Decision

Decision for Peyton Travel Ltd (PG2003038) & Transport Manager, Peyton Spallek

Published 31 December 2024

0.1 In the Welsh Traffic Area

1. Written Decision of the Traffic Commissioner

2. Public Inquiry held on 10 September 2024 and 12 November 2024 at Pontypridd

2.1 Operator: Peyton Travel Ltd (PG2003038) & Transport Manager, Peyton Spallek

3. Background

Peyton Travel Ltd holds a Standard National PSV Operator’s Licence authorising 26 vehicles, granted on 24 April 2017. There are two company directors, Paul Brain and Elaine Spallek. Paul Brain was the transport manager on the licence until he lost his repute and was disqualified from acting as a transport manager indefinitely by Deputy Traffic Commissioner Nick Jones at a Public Inquiry on 28 September 2020.  At that Inquiry, the operator agreed to the following licence undertaking

“the operator will recruit and appoint a suitably experienced and qualified transport manager who will be employed on a full-time basis and paid at a commercial rate and in any event no less than £35k to £40k per annum.”  

In March 2023, the directors’ daughter, Peyton Spallek, was nominated and accepted as an additional transport manager on the licence, alongside Michelle Wood. However, Michelle Wood was subsequently removed from the licence.

On 9 July 2023, the Driver and Vehicle Standards Agency (“DVSA”) encountered one of the operator’s vehicles, driven by Stewart Smith.  An “S” marked prohibition was issued to the vehicle for a leaking exhaust system and a tyre tread worn beyond the legal limit. Mr Smith admitted that he had not conducted a walkaround check prior to using the vehicle and subsequent checks by DVSA showed that Mr Smith had been and was still disqualified from driving under the “totting up” procedure between 14 June and 14 December 2023.  He was subsequently convicted and sentenced for driving whilst disqualified and for driving with a defective tyre and was disqualified by the court for a period of 14 months with an 8-week suspended prison sentence also imposed, suspended for 12 months.  That encounter triggered a DVSA maintenance investigation and Vehicle Examiner (“VE”) Geraint Dean made an unannounced investigation visit to the operator’s premises on 17 January 2024.  His maintenance investigation visit report dated 3 June 2024 highlighted areas of concern, including two “S” marked, and other immediate prohibitions issued at his fleet check.  The report also included a number of areas marked as either “unsatisfactory” or “report to OTC” and the VE found that the transport manager had ineffective control of the operation. There was also a further “S” marked prohibition notice issued to one of the operator’s vehicles on 11 March 2024 for a chafed brake hose (albeit that was a smaller vehicle, licensed as a Private Hire Vehicle, not an authorised PSV under the licence). The operator was called to a public inquiry at Pontypridd to consider these issues and Peyton Spallek was also called to the inquiry to consider whether she continued to meet the requirements to be of good repute and professionally competent.

4. Hearing

The Public Inquiry was listed for 10 September 2024 at 10.00am at the Office of the Traffic Commissioner for Wales in Pontypridd and went ahead on that date.  Paul Brain, director, appeared on behalf of the company and Peyton Spallek appeared in her capacity as transport manager. Both parties were represented by Mark Davies of Counsel, instructed by Beverley Bell Consulting Ltd.  VE Geraint Dean (now Vehicle Enforcement Manager) attended from the DVSA, remotely via Microsoft Teams.   

There was insufficient time to conclude the hearing on 10 September and so the inquiry was part heard and adjourned. The evidence from VE Dean and Peyton Spallek was concluded on that date, and I indicated that neither would be required to attend and give evidence on the next occasion.  Ms Spallek was pregnant, with her baby due in January 2025, and I indicated that she should attend the next hearing date if she could, but that no adverse finding would be made should she not attend. 

The hearing resumed at 2.00pm on 12 November 2024 at the Office of the Traffic Commissioner for Wales in Pontypridd.  Paul Brain attended the reconvened hearing on behalf of the operator, again represented by Mark Davies of Counsel. Peyton Spallek was in hospital due to complications with her pregnancy, and so could not attend.

