Decision

Decision for Orion Travel Coaches Ltd (PC1088617) & former TM: Nitin Radia & Manchester Breakdown Services Ltd (OC1106525) & former TM: John Shepherd

Published 28 December 2022

0.1 Background

Orion Travel Coaches Limited (“Orion”) holds a standard international public service vehicle operator’s licence PC1088617 in the North West of England Traffic Area authorising the use of 18 vehicles with 15 vehicles currently in possession. The licence started on 28 September 2009.

Orion’s directors are Gerard John Queenan and Leigh Mitchell. Its Transport Manager during the period from 2009 to 12 March 2020 was Nitin Radia who was also called to the public inquiry. The current Transport Manager is Stephen John Parry. As the events under consideration occurred prior to his appointment, he was not called in his own right.

Manchester Breakdown Services Limited (“MBS”) holds a standard national goods vehicle operator’s licence OC1106525 in the North West of England Traffic Area authorising the use of 3 vehicles with 1 vehicle currently in possession. The licence started on 22 November 2011. It is noted that MBS operates a fleet of around 50 recovery vehicles, but these are exempt from licensing requirements.

The sole director of MBS is Gerard John Queenan. Its Transport Manager during the period from 29 January 2020 to 30 December 2021 was John Shepherd. Mr Shepherd had previously acted as Transport Manager for MBS in earlier years. The current Transport Manager is Wendy Patricia Kendall. As the events under consideration occurred prior to her appointment, she was not called in her own right.

Both operators were called to a conjoined hearing as they have a common director in Mr Queenan. He established both businesses and now runs with support from General Managers (Mr Mitchell for Orion and Scott Evans for MBS). Orion and MBS also share the same operating centre at 1 Kay Street, Manchester. It was originally intended the hearing would also be conjoined with hearings into two other linked entities that hold community bus permits, but that matter has been severed and will be progressed independently of the consideration of these operator’s licences.

Orion and former TM Radia were called to public inquiry primarily because of DVSA investigations commenced in May 2019. Traffic Examiner Groom found several areas of significant concern and in particular:

• A high number of drivers’ hours infringements and unaccounted mileage.
• Questions about the active involvement of TM Radia at the time of the investigation.
• Whether some of the tachograph charts, workshop and wheel torque records had been tampered with or falsified.

Vehicle Examiner Ainscow’s findings in relation to maintenance were generally positive. The MoT failure rate was above the national average, but Orion had not recorded any prohibitions since 2017. However, the findings of VE Ainscow must be considered in the context of the concern raised by Traffic Examiner Groom about potentially falsified documents.

Two other issues for Orion were identified as requiring scrutiny at public inquiry. First, Leigh Mitchell was appointed as a director in September 2020 according to Companies House records, but this material change was apparently not notified to my office until 27 April 2022.

Three of the drivers interviewed by the DVSA during the investigation also claimed they were engaged by Orion on a self-employed basis. Scrutiny is necessary to consider whether such arrangements comply with the HMRC guidance on driver employment as the expectation of Traffic Commissioners.

Orion and Mr Queenan (as a sole trader) had previously been called to public inquiries many years ago in relation to this and other PSV licences. The last public inquiry was in 2011 when no further action was considered necessary against Orion in relation to regulatory matters and a variation to increase the authorisation was granted.

MBS was also called to public inquiry following a DVSA investigation undertaken by the same examiners. The issues found were narrower than for Orion and I accept that they would have been unlikely to prompt a call to public inquiry in isolation. Some issues were found with the completion of inspection sheets and the quality of driver walk around checks.

The main concern was the question of who was acting as Transport Manager on the licence between 2016 and 2020. The licence record discloses a confused position between 2016 and 2019 were a previous Transport Manager named Glen Sweeney apparently left and was replaced by John Shepherd who made several attempts to remove himself before he was reappointed in January 2020 for a further 2-year period.

There also appeared to be confusion about MBS’ operating centre. The original address was Compound A at New Bank Street Manchester. The 2016 continuation checklist suggested that another site was in use at Kay Street. This was followed in 2019 by an application to add 1 Kay Street as an operating centre which was refused due to a procedural deficiency. It was only in February 2022 that a further application was made to successfully add Kay Street as an operating centre begging the question of how long it was used without authorisation.

