Decision

Decision for Mills Milk (Scotland) Limited (OM2037090)

Published 5 July 2023

0.1 In the Scottish Traffic Area

1. Written Decision of the Traffic Commissioner

1.1 Mills Milk (Scotland) Limited (OM2037090)

2. Background

Mills Milk (Scotland) Limited (OM2037090) (hereinafter referred to as ‘the operator’) was incorporated on 22 March 2016. The operator’s application for restricted licence for two vehicles was considered at a public inquiry on 22 February 2021 following notification being received that one of the two directors, Mr Adam Mills, had a long and serious history of road traffic offending. It was also noted that the operator’s previous applications (2016 and 2017) for an operator’s licence had been refused on account of failure to declare convictions and failure to attend a preliminary hearing which had been fixed to consider the application.

Following the inquiry, having received assurances from Mr Alistair Mills that his failures arose as a result of oversight rather than wilful non-compliance, I decided to grant the application. However, I directed that my decision should not take effect until 29 March 2021 on an undertaking that both directors would have had completed operator licence awareness training by that date.

The operator’s directors also agreed to an undertaking to provide an audit of their systems for operating HGVs and levels of compliance undertaken by a trade body or other suitable organisation by 29 October 2021.

On or around 25 March 2021 an email was received from Mr Adam Mills advising that Mr Alistair Mills had not yet been able to undertake operator licence awareness training. Mr Mills asked if that would have to be undertaken before the licence was issued. My office confirmed that it would, given the terms upon which the application had been allowed. A certificate showing that Alistair Mills had completed an OLAT course was eventually received on 15 April 2021. The licence was, thereafter, granted as applied for.

The operator failed to submit an audit by 29 October 2021. On 3 November 2021, a reminder was sent to the operator. In response, the operator advised that they had not used the operator’s licence yet having only just specified a vehicle to service a new contract. A warning was issued for the failure to comply with the undertaking and a further 3 months (until 29 January 2022) allowed for submission of an audit.

On 25 January 2022 an audit report completed by Logistics UK was received in my office. The auditor advised that many significant and immediate improvements were required across the operator’s systems, including those for vehicle maintenance, drivers’ hours and driver management.

The operator was asked to provide information as to how they intended to address all of the shortcomings by 21 February 2022. An email was received on that date providing assurances that the shortcomings would be addressed. An undertaking for a further audit to be carried out, and the report supplied to my office by 15 September 2022, was accepted.

A further audit was received in September 2022. The findings remained unsatisfactory with a number of safety critical systems still not having been implemented.

An email was received along with the audit from a Mr James Halliday, a qualified transport manager and CPC holder. Mr Halliday advised that he had been appointed as transport manager for the operator. He advised that had he had begun putting proper systems in place and detailed a number of improvements which he said had already been introduced.

On the basis that Mr Halliday had been appointed and immediate action now being taken to address what were serious shortcomings in systems, a final chance to improve was allowed to the operator. An undertaking for a further follow up audit was offered, with the report to be submitted to my office by 15 January 2023.

In the meantime, unbeknown to my office, DVSA carried out a maintenance investigation in relation to the operator’s vehicles. Intelligence had been received concerning the condition and maintenance of the operator’s LGV fleet.

Vehicle Examiner (VE) Brown attended the operating centre on 3 August 2022 and inspected a number of the operator’s light goods vehicles. Numerous prohibitions were issued. The examiner concluded that many of the vehicles in the light goods fleet were in a dangerous condition indicating serious neglect on the part of the operator.

Shortly after VE Brown’s visit, one of the operator’s light goods vehicles was involved in a fatal collision with a cyclist. The vehicle was thereafter examined by DVSA and found to be unroadworthy with several pre-existing defects found.

The unsatisfactory outcome of the DVSA investigation, and the fact that there had been a fatal collision involving one of the operator’s vehicles, were brought to my attention. I was advised that the operator had also lodged an application to increase their vehicle authority. I directed that the operator be called to an inquiry.

Mr Halliday, the individual employed as transport manager by the operator, emailed my office on 3 April 2023 advising that he was resigning from his position with effect from 7 April 2023. He alleged that he was doing so on account of the operator failing to comply with the procedures that he had put in place for managing the operator’s vehicles.

Mr Halliday alleged that his contract had been reduced to a three day week and he could not carry out his duties properly in that time. He also alleged that the operator was using vehicles for hire and reward, outwith the terms of their restricted operator licence.