5. Evidence

In addition to the papers in the public inquiry bundle and VE Dean’s public inquiry supplementary statement dated 5 September 2024 (also served on the parties to the hearing) I was also provided, in advance of each hearing, with additional evidence from the operator and transport manager.  For the inquiry hearing on 10 September 2024 this consisted of financial evidence and witness statements from Paul Brain, Peyton Spallek, Stephen Griffiths (workshop manager) and Simon Bartrum (workshop supervisor) and associated documentation. For the inquiry hearing on 12 November 2024, this consisted of further financial documents, a further witness statement from Peyton Spallek and a number of additional documents as listed in the covering letter dated 29th October 2024 from Beverley Bell Consulting Ltd.

At the hearing on 10 September, VE Dean confirmed that, although some areas in his report were marked as “unsatisfactory”, having received further information and evidence from the operator, he had re-assessed his initial markings in respect of some of those and he now considered the correct marking to be “satisfactory” in some cases.  For his supplementary statement, unfortunately the operator had been asked by OTC staff to send a full 6 months’ of maintenance records to VE Dean in advance of the inquiry hearing, and one of the vehicles was not a PSV authorised by the licence (but a smaller Private Hire Vehicle).  Some of VE Dean’s adverse comments in his supplementary statement therefore related to documentation that predated his final report, and I indicated that I would exclude that evidence.  VE Dean was questioned extensively by me, and by the operator’s representative, about alleged tampering with the Diesel Particulate Filter (“DPF”) which resulted in a delayed “S” marked prohibition being issued during his visit and about another vehicle which had a disconnected ad-blue pipe that had been blocked off with a screw and which also resulted in a delayed “S” marked prohibition being issued during the same inspection.  Peyton Spallek also gave her oral evidence at the hearing on 10 September and answered questions from me and from Mr Davies.

Paul Brain and Simon Bartrum (the operator’s workshop supervisor) gave evidence at the hearing on 12 November 2024, responding to questions from both Mr Davies and from me.  I heard closing submissions from Mr Davies on behalf of the operator and transport manager and heard submissions as to the operator’s financial position in closed session before reserving my decision.  

6. Findings of fact

The evidence is clear that the operator failed to comply with the undertakings on the licence that its vehicles and trailers would be kept fit and serviceable as evidenced by the prohibition notices issued, including “S” marked prohibitions for tyre tread worn beyond the legal limit, exhaust system leaking with significant deterioration, emission control equipment modified and, on another vehicle, obviously defective.   

It is undisputed that driver Stewart Smith failed to carry out a driver walkaround check on 9 July 2023 when an “S” marked prohibition was issued to the operator’s vehicle for a leaking exhaust system and a tyre tread worn beyond the legal limit. I therefore find that the undertaking that drivers would report promptly any defects or symptoms of defects that could prevent the safe operation of vehicles and that any defects would promptly be recorded in writing was not honoured by the operator.

I have carefully considered the evidence about alleged tampering with the DPF on vehicle M555PEY which was issued with a delayed “S” marked prohibition notice during the DVSA visit, and the evidence about another vehicle (M777PEY) which was also issued with a delayed “S” marked prohibition because the ad-blue emissions system was obviously defective. VE Dean’s evidence indicated that the operator had deliberately tampered with the DPF on vehicle M555PEY and the reason for doing so was to avoid replacing the expensive part.  Aside from the economic advantage to be gained by saving money on the part, the operator would incorrectly be paying a lower bracket of tax because vehicles with DPFs fitted pay a lower level of vehicle tax – the more polluting the vehicle, the more tax the owner pays. The purpose of the DPF is to improve the quality of the air and therefore health. VE Dean believed, from his analysis of maintenance documentation that there had been a recurring fault with the DPF since 30/3/23 and that the tampering occurred on 11/11/23. Obviously, these allegations bring into question the operator’s good repute. The operator did not dispute the fact that its maintenance team had cut open the device but maintained that the reason for doing so was not, as suggested, to remove the internal components, but to find out why it was not working properly.  It now appreciated that it should not have done so, that it would be an immediate MOT fail, and that it had potentially committed an offence in doing so, but had believed this to be a legitimate practice at the time. The operator’s bundle included an online article advocating that vehicle owners should cut open and look inside the DPF if it appeared to be blocked or damaged, although this appeared to be from an Australian website.  The operator replaced the part at a cost of £1,981.68. It had also carried out its own emissions test immediately after the DVSA visit and it passed, indicating that the internal components were in fact intact.  The fault was found to be with the wiring. Neither Ms Spallek nor Mr Brain knew about the tampering at the time and Mr Brain could not explain why there were no records of that work carried out by the operator’s internal maintenance team. I have weighed the conflicting evidence, and, on the balance of probabilities, I am unable to find that the operator deliberately tampered with the DPF for cost saving reasons or in a deliberate attempt to circumvent the purpose for which it is designed.  Similarly, in respect of vehicle M777PEY, there was conflicting evidence about circumstances of the AdBlue pipework being disconnected, how, why and when that had happened. If, as was suggested by VE Dean, the defect found by him during his inspection was the same defect picked up during a maintenance inspection on 22 May 2023 which had not been properly repaired, or if the screw had been inserted deliberately to block off the system and prevent it from functioning, that would be extremely serious and bring into question the operator’s good repute and fitness to hold an operator’s licence.  Having considered all the evidence, on the balance of probabilities, I am unable to make such a finding. I do make a finding that the undertaking to keep records of routine maintenance and make these available on request was not honoured by the operator.

