Deputy Traffic Commissioner directed that any future application involving Mr Pick should be referred to the Traffic Commissioner.

When considering this application CLO had also identified a potential issue with the funding relating to a [REDACTED] loan made by Mrs Gina Pick to the applicant company bank account to enable it to meet the requirement of financial standing. A letter had been produced from the applicant company’s accountants confirming that the loan was recorded as a liability in the accounts. A balance of [REDACTED] to make up financial standing came from Mr Pick’s personal account.

When considering the bank statements provided for the Public Inquiry, I identified that the balance at one stage had been reduced to [REDACTED] rather than the required amount of £12,500 to demonstrate financial standing. Mr Pick confirmed that he had taken a series of payments out of the company’s bank account to top up his wife’s bank account. He explained that she had recently started a new job and that her level of earnings was lower than usual.

As Mr Pick’s evidence unfolded, it became clear that he and his wife were sponsors for her son in relation to this immigration application. Mr Pick accepted that between 3 May 2022 and 4 July 2022 all but [REDACTED] of the monies in the applicant company’s bank account set aside to demonstrate financial standing was withdrawn for the purpose of supporting the sponsorship of his stepson’s immigration application. Specialist immigration solicitors had been instructed to assist the family with the stepson’s application.

The required balance of £12,500 had been restored with credits of [REDACTED] transferred by Mrs Pick on 5 and 26 September 2022 and two credits of [REDACTED] transferred by Mr Pick on 20 and 22 September 2022 in order to demonstrate financial standing in advance of the Public Inquiry. [REDACTED]

Notably, Mr Pick did not seem to realise the implications of removing funds from his company’s bank account and transferring them to his wife’s personal bank account, particularly when the applicant company was required to demonstrate financial standing for the purposes of its application. I was concerned about Mr Pick’s attitude to his company’s funds and why such sums had been transferred to his wife, especially given Mr Pick’s financial history.

Accordingly, I sought reassurances from Mr Pick that he fully understood his responsibilities as a director to his company and in relation to its finances. As part of seeking that reassurance, I directed that supporting evidence was provided to support Mr Pick’s contentions as to why the monies had been removed from the company account and in respect of the funds Mr and Mrs Pick were required to demonstrate in terms of the immigration process involving his stepson.

In relation to maintenance and drivers’ hours compliance, Mr Pick proposed to operate an 44 tonne refrigerated artic, with himself as the driver working 4 days on and 4 days off. In terms of his other work as a director he would ensure that manual entries were made. The Aquarius system would be used for automatic tachograph downloads and for the driver walk round checks.

Mr Pick planned to secure his vehicle from TruckRent based in Spalding. They would carry out the 6 weekly PMIs with laden roller brake tests every inspection. Mr Abbott would be able to access all the records remotely. It was planned that he would work 2 hours every Saturday and would be paid [REDACTED] a month. Mr Pick believed Mr Abbott was experienced and would be an effective transport manager.

3.2 MR ABBOTT

Mr Abbott qualified as a transport manager in 2018. He confirmed the arrangement would be to work 2 hours on Saturday at the operating centre and that he would be able to access the records remotely to check them as required. His main employment was with DHL Supply Chain as a transport compliance manager for 37.5 hours week. In addition, he was on two other licences OF2050141 iDrive Transport Ltd authority of 12 vehicles and 25 trailers for 14 hours a week and OF0228530 Richard Hard authority of 1 vehicle and 1 trailer for 2 hours a week at the same operating centre as the one proposed for this applicant company 28 miles from his home, so he would visit both on Saturdays.

I was concerned that Mr Abbott did not have the capacity to undertake the time required for this licence should it be granted due to his existing commitments and travelling time. He assured me that he would be able take calls at work when necessary and could access the records as required from his tablet. The systems would be implemented using Aquarius which he was familiar with for tachograph downloads and analysis, driver walk round and PMIs.

Mr Abbott accepted that he worked a very long week, but he had already decided that he wanted more flexibility to do other work including as a FORS auditor and driver CPC training, so he had applied on 14 September 2022 to work part time and had meeting arranged with DHL to request reduced hours. He informed me that if his request was denied then he had already decided to leave DHL so he could undertake a variety of work. Therefore, he reassured me that he would have sufficient time to take on this role for a minimum of 2 hours per week and that he would support the applicant company fully by implementing and maintaining effective systems.

4. WRITTEN SUBMISSIONS

I am grateful to Mr Oliver for his comprehensive written submissions. He has confirmed the history of how the applicant company’s bank account was set up and funded in part by Mrs Pick. A full explanation has been provided for the reasons why those funds were subsequently withdrawn including that; [REDACTED] “The loan given to the company by Ginalynn Pick was withdrawn to provide additional financial support to the family finances whilst the application for an O licence was being considered. When it became clear that the company would need the money back in its back account, it was returned in a timely manner.”