I apologise for the delay in issuing this decision which has arisen as a result of the current volume of work in the traffic area.

3. The Public Inquiry

The public inquiry called before me on 19 January 2023. Mr Alistair Mills attended. He was represented, as he was at the first inquiry, by Mr Balkitis, solicitor. VE Brown was also in attendance.

I was advised that the person employed by the operator as transport manager, Mr Halliday, was to attend as a witness. However, I was notified the day before the inquiry that he would not be attending.

A variety of documentation was called for in the call up letter. Some of that was lodged timeously, but the operator had to be asked to lodge a number of missing items in advance of the inquiry. The most recent Logistics UK audit which the operator had undertaken to provide was also lodged.

The missing documentation was eventually provided and the relevant papers passed to VE Brown in order that he could provide a view on the operator’s systems as at the date of inquiry. VE Brown produced a short addendum and analysis of his findings before the inquiry.

4. Evidence

Mr Balkitis summarised the operator’s position at the outset of the inquiry. He advised that the application to increase was still insisted upon.

VE Brown explained that DVSA had received intelligence alleging that the operator’s vehicles were in a poor condition and not being maintained properly. As a result, he had carried out a maintenance investigation the outcome of which was unsatisfactory. He advised that the operator had been very co-operative throughout his investigation.

He explained that many vehicles in the operator’s light goods fleet were found to be unroadworthy. Several prohibitions had been issued. VE Brown considered that the vehicles had been neglected for a long period of time.

VE Brown explained that he had found serious defects on items such as brakes and tyres. One vehicle, for example, was found to have no working handbrake. The vehicle which had been involved in the fatal collision had been found to have numerous pre-existing defects.

As regards the HGV fleet, the vehicles appeared to be being maintained in a satisfactory condition. There were, however, a number of deficiencies in the operator’s systems for monitoring compliance. For example, safety inspections were being carried out late and driver reportable defects were found at inspection.

VE Brown was advised that Mr Halliday was taking over responsibility for the fleet as transport manager. He explained, given his concerns about the operator’s poor compliance, that he was reassured to hear that a qualified transport manager was to be engaged. He felt that it was fair to allow Mr Halliday time to implement proper systems. He did, however, feel that the responses received in response to the investigation thereafter from Mr Halliday were very vague.

VE Brown referred to the documentation submitted by the operator. He had also seen the most recent Logistics UK audit which had been submitted in advance of the inquiry. He advised that the documents disclosed that some of the HGV inspections were still not being carried out on time, despite this having been raised at the time of his investigation.

A number of the inspections were not fully compliant and driver reportable defects were still being identified at inspection. Wheel torque information following repair was also missing. One of the PMI sheets had been postdated, but VE Brown considered that may have been as a result of poor administration as opposed to a deliberate attempt to mislead.

Mr Mills advised that he supplied milk to many premises, including shops and care homes. They also had a large doorstep delivery business. The HGVs were used principally for transport of empty glass bottles. The business was busier than ever.

Mr Mills was asked why he had made an application to increase the authorisation on his licence. He began by asking his solicitor whether he should give a truthful answer. He then explained that his transport manager, Mr Halliday, had told him to apply for six vehicles and he might get four. He only needed one extra vehicle, in fact, to ensure he had a margin if one vehicle was off road.

Mr Mills told me that he trusted Mr Halliday completely. He paid him [REDACTED] and so had made a significant investment in seeking to ensure the business was compliant. He spoke with him every day. Mr Halliday had given him assurances about compliance and he was sure that he was ticking every box. He had files for everything, including all the vans and he had a CPC qualification. He had paid for extra courses for him as well.

Mr Mills told me he was as shocked as everyone else when it became apparent things were not as they should be after the third audit. He had found a consultant who could help now and had signed a letter of intent to engage him. He thought that by employing a transport manager he had gone above and beyond what was required for a restricted licence. He accepted, however, that the responsibility for compliance, regardless of who he employed, rested with him.

Mr Mills advised later in his evidence that his transport manager was, in fact, still employed by him as transport manager. He told me that he was waiting to see what the outcome of the inquiry was before he made a decision on what to do with him. He then changed his evidence and said that he was going to sack him anyway. When asked why he had not asked his transport manager to attend the inquiry and explain the reasons for the failures, he told me that he had been advised not to bring him.

Mr Mills advised that despite the adverse findings in the first two audit reports, VE Brown’s visit was his ‘wake up call’ in relation to his need to do something about the management of his vehicle fleet. He hadn’t been doing nothing up until that point though. After the second audit report he had spoken to another TM about getting tachograph downloading done. However, no meaningful analysis of that was undertaken.