MBS had not previously been called to a public inquiry but was issued with a formal warning in 2016 following the issue of prohibitions. Since then, only one roadworthiness prohibition had been issued (in 2022).

0.2 The Call to Public Inquiry

Orion was originally called up to public inquiry by letter dated 7 March 2022. This gave notice that the issues of concern to be considered related to Sections 17(3)(aa), 17(3)(c), 17(3)(e), 17(1)(a) and 14ZA(2) of the Public Passenger Vehicles Act 1981 (“The 1981 Act”).

Former Transport Manager Radia was called up by letter of the same date that cited Schedule 3 of the 1981 Act

MBS was also called up to public inquiry by letter dated 7 March 2022. The call up letter gave notice that the grounds for regulatory action in Sections 26(1)(a) 26(1)(c)(iii), 26(1)(e), 26(1)(f), 26(1)(h) and 27(1)(a) of the Goods Vehicles (Licensing of Operators) Act 1995 (“The 1995 Act”) were to be considered.

Former Transport Manager Shepherd was called up by letter of the same date that cited Schedule 3 of the 1995 Act

The inquiry was originally listed for 11 April 2022 but due to the volume of material to be considered it was decided that date should be utilised for a case management hearing.

The public inquiry was relisted for 26 September 2022 but was unavoidably postponed at short notice as one of the legal representatives had been taken ill. A further case management hearing was held on that date.

I am satisfied the parties have fully complied with all the directions I made at the previous hearings.

0.3 The Public Inquiry

The Public Inquiry was heard at Golborne on Thursday 15 December 2022 and Friday 16 December 2022.

Orion was represented in person by its directors Gerard Queenan and Leigh Mitchell. Mr Queenan was also present in his capacity as director of MBS.

The current Transport Manager, Mr Parry for Orion attended that part of the inquiry that dealt with that undertaking.

The operators and their directors were legally represented by Laura Thomas of Counsel instructed by Beverley Bell Consultants.

Former Transport Managers Radia (for Orion) and Shepherd (for MBS) attended by video link through Microsoft Teams as did their legal representative, Harry Bowyer of Smith Bowyer Clarke solicitors. The former Transport Managers and their representative had consented to participating virtually to manage the number of individuals attending the inquiry room in person. I am satisfied they were able to fully participate in the proceedings.

VE Ainscow and TE Groom appeared in person as witnesses for the DVSA.

1. Orion Travel Coaches Limited and former TM Radia

1.1 Evidence

In advance of the public inquiry Orion submitted satisfactory evidence of financial standing, and this was not considered further at the hearing.

Orion also submitted evidence of its current compliance, and this was examined beforehand by VE Ainscow and TE Groom.

VE Ainscow also confirmed that the maintenance documentation was generally satisfactory although he noted the absence of evidence of brake testing. Both examiners indicated that they felt improvements were continuing but slowly. The MoT initial failure rate has improved from 40% in 2019 to 36% on the latest figures, although still well above the national average. All vehicles presented for test in the last 6 months have passed.

The most serious concern for Orion was that there may have been falsification of records to try to conceal the true reasons for the high rate of unaccounted mileage.

DVSA examiners drew attention to an apparent discrepancy in some of the workshop records that were produced to explain unaccounted mileage on the tachograph charts. The numbering of the documents was not in a chronological order raising the suspicion that they may have been completed at some later date.

Additionally, some of the wheel retorque records produced for the same purpose had been shown to the mechanic during an interview and he denied that he had signed some of the entries. Leigh Mitchell accepted he had completed some of the forms using information provided by the mechanic and had entered the latter’s name. I note the relevant column on the records was headed “name” and did not expressly invite a signature or other similar personal declaration to be added.