The operator failed to comply with the undertaking on its licence that the Traffic Commissioner would be immediately informed of any changes or convictions which affected the licence. Mr Brain accepted that at a Public Inquiry on 28 September 2020 he agreed to the following licence undertaking

“the operator will recruit and appoint a suitably experienced and qualified transport manager who will be employed on a full-time basis and paid at a commercial rate and in any event no less than £35k to £40k per annum.”

That bespoke undertaking was attached to the licence because of concerns about the transport management arrangements. Mr Brain had previously carried out that role until he lost his repute and was disqualified on that date.  The licence was allowed to continue, but only with that specific undertaking attached, which was intended to give the regulator a level of assurance that a suitably experienced and qualified transport manager would manage the transport operations. In March 2023, the directors’ daughter, Peyton Spallek, was nominated and accepted as an additional transport manager on the licence, alongside Michelle Wood. Michelle Wood had been accepted onto the licence as suitably experienced and qualified, checks presumably having been made by OTC that she fully met the criteria set out in the undertaking.  However, Michelle Wood was subsequently removed from the licence in October or November of 2023, leaving only Peyton Spallek on the licence as transport manger.  This was her very first role as a transport manager and, in her oral evidence, she admitted that she had no experience of vehicle maintenance, was “still learning” and was not paid a salary anywhere near £35k-£40k per annum. She explained that there were things that she was still unsure about, and, in those circumstances, she consulted Mr Brain (her father), Mr Griffiths, Mr Bartrum or Mr Dawson for advice.  However, none of those individuals is a qualified transport manager and Mr Brain had lost his repute following adverse findings made in 2020. From the point that Ms Wood left, in October or November of 2023,  the undertaking on this licence was not being fulfilled.  Mr Brain suggested that it was his intention to recruit another transport manager at that time, but that had proved difficult due to a lack of suitable candidates. However, it was accepted in submissions that this undertaking had not been fulfilled as, quite apart from the fact that Ms Spallek was not being paid the minimum required salary, it would be difficult to argue that she met the requirement of being “suitably qualified”.  This undertaking was attached to the licence by a Traffic Commissioner for a very specific reason, which the operator was well aware of and its failure to honour that undertaking does go to the question of repute. However, on the evidence I am satisfied that Ms Spallek was not transport manager in name only, although it is clear from the adverse findings set out in this Decision that she did not carry out that role as effectively as was required and I am concerned that she looked to others for guidance and support, who were not qualified to provide that and which no doubt contributed to the failings found.   

Accordingly, I find that section 17(3)(aa) of the Act is made out.

It is undisputed that the operator has been issued with prohibition notices by the DVSA in the past 5 years, including “S” marked prohibitions.  Accordingly, I find that section 17(3)(c) of the Act is made out.

I do not make a finding that the operator has breached the conditions on its licence or that there has been a material change in its circumstances, namely that convictions have been accrued by a servant/agent of the company.  The evidence does not support such a finding. Those allegations relate to the conviction of driver Stewart Smith, however I am satisfied on the evidence that the driver was dismissed by the operator immediately after the stop that resulted in the “S” marked prohibition being issued and before he was convicted of the criminal offences.  The operator and transport manager had carried out driving licence checks at the appropriate intervals of 3 months, and a check (which would have revealed his disqualified status) was not, in fact, due at the time of the DVSA stop. 

