Decision

Decision for Manual Control Limited

Published 22 October 2021

1. IN THE SOUTH EASTERN & METROPOLITAN TRAFFIC AREA

1.1 MANUAL CONTROL LIMITED OK2015176

1.2 FORMER TRANSPORT MANAGER – DAVID SADLER

1.3 GOODS VEHICLES (LICENSING OF OPERATORS) ACT 1995

2. TRAFFIC COMMISSIONER’S WRITTEN DECISION (Short Form) FOR HEARING ON 05 OCTOBER 2021

3. Decision

1. The application to surrender the Licence is refused.

2. Pursuant to adverse findings under Section 26(1)(b), (c)(a), (f) and (h) of the Goods Vehicle (Licensing of Operators) Act 1995 and Section 27(1)(a) of the 1995 Act, the Operator no longer meets the mandatory requirements of good repute and appropriate financial standing. Accordingly, the Licence is revoked with effect from 23:45 on 15 October 2021.

3. Manual Control Limited and Carl James Morris are disqualified from holding or obtaining an Operator’s Licence in Great Britain or being involved in the management, administration or control of an entity that holds or obtains a Licence for an indeterminate period with effect from 23:45 on 15 October 2021 as provided for by Section 28 of the 1995 Act.

The good repute of David Sadler as transport manager is severely tarnished but not lost.

4. Reasons

The history is set out in the case summary and comprehensive Public Inquiry bundle. I do not repeat it here, save where relevant to my findings. This Licence was granted on 22 August 2018 some four months after my written decision for Dolphin UK Limited. I revoked that Licence and included the following narrative:

If Dolphin UK Limited and/or Mr Morris and/or Mr Thorne apply again in the future then the records due to be here today, together with evidence of the Transport Manager’s involvement throughout the same period must be produced.

Mr Morris tells me he was not aware of the 2018 decision as everything had gone to the former Director. The VOL records show that decision was sent to the email address and correspondence address at which the Public Inquiry papers were sent. Companies House and the Decision confirm that Mr Morris was the sole Director and Personal with Significant Control at that point and had been since 8 November 2017. Mr Morris personally attended the hearing in that capacity. Mr Morris avers that Duncan Thorne told him verbally about the revocation only and that he was closing the Company. There was no good reason for Mr Thorpe to be in receipt of the Public Inquiry decision, nor did he have legal status to make the decision to close the business. In my judgement it was more likely than not that Mr Morris did receive the Decision and that is why he did not contact my office for a further copy.

Mr Morris admitted that he was a ‘de facto’ Director from the outset of the Dolphin UK Licence application and this is something that should have been declared for transparency. Mr Morris tells me that the only reason he was not listed as a director when the Operator Licence was applied for was because of his poor credit rating. It follows from my above finding that this assertion requires scrutiny. The Dolphin UK Limited decision is clear that if Carl Morris was named on the Manual Control Limited application it had to be referred and that would have delayed the said application. The referral may have led to the application being refused. When the Accountant told Mr Morris to become a statutory Director in March 2021 Mr Morris still did not notify the Licensing team. In my judgement it was more likely than not that Mr Morris chose to operate under the radar. He did so to ensure that Manual Control Limited obtained and retained a Licence, and ultimately with a surrender accepted prior to the liquidation.

I deal with this aspect from the outset because the history of Mr Carl Morris in relation to Dolphin UK Limited is relevant to what follows. Towards the end of 2019 DVSA investigated Manual Control Limited and the Traffic Examiner’s findings were unsatisfactory. In February 2020, I issued a formal warning upon receipt of undertakings for relevant training and a future independent audit. I had taken into account Mr Sadler’s refresher training in January 2020 in reaching the Decision. In terms of compliance that is effectively the starting point here.

The following month the COVID-19 pandemic impacted Great Britain in unimaginable ways. However, on 17 March 2020, a full week before the first national lockdown the Senior Traffic Commissioner issued an emergency Statutory Document setting out detailed legal and practical advice for Commissioners, Operators, Transport Managers and those who support them. It includes the following:

• What is physically possible may change during the course of the outbreak, but the Office of the Traffic Commissioner has issued additional guidance to operators throughout the course of the restrictions to date: https://www.gov.uk/government/publications/advice-heavy-goods-and-public-service-vehicle-operators-covid-19

• The Senior Traffic Commissioners directs that this must now form part of the decision-making process. In considering the positive and negative aspects of an operator’s approach during the lockdown and subsequent restrictions, traffic commissioners may also have regard to:

• the employment of effective management based on sound risk analysis for instance in the management of maintenance;

• a risk-based approach to the testing of vehicles in prioritising the inspection of older and/or historically problematic vehicles in the transition back to business as usual…

• These should be supported by evidence.