My attention was also drawn to two analogue tachograph charts dated 24 February 2019 and attributed to a driver named Brady. The first chart had the mileage figure very obviously amended and other details had been added that the driver in interview claimed was not in his handwriting. The second chart did not record any movement but again handwritten details had been added for which the driver denied responsibility. The continuity of the charts was not clear. They would have been passed to the office by the driver or a colleague and Mr Mitchell may have handled them although he said he definitely did not add any details. It was suggested that charts from that time may have been checked by Mr Radia, but this was also when he appears to have been away from his duties. Mr Radia denied any knowledge of the charts being amended. There was no other evidence as to who made the entries on the chart.

TE Groom in her evidence accepted that there was no suggestion that Mr Queenan had been involved in any falsification.

Former TM Radia confirmed he had ceased to be an internal transport manager on the licence in around 2011 and had revised his working hours. It was accepted that neither Mr Radia nor the operator informed the Office of the Traffic Commissioner of this material change.

Mr Radia also conceded that during the spring of 2019 he was not as involved in the business as he should have been. He had moved to the Stoke area and had some family issues ongoing. He trusted Mr Mitchell to monitor what was happening at Orion and continued to undertake what he described as “ad hoc” checking of records, visiting mainly at weekends.

Mr Radia expressed concern that he was not allowed access to records to assist the DVSA investigation and that Mr Mitchell had taken on that responsibility. He accepted he should have raised his concerns with my office. Mr Radia made the decision to leave Orion in January 2020. He has since been acting as a Transport Manager for a much smaller operator and would wish to continue in that role.

It was apparent from the operator’s evidence, that they had become dissatisfied with Mr Radia’s performance. Mr Queenan decided that Mr Mitchell and Mr Parry should train for the CPC qualification and Mr Parry was subsequently appointed to replace Mr Radia. Mr Queenan agreed with my suggestion that Mr Radia had jumped before he was pushed.

The failure to record Mr Mitchell’s appointment as director was ascribed to an oversight.

Mr Parry gave evidence of current compliance supported by Mr Mitchell and Mr Queenan. Whilst this was mostly reassuring, I did have some concerns about the lack of a detailed plan on how to address the low MoT Pass rate. I accept the operator is now engaging drivers in a manner that complies with HMRC guidance on the use of self-employed staff.

1.2 Findings of fact

During the 3-month period leading up to the start of the DVSA investigation in 2019 there was a high drivers’ hours infringement rate. The amount of unaccounted mileage was unacceptably high. I find these matters indicate that at the time, the operator and Transport Manager Radia were not exercising sufficient control over their drivers’ compliance with tachograph and drivers’ hours requirements.

Applying the balance of probabilities, I cannot say that the workshop records were falsified. Without further investigation, I cannot exclude the possibility there may be legitimate explanations why the numbering was not chronological.

I do not find the wheel torque records had been falsified. I accept the name of the mechanic was added by Mr Mitchell as a factual record of who had undertaken the work. It was not intended to be a facsimile of the mechanic’s signature and was not presented as such.

I am satisfied the two tachograph charts had been altered by someone other than the driver named on them. However, it is impossible from the evidence I heard to reach any determination on who may have been responsible for that action. That also renders it difficult to reach a conclusion as to what that person’s motive may have been. The alteration of the mileage on the chart was obvious and unsophisticated. I am not satisfied that it has been shown the motive for altering the chart was to present a false picture to the DVSA examiners. I have also taken note of the fact that only these two charts drew attention from all the charts examined covering a 3-month period and there was no evidence of any more sustained practice of altering analogue charts.

Whilst I do not make any adverse findings in relation to falsification, the issues that led to the documents attracting suspicion could have been prevented, or at least investigated sooner before the DVSA arrival. The fact the operator was unaware of the issues previously further highlights to the lack of management control at the time.

These issues arose because Mr Radia was not effectively undertaking his Transport Manager duties at the time. I am satisfied that Mr Queenan and Mr Mitchell had started to become concerned about the position, but they failed to act with sufficient expediency to resolve matters.

Accordingly, I find that the operator has not honoured the undertakings it signed up to when it applied for the licence, namely, that it would observe the rules on drivers’ hours and tachographs and keep proper records. The grounds for regulatory action in section 17(3)(aa) of the 1981 Act are therefore satisfied.