He hadn’t acted sooner because he had been too focused on other aspects of the business. It had grown quickly and he was too busy to give things proper attention. Before, the van fleet went for MOTs or into the garage when things went wrong, but there was now a proper fleet maintenance structure in place with files for every van and lorry.

Mr Mills accepted that it was his fault that things had not been done properly. He also acknowledged, given this operator’s track record in operator licensing, that I may find it difficult to trust him to operate compliantly in the future. He promised if he were allowed to keep his licence, that he would comply.

Mr Mills told me that if his licence were to be revoked it would have a massive impact on the business. The glass bottle business would shut down and most of the wholesale business would have to stop. He would be able to service some contracts, but not all, and there would be a number of job losses. Ultimately, it wouldn’t shut the business down completely but it would have a significantly detrimental effect. The revenue generated from the HGV fleet was around £6k per week. Disqualification would be equally damaging.

As for curtailment, it would also have a drastic effect. Using smaller vehicles for the bigger contracts was not practical. If his licence were suspended, it would also mean the end of his contracts.

In submission, Mr Balkitis asked me to find that there was no deliberate non-compliance on the part of the operator. He had been too busy and, regrettably, compliance had not been at the forefront of his mind with a quickly growing and successful business.

When he realised things were not as they should be, Mr Mills had invested in employing a transport manager. He had placed his full trust in him and been badly let down.

There was evidence before me to allow me to find that this operator would be compliant in the future. The dismissal of Mr Halliday as described by the operator and appointment of a new internal transport manager, alongside a consultant, was proposed. That was tangible evidence of the intention to comply here forward.

5. Consideration of the evidence and balancing

Mr Alistair Mills is the joint director of the operator and is, with his son Adam Mills, in control of it. His evidence was that he was responsible for the operator’s transport operation. His actions in relation to the management of that can, therefore, be equated with that of the operator.

This operator had a poor record in operator licensing before they began to operate. There have been several failures to disclose the convictions of a director, a failure to attend a hearing and a previous application refused for those reasons. The application for the current licence was considered at public inquiry and granted with the strongest of warnings as to future compliance. A recent warning was issued for failure to comply with an undertaking to provide an audit.

Three detailed audits, undertaken by an auditor from a recognised specialist industry body, have been carried out during the short currency of the licence. All found significant and repeated failings in the operator’s systems for ensuring compliance in vehicle maintenance and the management of drivers’ hours. Mr Mills did not dispute those findings.

The third audit, which was presented in advance of the public inquiry, was still amongst the most damning I have ever seen. For that to be the case after two previous audits and rafts of recommendations for improvement having been made, quite simply, beggars belief.

Prohibitions have been issued to light goods vehicles of which the operator is the owner. The audits, and VE Brown’s investigation, demonstrate that there has also been a failure to comply with statements made when the licence was applied for and the undertakings on the operator’s licence.

Proper records have not been kept and the HGVs have not been maintained according to the promised schedule. Driver defect reporting for those vehicles has also been found, up to and including the date of the public inquiry, to be ineffective. Adverse findings in terms of section 26(1)(c)(iii), 26(1)(e) and 26(1)(f) of the 1995 Act are, therefore, made out.

VE Brown’s investigation was focused primarily on the operator’s light goods fleet. He found several of those vehicles to be in a seriously unroadworthy condition.Defects included bald tyres and braking defects which posed a material risk to road safety.

Anyone operating a vehicle on the public road has a responsibility to ensure it is roadworthy. The fact that Mr Mills, an operator of heavy goods vehicles, has allowed commercial vehicles in such a poor condition to be used on the public road is clearly a matter which affects his fitness to hold an operator’s licence.

Moreover, I found Mr Mills to be a wholly unreliable witness who appeared unable to grasp the seriousness of his failings as an operator. I also doubted the truthfulness of much of his evidence. At one point in the inquiry, before answering a question, he asked his lawyer whether he should tell me the truth. That demonstrated a willingness on his part to avoid telling the truth if it were not in his interests to do so.

In addition, leaving aside the repeated chances to improve offered by the audits, Mr Mills’ assured me that VE Brown’s visit in August 2022 was his ‘wake up call’. It was then he realised that he needed help and hired Mr Halliday to manage the vehicle fleet. Yet just under one month later, following a fatal collision with a cyclist, one of his vehicles was again found to be in a seriously unroadworthy condition.