7. Considerations and Decisions

Having regard to the Senior Traffic Commissioner’s Statutory Document 10, Annex 4, and having considered all the evidence, I place this case in the “severe to serious” category.  Operating without a suitably experienced and qualified transport manager from October/November 2023 until this public inquiry was a deliberate act that gave the operator a clear commercial advantage and compromised road safety. The directors’ daughter, Peyton Spallek, quite evidently did not meet the criteria in the bespoke undertaking attached to this licence at the most recent public inquiry in September 2020. The operator has previous public inquiry history (hearings in 2018, 2019 and 2020) which resulted in the number of authorised discs being reduced.  There was ineffective management control and insufficient systems and procedures in place to prevent the operator licence compliance failings. The operator’s prohibition rate is high, with its mechanical prohibition rate around 3 times higher than the national PSV average, and there have been “S” marked prohibitions issued. On the positive side, I find that the operator did co-operate with the enforcement investigation and with this public inquiry process. Although the DVSA evidence initially suggested otherwise (because the operator had failed to update change in ownership/licence records), the operator’s MOT pass rate is better than the national average, and I noted that there had been 9 clear pass results between the date of the DVSA report and the reconvened public inquiry hearing in November.

I’ve considered the situation now and evidence put forward in that regard.  It is clear to me that the operator has taken appropriate action in response to this investigation and public inquiry.  There is evidence that effective changes had been made to address the maintenance failings by the time of the public inquiry hearing in September, particularly as regards tyre management and training in driver daily walkaround checks.  Ms Spallek does not intend to continue as transport manager when she returns from maternity leave and a new transport manager, Mr Hier, is proposed for nomination. He will be employed full time on a salary of £40k per annum. It is recognised by the operator that it must adhere strictly to the terms of the undertaking on its licence in that regard.   

In considering the Priority Freight (2009/225) question, “how likely is it that this operator will, in future, operate in compliance with the operator’s licensing regime?” I have had regard to the failures I have found proved and find that the operator’s good repute is tarnished by those failings, which I consider were serious. However, I have seen tangible evidence of action taken by the operator and agree with Mr Davies that this case is not as serious in many respects as was suggested by the initial maintenance investigation visit report. I find the answer to that question to be, “likely”. He indicated that the operator accepted the serious nature of its failings and appreciated that regulatory action would be taken which would have a commercial impact on its business.  I was provided with detailed evidence in terms of the financial implications of revocation, reduction in the number of authorised discs (curtailment) and suspension, and was addressed in more detail on this during the course of the hearing. Effectively, I was invited to suspend the licence for a period of 16 days over the forthcoming Christmas break, allowing one disc to enable the operator to continue to run its non-profit making service 861 in Porthcawl which is of great importance to the local community, especially the elderly.

I consider that a short period of significant curtailment, by reducing the number of authorised discs from 26 to 1, is proportionate in the circumstances. The number of authorised discs is reduced from 26 to 1 under section 17(2)(d) for 16 days, commencing at 23:45 hours on 20 December 2024.  The operator retains its repute, albeit tarnished.   

An adverse finding is made in terms of section 17(1)(a) of the Act that the operator no longer meets the requirement of financial standing in section 14ZA(2). A period of grace is granted under section 17(1A), as requested by the operator, for a period of 3 months (until 6 March 2025), to allow it to rectify the situation. The operator must demonstrate that it meets the financial standing requirement by showing that it has access to an average of £120,500 over a period of 3 months by submitting bank statements, in the operator’s name, for the months of November and December 2024 and January 2025.  These must be sent to the Office of the Traffic Commissioner at cymru.wales@otc.gov.uk by 15 February 2025.

As to Peyton Spallek, it is clear that the failures that I have found made out occurred on her watch as a professionally qualified transport manager. However, I accept that she was inexperienced and possibly out of her depth, particularly following the departure of Ms Wood. She failed continuously and effectively to manage the transport operations and arrangements are now in place for an experienced transport manager to take over.  In all the circumstances, I find that her repute as transport manager is retained, albeit tarnished.

Victoria Davies
Traffic Commissioner for Wales

 6 December 2024