There has been some improvement in the MoT failure rate, but it is still very high. This is balanced with the fact that the incidences of prohibitions in the last 5 years is relatively unexceptional. Nevertheless, I find that the persistently high MoT failure rate amounts to a failure to fulfil the undertaking to keep vehicles fit and serviceable and the grounds for regulatory action in section 17(3)(aa) of the 1981 Act are also satisfied on this basis.

I find that during 2019, the relationship between TM Radia and the operator effectively broke down. During the spring of 2019, Mr Radia became more detached from the business and his duties because of his personal circumstances. Mr Mitchell stepped into the breach to an extent despite the fact he was not the named Transport Manager and at that time was unqualified for the role. The lack of effective transport manager was highlighted by the DVSA investigation, and this appears to have intensified the focus of both Mr Radia and the operator. I accept that Mr Radia may well have felt excluded at times but do not consider the operator intended to prevent him from undertaking his proper duties. It more reflected the concern Mr Queenan and the other managers had about Mr Radia’s performance of the role. Mr Radia made a responsible decision to leave the licence, but I find if he had not done so, the operator would have acted to replace him in any event.

The changes in Mr Radia’s working hours and the change in his status from internal to external transport manager were material changes that ought to have been notified to my office. Similarly, the effective decrease in Mr Radia’s contact with the operator in the spring of 2019 should have been flagged up sooner.

These issues, taken with the failure for nearly two years to ensure Mr Mitchell’s appointment as director was recorded on the licence, lead me to find that the operator has failed to notify material changes, thereby satisfying the ground for regulatory action in Section 17(3)(e) of the 1981 Act.

During the hearing, some criticism was made on behalf of the operator for the DVSA approach to the investigation, for example claiming that not all relevant documentation had been made available before Mr Queenan’s interview. The DVSA for its part drew attention to the delays in arranging interviews with Mr Radia and Mr Mitchell that persisted to the extent that a decision was eventually made not to hold such interviews

I listen to the representations made on these points by all parties. During the hearing, I expressed my expectation that all parties cooperate during an investigation and that operators and Transport Managers should make themselves available to the DVSA for interview at an early stage so that matters can be discussed whilst fresh in all minds. It is also important that parties under investigation are given full details of any concerns raised so that can fully address those.

That said, I am mindful that this investigation largely took place against the unprecedented backdrop of the pandemic. The restrictions inevitably hampered the normal flow one would expect such an investigation to take and posed a severe obstacle to usually straightforward tasks such as face to face interviews. I note that Mr Radia and Mr Mitchell were legally represented throughout, and those representatives remained in contact with the DVSA. This is not a situation where there was a failure to respond to the DVSA or actively obstruct the investigation’s progress. I make no criticism of Mr Mitchell or Mr Radia in relation to the fact they were not interviewed. Equally, I do not consider that the manner in which the investigation was conducted by the DVSA has caused unfairness to any of the parties nor has it prevented me from hearing relevant evidence to reach a balanced decision.

1.3 Consideration

Having reached the findings of fact recorded above for Orion, I have considered the balancing exercise and have considered the positive and negative features by reference to the guidance in the Senior Traffic Commissioner’s Statutory Document Number 10.

The positive features that I identify are:

• There do now appear to be appropriate systems and procedures in place to prevent operator licence failings.
• There are good analysis procedures in place to detect falsification, drivers’ hours infringements.
• There was insufficient evidence that the unaccounted mileage was attributable to widespread intentional falsification or that documents were deliberately falsified to obstruct the DVSA.
• There is evidence of driver staff training with appropriate monitoring and disciplinary procedures in place
• Some changes have been made with tangible evidence in support, to ensure compliance
• Operator co-operated with the enforcement investigation subject to the challenges of the pandemic.
• The MoT failure rate has improved.
• The operator did not come to attention in the 8 years between its last public inquiry and the DVSA investigation in May 2019.

These positives must be balanced with the following negative features:

• Failures to notify material changes to the traffic commissioner within 28 days of their occurring.
• Ineffective management control in place to prevent operator licence compliance failings during 2019.
• Ineffective procedures in place to detect falsification, drivers’ hours infringements during 2019.
• Low average first time pass rate at MOT.