All Directors have a statutory duty under Section 173 and 174 of the Companies Act 2006 to exercise independent judgment, skill, care, and diligence. The duties of the Directors and Transport Managers under the 1995 Act and Regulation (EC) 1071/2009 came into start relief in March 2020.

It is difficult to describe just how disappointing it is to now recount what I have heard from Carl Morris and David Sadler. Mr Sadler did not attend the operating centre or the company office (based at the Directors’ home for the pandemic) between March 2020 and December 2020. This of itself is not fatal in light of the Senior Traffic Commissioners advice and guidance in terms of remote auditing, training etc. However, Mr Sadler did not receive a single piece of compliance paperwork or report in all that time, save for the RHA audit in September 2020. This remained the case after September 2020 despite the number of unsatisfactory aspects and recommendations set out by the RHA.

Even after the September 2020 audit, Mr Alisdair Grey was permitted to drive for the Company. Mr Carl Morris admitted that no driver licence online check had ever been done for Mr Grey. He did say that he knew that a medical was due and the Company had paid for it. However, he was not aware whether the form was sent in or not. Mr Grey’s C+E entitlement expired in 2018 and he was found driving on 2 October 2020 otherwise in accordance with a Licence and committing three hours offences over the course of ten days. Neither the licence or hours offences would have come to Mr Morris’ attention because even after the RHA audit he did not bother to look at any of the analysis that was sent back.

That audit was not sent to my office, it was not a requirement. The requirement was for the audit to be done and any aspects that needed improving to be addressed. Even then Mr Sadler allowed his name to be attached to the Licence without any pre-conditions around receipt of compliance documentation. At the beginning of December 2020 Carl Morris confirmed to Mr Sadler that nothing had changed, but still Mr Sadler allowed his name to be attached to the Licence. Mr Morris for his part tells me that nothing improved because he was too busy trying to keep the business going under the burden of financial challenges including the payment plan with HMRC. Essentially Mr Morris has put commercial need ahead of compliance and Mr Sadler has allowed this to happen in his name.

Mr Sadler has expressed his deep regret that his loyalty and friendship with James Morris allowed this unsatisfactory situation to continue for so long. When I asked Mr Sadler about the involvement of Carl Morris pre pandemic, he confirmed that Mr Carl Morris was driving full time but also attending his weekly compliance meetings with James Morris and his wife. When pressed by me, Mr Sadler confirmed that it was Carl Morris that took the lead. Mr Sadler at no point gave any thought to the impact of those Sunday meetings on Mr Carl Morris’ rest periods as a full-time driver. Further when James Morris had to step back, Mr Sadler did not notify my office that it was a non-director that was now in control of the transport operations. That was a material change and both should have notified it.

The Company went into liquidation in July 2021 and therefore it is inevitable that I make a finding that financial standing is no longer met. In fact, the company entered a payment plan with HMRC in January 2020 and since that time it has not been able to demonstrate financial standing over and above the ins and outs of business. The financial challenges were not notified to my office. I do give credit to the Operator that when it was notified of possible insolvent trading and that it should stop trading a surrender application was lodged at my office. However, considering the non-compliance and issues already in my purview I determined that the Public Inquiry should proceed for the Company and its former Directors (control having been relinquished to the liquidators).

Conclusion

Mr James Morris and Mr Carl Morris have effectively been the Directors from the date the Licence was granted. Mr Sadler told me that it is Mr Carl Morris that has always taken the lead and Mr Carl Morris did not challenge that. I am entitled to know whom I am regulating and there should be transparency. In my judgment it is an aggravating feature that this Licence was obtained without any reference to Carl Morris despite my decision in relation to Dolphin UK Ltd. Even after a warning in February 2020 there have been significant failures by this Operator. A deliberate decision not to engage with the Transport Manager to prevent a proper check on compliance is calculating and unscrupulous. The failure to produce evidence to DVSA under the Section 99ZA statutory letter is inexcusable. Turning a blind eye to obvious indicators of non-compliance, including the audit, and carrying on regardless for commercial gain has no part in Operator Licensing.