The explanation goes on to state that the Mr and Mrs Pick and her son were deemed to be; [REDACTED]

Mr Oliver has confirmed that the [REDACTED]

Mr Oliver submits; “that the way the money was used, once it was withdrawn from the Applicant’s bank account, is not relevant to the Applicant’s ability to operate goods vehicles compliantly. We submit that the continuing requirement for financial standing commences from the grant of the O licence and not from the point of application where the test and the burden of proof are different.”

Mr Oliver further states; “When Mr Pick was a sole trader he could have made the withdrawals from his business account without question. However, as a director of a limited company the position is different. This is a mistake that could easily be made by somebody making the transition from operating as a sole trader to operating as a limited company. The Applicant accepts and now understands that his decision to withdraw the money from the company whilst waiting for the determination of the O licence puts him at risk of being in breach of his statutory responsibilities as a Director and calls into question whether the Applicant will meet the continuing requirement to be of appropriate financial standing into the future.”

Mr Oliver further submits; “The Applicant has seen at, first-hand how seriously the Traffic Commissioner takes the assessment of financial standing and he may yet learn an important lesson about his directors responsibilities and the use of the company’s assets. The Applicant seeks to demonstrate that he can be trusted to operate compliantly in the future. The evidence presented of compliance systems, arrangements for Transport Management and would suggest that this is an operator who could be trusted to operate compliantly. The Traffic Commissioner is also asked to have regard to the efforts made to comply with the repayment of HMRC debts prior to the decision by HMRC to file for bankruptcy. We submit that the error made with financial standing is not one which will be repeated and that it should be taken in the balance when deciding if this is somebody who could be trusted to operate compliantly.”

With regard to Mr Abbott’s situation, Mr Oliver has explained that; “Michael Abbott has confirmed that since the Inquiry that DHL were unable to offer him a part time role and that he is currently working his notice with that employer. His last day of work at DHL will be 23rd December 2022. This means that Mr Abbot will have more time available to devote to his Transport manager responsibilities.” I also note that OF2050141 iDrive Transport Ltd surrendered its licence on 10 December 2022, so Mr Abbott will also no longer have that commitment.

In conclusion, Mr Oliver has invited me to grant the licence in full with a 6 monthly finance undertaking or alternatively to grant a time limited interim licence to enable the applicant company to demonstrate that it can meet financial standing.

5. FINDINGS

As the gatekeeper to the operator licensing system, it is my role to ensure that the statutory criteria are fully met. Section 13A(2) states that an applicant for a standard licence must be of good repute in accordance with paragraphs 1 to 5 of Schedule 3. As the sole director, Mr Pick in essence embodies the applicant company. In Aspey Trucks Ltd 2010/49, the Upper Tribunal highlighted the difference between finding a loss of repute for an existing operator and whether a new applicant to the industry met the standard to be of good repute;

“In a case such as this, the Deputy Traffic Commissioner was not looking at putting someone out of business. Rather, he was deciding whether or not to give his official seal of approval to a person seeking to join an industry where those licensed to operate on a Standard National or Standard International basis must, by virtue of S.13(3), prove upon entry to it that they are of good repute. In this respect, Traffic Commissioners are the gatekeepers to the industry and the public, other operators, and customers and competitors alike, all expect that those permitted to join the industry will not blemish or undermine its good name, or abuse the privileges that it bestows. What does “Repute” mean if it does not refer to the reasonable opinions of other properly interested right-thinking people, be they members of the public or law-abiding participants in the industry?”

In this case, Mr Pick is not new to the industry. He held sole trader licence OF1036062 Mark Steven Pick from 2004 to 2017. At the Public Inquiry in 2016 his repute as an operator was found to be severely tarnished and the licence was curtailed for 21 days. Mr Pick then set up a limited company that successfully applied for licence OF2007052 Mark Pick Transport Ltd which replaced the sole trader licence in 2017. That business was sold in 2018, but Mr Pick was still associated with the company as its operations manager and attended the Public Inquiry in July 2021 when the licence was revoked.

Therefore, I find that Mr Pick has extensive experience as an operator, both as a sole trader and also as a director. In terms of director’s responsibilities. Mr Pick should have been well aware that the funds in the applicant company’s bank account were not his to remove for personal reasons. The funds had been formally loaned to the company by his wife. The removal of the funds was not done in a formal way to repay that loan. Instead, Mr Pick withdrew the money in multiple transactions, telling me it was to help boost his wife’s income that was lower than usual because she had just taken on a new job.

It is understandable that [REDACTED]. As Mr Oliver has highlighted, perhaps all the more so because his wife had helped him with the loan to the applicant company at the outset. However, no matter how justified Mr Pick might have felt in withdrawing all but [REDACTED] of the £12,500 set aside to demonstrate financial standing, I find that he was wrong to do so. Furthermore, he was in breach of his fiduciary duty as the sole director of the applicant company.

Clearly, Mr Pick has a bad financial history with his personal bankruptcy, although I give him credit for moving forward so that his bankruptcy has been discharged. However, undoubtedly, Mr Pick should have known better than to withdraw his company’s monies for his personal use. Overall, I do not accept Mr Oliver’s submission; “This is a mistake that could easily be made by somebody making the transition from operating as a sole trader to operating as a limited company.”