A key feature of this case is that the matters being considered are now over 3 years old. That delay is, in part, attributable to the pandemic but whatever the reason, it is not desirable that such a long interval should pass between the commencement of an investigation and the public inquiry. Nevertheless, it affords the opportunity for an operator to demonstrate it has addressed the areas of concern and I am satisfied that has happened here. Had this licence come before me more promptly after May 2019, it is likely I would have considered regulatory action higher up the scale.

I have gone on to consider the Priority Freight question of whether I can trust the operator to be compliant in future? I do answer that question in the affirmative but not entirely without reservation.

I take reassurance from the systems that are evidently in place and the signs of improvement in several aspects of compliance, but I remain concerned about the high MoT failure rate. The data produced in future and the audit to be arranged must show an accelerated rate of improvement in that regard or the operator can expect to be called back to public inquiry.

In closing submissions, Ms Thomas for Orion submitted that the position fell into moderate to low category for action envisaged by Statutory Document 10 and invited me to consider a warning accompanied by the undertakings as listed above.

I find there are sufficient negative features to take this beyond the “low” category and a warning. For several months in 2019, the operator failed to ensure it was effectively managing its drivers’ hours. That must be marked by regulatory action. I take into account the guidance offered in Thomas Muir (Haulage) Limited (1999) SC 86 that such action has a purpose in “deterring the operator or other persons from failing to carry out their responsibilities under the legislation”. For that reason, I consider the starting point must be towards the higher end of the “moderate” category.

I consider that the appropriate and proportionate regulatory action in this case should take the form of a limitation on operations for 7 days whereby the operator is restricted to operating only 12 vehicles (representing a reduction by a third of its current authority). I will set the dates for this action to coincide with the school holidays to limit the disruption that would otherwise be caused to the local authority customer and service users.

2. Former Transport Manager Nitin Radia

I am satisfied that Mr Radia failed to exercise the required continuous and effective management of the licence during the spring of 2019 in the weeks leading up to the DVSA investigation in May 2019. Thereafter I saw little evidence of his active involvement in the licence until his departure in January 2020.However, I acknowledge that his limited involvement during the latter half of 2019 also have reflected the fact that Mr Queenan and other Orion managers had lost confidence in Mr Radia and did not encourage his participation. It was not a situation entirely of Mr Radia’s making.

Mr Bowyer in closing submission properly highlighted that Mr Radia had been Orion’s Transport Manager for 10 years since its start and up until the events of 2019, its compliance had generally been good. I also take note that since leaving Orion, Mr Radia has continued to act as Transport Manager for another smaller PSV operator which has an unblemished record.

Mr Radia accepted in his evidence that he ought to have notified the Office of the Traffic Commissioner sooner about his changed hours and his concerns that he was not being listened to by the operator.

I balance that with the fact that the period when Mr Radia’s performance as Transport Manager was a concern is limited to a few months in 2019. Although he could have acted sooner, he did eventually take the responsible step of resigning in January 2020. His conduct since has been beyond reproach. I also take account of the fact that some of the problems at the end of his time at Orion appear to stem from a mutual loss of trust between the operator and Mr Radia.

After careful consideration, I have concluded that Mr Radia’s good repute is tarnished by these events but not lost. I am also reassured by his willingness to undertake to attend a CPC refresher course. I would add that if in future Mr Radia sought to increase his transport manager responsibilities, I would expect him to provide evidence on how he could be trusted to take that on without the difficulties seen at Orion recurring.

I record a formal warning against Mr Radia.

3. Manchester Breakdown Services Limited

3.1 Evidence

In advance of the public inquiry MBS submitted satisfactory evidence of financial standing, and this was not considered further at the hearing.

MBS also submitted evidence of its current compliance, and this was examined beforehand by VE Ainscow and TE Groom. Some confusion was caused as the operator submitted records for vehicles that are not subject to operator licensing but overall, no issues of significant concern were found in the more recent documents.

The primary concern for MBS was the question mark over its Transport Manager arrangements between 2016 and 2020. There was also a question whether it had used an unauthorised operating centre between 2016 and 2022.