There is also the arrangement between Mr Carl Morris and Mr Dawood Fatemi Noroozani. Mr Carl Morris told the Inquiry that Mr Noroozani (who he calls ‘Dave’) approached him just before COVID to obtain access to Euro 6 vehicles. This was because Mr Noroozani said he could not obtain the necessary financial rating to lease. Mr Carl Morris, for reasons which never became clear, obtained two Scania vehicles on three year finance and then immediately hired them out to Mr Noroozani. Mr Carl Morris said the arrangement was for no profit, simply payment of the monthly payments to the lease company. When I asked why, he said that AFL Transit Limited were undertaking transport for Manual Control Limited as Manual Control did not have enough drivers or space on its Licence. When I asked how he knew Mr Noroozani had a Licence he said he saw the discs in the window. Mr Carl Morris told me that he understood Mr Noroozani to be the owner of AFL Transit Limited. When I pointed out that the sole director is a Mr Andrei Dan and there was nothing on Companies House in relation to Mr Noroozani, Mr Carl Morris expressed surprise. In light of his previous disingenuous behaviour it is unclear what the truth really is. However, by his actions Mr Carl Morris and Manual Control Limited have handed over two in-scope vehicles to an individual who has no Operators Licence or formal direct or indirect connection to an Operators Licence. Mr Noroozani features in the written decision of Deputy Traffic Commission John Baker in relation to OK2013271 Super Speedy Transport Limited and OK2027956 Speedy Transit Limited. Mr Noroozani’s history is that of being named on revoked Licences and then linked to licences and applications where he is not named.

Mr Carl Morris has demonstrated that my concerns about him in April 2018 were justified. Mr Morris has continued to pose a significant risk to road safety and undermined the level playing field that is so important to road safety and fair competition. Towards the end of his evidence Mr Morris described mental health issues whereby he was effectively blinkering himself and pushing everyone else away and just trying to keep things going. There has been no medical evidence to support this. In any event as soon as an individual is aware that they may not be able to give matters their full attention, they do not add to their responsibilities - they seek help, or they park up the vehicles. Road safety does not permit any other approach.

In my judgment Mr Carl Morris has demonstrated over a period of years, not just months, that he cannot be trusted. It is Mr Carl Morris that has taken the lead on Manual Control Limited since the Licence was granted and his conduct impacts on its good repute. Mr James Morris has effectively allowed himself to be led by Carl Morris and therefore he has failed to exercise independent judgment, skill, care, and diligence. The Company has already been put out of business by virtue of the liquidation, but I make it clear if it was still operated, I would have revoked the Licence with immediate effect based upon the evidence and formal findings set out above.

Senior Traffic Commissioners Statutory Document no. 10 includes at paragraph 58: 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 it is not a direction which should be routinely ordered. There may be cases in which the seriousness of the operator’s conduct is such that a traffic commissioner may properly consider that both revocation and disqualification are necessary for the purposes of enforcing the legislation. The provisions are in general terms, consistent with the concept of deterrence, but assessment of culpability and use of words such as penalty should be avoided. 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.

The reasons for disqualification of the Company and Mr Carl Morris can be simply stated. Even after a warning from my office in February 2020, Mr Carl Morris went out of his way not to produce any documentation to the Transport Manager. He did do deliberately to hide the non-compliance. Mr Carl Morris decided that it was more important to keep the vehicles on the road and that safety came second. This wholesale disregard for safety is stupefying, regardless of any other context, and must not be allowed to be repeated. Accordingly, I have disqualified the Company and Mr Carl Morris. I have not disqualified Mr James Morris because he was not able to attend the Public Inquiry due to ill health. On the face of the evidence in front of me today he has been as duped and mislead by Mr Carl Morris along with everyone else. However, I make it clear that I do not expect him to apply for an Operator’s Licence again without first writing to my office to set out what his actual role was in the mess created by Manual Control Limited both in terms of safety but also the finances.

Finally, I asked Carl Morris about the accounting papers that have not yet been sent to the Liquidators (as per the email exchanges on the 29 September 2021). Mr Carl Morris suggests that his mother is in the process of putting that all together with the accountants. I advised Mr Carl Morris that time is of the essence, and he has given me an undertaking that best endeavours will be used to send that paperwork to the liquidators by the end of the week and if it is not sent an explanation provided.

5. Mr Sadler

Mr Sadler is in no doubt of my disquiet and disappointment at his conduct since February 2020. Mr Sadler has admitted that his loyalty to James Morris was misplaced over far too long a time and that he should have notified my office of the challenges and resigned far sooner. I have come very close indeed to finding Mr Sadler’s good repute lost. I have only stepped back because of his otherwise long career and yes there have been issues but not ones that would have led to a loss of good repute. He tells me that the current arrangements are appropriate on his current licences, save that he needs to review the roller brake testing regime on Mr Huntley’s Licence. I am taking him at his word and although his good repute remains by a gossamer thread, it does remain.

Miss Sarah Bell

Traffic Commissioner

Written confirmation: 08 October 2021