It is beyond the limits of my jurisdiction to make findings of fault in relation to the cause of that accident. It is a fact, nevertheless, that another unroadworthy vehicle was used by this operator on the public road weeks after Mr Mills had his purported ‘wake up call’. That evidence not only demonstrates willful neglect on his part but is further proof that what Mr Mills says simply cannot be trusted. Had there been a real ‘wake up call’ he would have immediately ensured every one of his vehicles was safe and roadworthy before letting them out on the road again.

Moreover, much of mitigation offered by Mr Mills centres on his being let down by his transport manager. He was shocked at the state of things, having placed all of his trust in him to rectify matters. However, Mr Mills eventually told me that Mr Halliday was still in his employ. He then advised that he was ‘waiting to see the outcome of the inquiry’ before deciding what to do. Thereafter, he vacillated advising that his intention was to sack Mr Halliday.

Mr Mills actions in continuing to employ Mr Halliday were wholly inconsistent with his claims that he had completely lost trust in in him after receipt of the third audit. Moreover, Mr Halliday’s email of 4 April 2023, advising of his resignation with effect from 7 April, indicates that Mr Mills assertions at inquiry that he intended to sack Mr Halliday were, again, simply untrue.

It is evident that Mr Mills is a man who will say or do anything he thinks will further his own position. Operator licensing compliance is not, and has never been, his priority. His commercial interests have taken precedence and he has been profiting from the running of unroadworthy vans and HGVs without proper systems to ensure their roadworthiness and legal operation. As a result, road safety and fair competition have been severely imperiled.

Moreover, the operator also has a poor compliance history, with failures to attend a hearing, failure to disclose convictions, refused application and a previous warning. Mr Mills’ insistence on an application to increase authority given the evidence before me at inquiry shows a complete lack of self-awareness and a failure to appreciate the high standards required of those who operate heavy goods vehicles.

I find that Mr Mills’ behaviour demonstrates a flagrant disregard for the operator licensing regime. That disregard, and the unreliable nature of his evidence generally, leads me to conclude that I am unable to trust him, or this operator, in the future. In 2006/277 Michael James Fenlon t/a County Skips the Tribunal said:

‘It has been said on many occasions that trust is one of the foundation stones of operator licensing. Traffic Commissioners must be able to trust operators to comply with all the relevant laws, rules and regulations because it would be a physical and financial impossibility to police every aspect of the licensing system all day and every day. In addition, operators must be able to trust other operators to observe the relevant laws, rules and regulations. If trust between operators breaks down and some operators believe that others are obtaining an unfair commercial advantage by ignoring laws, rules or regulations then standards will inevitably slip and the public will suffer.’

Delay in taking much needed action characterises this case. On each occasion failings have been identified promises of improvement offered by Mr Mills have not been adhered to. Serious failings were still evident as at the date of the public inquiry. Mr Mills was still employing the individual he claimed was responsible for the continuing failings while ‘waiting to see’ what happened to his licence. Such a cavalier attitude demonstrates that Mr Mills is likely to continue place self-interest above compliance every time.

In NT/2013/82 Arnold Transport & Sons Ltd v DOENI the Transport Tribunal said:

“is also important for operators to understand that…: “actions speak louder than words”, (see paragraph 2(xxix) above). We agree that this is a helpful and appropriate approach. The attitude of an operator when something goes wrong can be very instructive. Some recognise the problem at once and take immediate and effective steps to put matters right. Others only recognise the problem when it is set out in a call-up letter and begin to put matters right in the period before the Public Inquiry takes place. A third group leave it even later and come to the Public Inquiry with promises of action in the future. A fourth group bury their heads in the sand and wait to be told what to do during the Public Inquiry. It will be for the Head of the TRU to assess the position on the facts of each individual case. However it seems clear that prompt and effective action is likely to be given greater weight than untested promises to put matters right in the future”.

Mr Mills has demonstrated, repeatedly, that he cannot be trusted to operate compliantly. The past indicates that I can give no weight to Mr Mills’ promises at inquiry to improve.

I was asked by Mr Balktis to accept that there had not been any deliberate non-compliance on Mr Mills’ part. I cannot accept that submission, for failure to take effective action to remedy shortcomings over such a protracted period is akin, in my view, to deliberate non-compliance. There are, however, some positives to take into account in this case.