The issue of the Transport Manager arose following the appointment of John Shepherd to the role in October 2016.

Mr Shepherd was appointed to replace the previous Transport Manager, Glen Sweeney. Unfortunately for some reason, although Mr Shepherd was added to the licence record, Mr Sweeney was not removed as he should have been. I accept the operator and Mr Shepherd cannot be held accountable for that initial error. This meant that the licence purported to name two Transport Managers from then on.

A new licence document was sent to the operator in November 2016, and it named both Mr Sweeney and Mr Shepherd. The document should have been checked and the error in Mr Sweeney still being named would have come to light.

In October 2017 a letter was received at the Licensing Office from Mr Shepherd saying he was no longer acting as Transport Manager as his role at MBS had changed. The letter was dated 23 March 2017 although the delay in it arriving appears not to have been questioned at the time. Mr Shepherd was duly removed from the licence as transport manager but unfortunately “last TM” procedures were not triggered as Mr Sweeney remained named on the record (albeit wrongly).

Mr Shepherd confirmed he had sent the letter and believed the contents to be correct at the time. Mr Shepherd in his initial evidence said that he had informed Mr Queenan and another manager (David Sweeney) of his intention to resign, and he was concerned about his workload. However, when questioned by Ms Thomas for the operator, Mr Shepherd conceded that he may not have informed Mr Queenan.

Bizarrely, in February 2019 Mr Shepherd sent an identically worded resignation letter to the Licensing Office. He accepted he had sent this but could not recall why he had done so. I asked him if the letter implied that he had resumed his Transport Manager duties since his previous resignation in 2017. Mr Shepherd could not provide any clear explanation. He suggested that despite his resignation in 2017, he had continued working as Transport Manager out of “instinct” and “habit”.

In January 2020, another licence document was issued naming Glen Sweeney as sole Transport Manager. It seems on this occasion the error was spotted, and Mr Sweeney was removed from the licence record a few days later by a user with Mr Shepherd’s log in details. Mr Shepherd denied he had done this and said others within MBS had his log in details. Mr Queenan denied he had removed Mr Sweeney using Mr Shepherd’s details.

Whatever the truth of who removed Mr Sweeney, an application was then made to appoint Mr Shepherd as internal Transport Manager and he remained on the licence until 30 December 2021.

The only further development was in October 2021 when Mr Shepherd left the employment of MBS to go to work elsewhere. It was agreed between all the parties that he continued to act as Transport Manager for MBS, albeit on an external basis, until removed from the licence. That change in his status however was not notified to my office by either the operator or Mr Shepherd.

Mr Queenan was adamant that Mr Shepherd had continuously served as MBS’ transport manager between 2016 and 2021. He was unaware that Mr Shepherd had informed my office of his resignation. Mr Queenan did concede that Mr Shepherd had on occasion expressed concerns about matters such as a lack of respect from drivers and his workload and had threatened to resign. Mr Queenan insisted he was not aware that Mr Shepherd had actually resigned. Mr Queenan admitted he had not noticed that Mr Sweeney was still named as Transport Manager on the online licensing record of in the licence documents sent to the operator during that period.

Mr Shepherd is now back working for MBS in another capacity. He does not have any immediate intention to seek appointment as a transport manager but wishes to retain his entitlement to do so.

In relation to the operating centre, Mr Queenan confirmed that MBS had started to use the premises at Kay Street in addition to its authorised operation centre at New Bank Street in around 2016. Kay Street was already the operating centre for Orion.

The continuation checklist returned by Mr Queenan in October 2019 recorded that 3 Kay Street was an additional operating centre but there is no evidence that any application was made to formally apply for it to be added to the licence.

In September 2019 following the DVSA visit when the issue was raised, MBS submitted a formal application to add 1 Kay Street as an operating centre. The application was refused as the publication of the advertisement did not comply with the statutory requirements. This was communicated by letter to the operator in October 2019, but Mr Queenan said he was unaware that the application had been refused.

A further application to add 1 Kay Street as an operating centre was not made until February 2022. This was in order and was granted in advance of the public inquiry.