My concern is whether Mr Pick can be trusted to correctly manage the finances of the applicant company and to fully comply with the financial standing requirements. This would include notifying the Traffic Commissioner of material change should there be a downturn in the applicant company’s financial situation. Therefore, these concerns go the heart of whether I can be satisfied that the applicant company is of good repute. To that end, Mr Oliver has submitted that Mr Pick “has seen at first-hand how seriously the Traffic Commissioner takes the assessment of financial standing and he may yet learn an important lesson about his directors responsibilities and the use of the company’s assets.”

Overall, I did find Mr Pick to be open and honest with me, even when answering difficult and challenging questions. Undoubtedly, he was disappointed that this application was not granted at the Public Inquiry. Furthermore, due to Mr Pick’s planned family holiday in the Philippines there was then an extended adjournment required before the required written submissions could be provided. There has also then been some further time before I have been able to consider this case.

Therefore, Mr Pick has had plenty of time to reflect upon his inappropriate actions as a director and has also had time to resolve to improve his level of responsibility in accordance with the standards required of compliant operators. Mr Oliver has submitted that Mr Pick “seeks to demonstrate that he can be trusted to operate compliantly in the future.”

By a fine margin after weighing up all the various elements that comprise good repute in this case, I am prepared to find the applicant company and Mr Pick as its sole director have narrowly satisfied me the requirement of good repute is met.

In terms of financial standing, I accept Mr Oliver’s submission that this was demonstrated for the period of 28 days before the Public Inquiry. Given the history and that the hearing was some ago, Mr Pick will have known the requirement to notify the Traffic Commissioner’ Office if there has been any change. Since there has not been any notification to that effect from Mr Oliver, I conclude that financial standing has been demonstrated. However, a finance undertaking will be required for 6 months time, which Mr Pick must ensure is fulfilled.

In terms of the proposed transport manager, I find that Mr Abbott demonstrated a sound knowledge of transport management. He provided cogent evidence regarding the systems that he would implement and I am satisfied in principle that he could effectively and continuously manage the transport activities.

My reservations about Mr Abbott’s appointment centred around the 37.5 hours that he worked for DHL Supply Chain as a full time transport compliance manager, along with the other 2 licences on which he was nominated with a further commitment of 16 hours. Accordingly, I was concerned whether Mr Abbott would have sufficient time to dedicate to this new licence that required additional time at the outset to set up all the systems.

As it happened, Mr Abbott was seeking to reduce his hours with DHL and had a meeting scheduled with them. Mr Oliver has confirmed that DHL did not agree to a reduction. Therefore, Mr Abbott tendered his resignation, as he had told me that he would if he could not reduce his hours in order that he could work more flexibly. His notice period ends on 23 December 2022. I have also noted that OF2050141 iDrive Transport Ltd surrendered its licence on 10 December 2022, so Mr Abbott will also no longer have that commitment.

Accordingly, due to this substantial change of circumstances I am satisfied that Mr Abbott has sufficient time to dedicate to this licence. Since there has been no indication to the contrary, it is assumed that Mr Abbott remains available. It was agreed at the Public Inquiry that he would commit a minimum of 2 hours per week.

I also find that the requirements of section 13C and section 13D are fully met.

6. DECISION

With regard the grounds set out in the calling letter, I find the following are met;

• Section 13A(2)(b) - good repute;

• Section 13A(2)(c) - appropriate financial standing;

• Section 13A(3) - designated transport manager who is a resident of the United Kingdom, of good repute, professionally competent and can effectively and continuously manage your transport service

• Section 13A(4) - designated transport manager who is not responsible for a greater number of transport undertakings or vehicles as the traffic commissioner considers appropriate;

• Section 13C(2) - satisfactory arrangements to comply with the law regarding drivers’ hours;

• Section 13C(3) - satisfactory arrangements to ensure that vehicles are not overloaded;

• Section 13C(4) - satisfactory facilities and arrangements for maintaining the vehicles in a fit and serviceable condition;

• Section 13D - sufficient financial resources to ensure that your vehicles can be maintained in a fit and serviceable condition.

Overall, I am prepared to grant this licence in full, since at this stage of the proceedings a time limited interim would not be appropriate. I accept the finance undertaking offered in principle at the Public Inquiry, which Mr Oliver has since reiterated remains agreed;

By 15 July 2023 the operator will provide to the Eastern Area Office of the Traffic Commissioner documentary evidence to demonstrate that it continues to meet the requirements of financial standing to include bank statements for accounts in the company name for the months of April, May and June 2023.

As a note of caution, Mr Pick needs to understand that it has been a finely balance decision that I am trusting him and the applicant company to be compliant. Should there be any future compliance issues, it is likely that the applicant company would be called into Public Inquiry and Mr Pick’s past compliance history would have a distinct bearing on the outcome in terms of any regulatory action.

In conclusion, I grant the application for a standard international operator licence for 2 vehicles and 2 trailers, subject to payment of the licence fee.

Gillian Ekins

Deputy Traffic Commissioner

Eastern Traffic Area

20 December 2022