I believe that Mr Mills believed he was doing the right thing to improve his compliance when he hired Mr Halliday. It was too little too late, but I accept he was trying to improve his operation. I also accept that he invested financially in so doing. By the time the inquiry was called Mr Mills had engaged the services of a consultant to assist him, and VE Brown advised that Mr Mills had been co-operative throughout his investigation.

Mr Mills also accepted at inquiry that he had ‘failed miserably’ and, given his history, that trust in him as an operator may be hard to re-establish. VE Brown’s inspection also showed that the HGVs operated by the operator were at least receiving some routine maintenance, unlike the light goods fleet. However, when weighed against the significant negatives I have identified, I am able to attribute limited weight to those issues.

This case involves a restricted licence where the continuing requirement on behalf of the operator is ‘not to be unfit’. However, having regard to the decision of the Transport Tribunal in 2013/07 Redsky Wholesalers Limited I considered the question posed in 2009/225 Priority Freight to be relevant in assessing fitness. I asked myself therefore, how likely is it that this operator will, in future, operate in compliance with the operator licensing regime?

My findings in this case lead me to conclude there is little chance that the operator would comply in the future, should the licence survive.

Mr Mills advised me of the significant consequences any regulatory action would have for his business. He would lose the wholesale contracts and the glass bottle business would cease. Jobs would be lost and the Inverness depot would close. He did however, advise that the whole business would not necessarily fail if the operator’s licence was lost. The question posed in T/2002/217 Bryan Haulage (No.2) may not, therefore, be relevant: “Is the conduct of this operator such that it ought to be put out of the business?” However, for the avoidance of doubt, I would answer it in the affirmative in any event.

I had regard to the Senior Traffic Commissioner’s Statutory Document No. 10: Principles of Decision Making, in particular, Annex 4. This case was one where the operator has obtained a commercial advantage over other operators by failing to maintain their light goods vehicles. It has also failed to implement proper systems for the management of drivers, driver’s hours and vehicle maintenance for its HGV fleet. Those failures had materially impacted road safety and given the operator, at least until the employment of Mr Halliday, a commercial advantage over other operators. Given the length of time those failings existed, I find they were deliberate, or at the very least, reckless.

The starting point for regulatory action was, therefore, severe. Even weighing in balance in the positives I have found I this case, revocation of this operator’s licence is a proportionate regulatory response. I direct therefore, that the revocation will take effect from 23:59 on 18 June 2023. That will allow for an orderly winding down of the HGV side of the business. The application to increase authority before me will simply fall then on the basis that the licence which underpins it has been revoked.

In considering whether disqualification should follow revocation, I again had regard to Senior Traffic Commissioner’s Statutory Document No. 10: Principles of Decision Making. I reminded myself of the authority in T/2010/29 David Finch Haulage. In that case, the Transport Tribunal said:

“The imposition of a period of disqualification following revocation is not a step to be taken routinely, but nor is it a step to be shirked if the circumstances render disqualification necessary in pursuit of the objectives of the operator licensing system. Although no additional feature is required over and above the grounds leading up to revocation, an operator is entitled to know why the circumstances of the case are such as to make a period of disqualification necessary…”

The Senior Traffic Commissioner’s guidance states that serious cases may merit disqualification of between five and ten years. For a first public inquiry, the starting point suggested is between one and three years. This operator has an adverse history in operator licensing and has attended two public inquiries, albeit this is their first regulatory inquiry.

This is undoubtedly a serious case involving breaches of trust which go to the heart of the licencing regime. The evidence demonstrates that much of what Mr Mills said was simply untrue. He even sought advice from his lawyer on whether to tell me the truth during the inquiry. Such a lack of rectitude casts doubt on whether he, or this operator, can ever be trusted to operate again.

Road safety has been compromised and the operator has gained a commercial advantage over other operators by virtue of its actions. Despite a strong and express warning at the grant of the licence to comply it has failed to do so. Repeated advice and numerous chances have been offered, yet no material improvement has resulted. Such brazen failures to address shortcomings indicate that this operator should be barred from this industry for a significant period.

I considered whether an indefinite period of disqualification was appropriate in this case. However, on balance I have decided that it is proportionate to disqualify both the operator company, and its directors, Mr Alistair Mills and Mr Adam Mills, from holding an operator licence for a period of ten years. Such a period reflects the severity of treatment which is saved for those who are willing to deliberately deceive in this industry, but also reflects the positives that i did find.

For the same reasons, I consider that S.28(4) should apply in this case and I direct accordingly.

Claire M Gilmore

Traffic Commissioner for Scotland

5 May 2023