Mr Queenan explained that MBS currently operates one car transporter under the licence for work ancillary to the recovery operation. A second brand new vehicle has been acquired and will be put into service once the outcome of the inquiry is known.

Mr Queenan explained that Orion and MBS are his main business, but he has several other companies as well. He relies on his General Managers to run daily operations, but he is also present daily. Mr Queenan tellingly described his management style as “laid back”.

3.2 Findings of fact

I found the evidence in relation to Mr Shepherd’s position very confusing and his own evidence was often contradictory.

Having considered the totality of the evidence, my conclusion is that the most likely explanation is that Mr Shepherd did continue to act as Transport Manager for MBS throughout the period between his first appointment in 2016 and his ultimate removal in 2020.

I find that the resignation letter sent in 2017 was prompted by his dissatisfaction with the role but that he did not actually cease to perform the Transport Manager’s duties at the time. This finding is supported by the fact that Mr Shepherd again purported to resign in February 2019, indicating that he considered was still in the role. Further when the DVSA attended in May 2019, Mr Shepherd presented himself to the examiners as the Transport Manager.

Clearly Mr Shepherd should not have sent those letters if he intended continuing in the role. He should also have unequivocally informed the operator that he had sent those letters. I find that while he may have made some comment about resigning, there is insufficient evidence that he formally informed Mr Queenan as MBS’ director. Mr Shepherd also failed to note that Mr Sweeney remained on the licence for 4 years after he should have been removed.

It is also my finding that Mr Shepherd misled my office by sending the resignation letters in 2017 and 2019. Even if they reflected his intentions at the point of sending, it seems that on both occasions he soon reconsidered but he failed to retract the resignation letters.

These findings in relation to Mr Shepherd do not exculpate Mr Queenan. As director he should have checked the licence issued in 2016 carefully. Had Mr Queenan done so, he would have noted that Mr Sweeney was wrongly continuing to be named as a Transport Manager. Similarly, if Mr Queenan had routinely checked the online licensing system, he would have seen that Mr Shepherd had ceased to be recorded as Transport Manager from 2017.

Those failings to pay attention to a fundamental detail of the licence also apply to Mr Queenan’s approach to the operating centre issue.

I find that MBS used 1 Kay Street as an operating centre for around 6 years without authorisation. I do not find there was any deliberate concealment of that use, but the operator failed to take the steps required by statute for that site to be authorised. Given the gravity of the matter, I would have expected Mr Queenan to have been especially vigilant after the DVSA visit in 2019 to ensure the subsequent application had been granted and to ensure that the use of the operating centre had been authorised. It is unacceptable that it took a further 3 years before the situation was regularised.

These findings in turn satisfy mean the following grounds for regulatory action in the 1995 Act are satisfied:

• MBS has operated from an unauthorised operating centre - section 26(1)(a); and
• Since the licence was issued, there has been a material change in the circumstances of MBS namely in relation to its transport manager arrangements and operating centre - section 26(1)(e).

3.3 Consideration

Having reached the findings of fact recorded above for MBS, I have also considered the balancing exercise and have considered the positive and negative features by reference to the guidance in Statutory Document Number 10.

Several of the positive features listed in Statutory Document 10 can be attributed to MBS as it is now. I am satisfied that it has reasonably effective systems and management controls in place. Many of those positive features can also be said to have been present in 2019 in terms of vehicle roadworthiness and drivers’ hours compliance. I have also taken account of the time that has passed since these matters first arose.

However, I balance this with the significant negative feature that there was ineffective management control in place previously to prevent operator licence compliance failings. Specifically, the operator failed to identify the problems with the Transport Manager and to prevent its use of an unauthorised operating centre for a period of several years.

The latter is a particularly serious issue but is mitigated by the fact there was no attempt made to actively conceal the use of the operating centre. The site was already in use by the sister company and there were no concerns about its capacity or suitability. When the application was eventually made, there were no objections or representations received. None of these matters excuse the operator’s actions. There is a statutory process that should have been followed and it the principles of fair competition direct that every operator should follow that process.

As with Orion, I give MBS credit for its compliance since these matters first arose. This is qualified however by the fact it took so long for the operating centre position to be regularised even after the DVSA highlighted the issue in May 2019.

Applying the Priority Freight question to MBS, I am satisfied that I can trust the operator to be compliant in future provided that Mr Queenan as its director learns the lessons of the events that led to this public inquiry. He may wish to reflect on whether his previous “laid back” approach is the most appropriate to delivering compliant management of an operator’s licence.

With MBS also, I take reassurance from the willingness to offer the undertakings and statement of intent recorded above.

Balancing all these factors, I conclude that action towards the lower end of the “moderate” category envisaged by Statutory Document 10 is appropriate and justified for MBS. My comments about deterrence for Orion are relevant also to MBS. I determine that action should take the form of a curtailment of its margin for 28 days.

4. Former Transport Manager John Shepherd

Mr Bowyer in closing submissions for Mr Shepherd invited me to consider a warning. He made the point that although not officially named on the licence, Mr Shepherd continued to act as Transport Manager for MBS during the period in question. The fact that he did so effectively is demonstrated by the mostly satisfactory findings of both the Traffic and Vehicle Examiners in their investigation of MBS in 2019. Mr Shepherd did not act with any malice or intent to gain.

I accept that those are valid positive features to put forward. I also accept that some of the initial confusion stemmed from the failure of my office to remove Glen Sweeney from the licence in 2016. However, responsibility for the confusion about the Transport Manager position thereafter must rest primarily with Mr Shepherd. Whilst I ascribe some responsibility to the operator for failing to notice the issues, the position was caused by Mr Shepherd writing to my office to notify his resignation in 2017 and then again in 2019. Either he presented incorrect information that he had resigned on those dates, or he reconsidered shortly afterwards and resumed his duties. Either way he should have ensured the position as described in his letters of 2017 and 2019 was corrected.

Whatever the reasons of Mr Shepherd in sending the letters of resignation to my office, their effect was misleading. They led to the impression that Mr Shepherd was no longer acting as Transport Manager for the MBS when his evidence at the public inquiry was that he was continuing in that role. This is compounded by Mr Shepherd’s failure to identify that Glen Sweeney remained wrongly named on the licence as Transport Manager as well.

Mr Shepherd was unable to provide me with a cogent explanation why he sent the letters of resignation and continued to act as Transport Manager thereafter.

I have considered the Upper Tribunal’s guidance in Andrew Harris T/a Harris of Leicester 2014/050 where it was said, “Given the importance attached to operators complying with the regulatory regime and given that transport managers must: “effectively and continuously manage the transport activities of an undertaking holding an operator’s licence, it seems to us that whether or not an individual has the character, personality, ability and leadership qualities to ensure compliant operation as an operator or to effectively and continuously manage the transport activities as a transport manager is a factor which can, properly, be taken into account when assessing good repute.”

Applying that guidance to the actions of Mr Shepherd in this case, I conclude that a finding a Transport Manager has misled the Office of the Traffic Commissioner to be inconsistent with the standards expected. Accordingly, I find Mr Shepherd’s good repute is lost.

The consequence of such a finding is that disqualification is mandatory, but I have considered the length of that order.

The finding that Mr Shepherd misled my office is a significant negative feature. However, I balance this with the mitigation that I cannot see any gain or advantage that flowed to Mr Shepherd (or the operator) by him effectively denying that he remained the Transport Manager. It is also a significant positive feature that he appears to have otherwise competently and compliantly discharged his duties as Transport Manager. Finally, it is also important to give weight to the lack of any previous regulatory action against Mr Shepherd.

Having balanced these factors, I consider the proportionate action in Mr Shepherd’s case is to set the disqualification at the minimum period of 12 months. It was indicated at the hearing that if Mr Shepherd was to seek appointment as a Transport Manager in future, he would need to have attended a CPC refresher course. If that rehabilitative step was completed, then I would be prepared to consider a future application by Mr Shepherd once the period of disqualification has ended.

Gerallt Evans

Traffic Commissioner for the North West of England

20 December 2022