Decision

Decision for Richard Childerhouse & Partners (OF0230181) and Kevin John Childerhouse - Transport Manager

Published 18 December 2020

In the Eastern Traffic Area

Confirmation of the Traffic Commissioner’s Decision

1. Background

The partnership holds a Standard National Goods Vehicle Operator’s Licence authorising 8 vehicles only. The Operator’s Licence was granted from October 1998. The partners are Richard Childerhouse, Jean Vivien Childerhouse, and Kevin John Childerhouse. Kevin John Childerhouse is also the Transport Manager.

There is one Operating Centre at Lodge Barn Farm, Breackles, Attleborough NR17 1ES. There is one declared contractor showing on the licensing record: DNB Mechanical Services undertaking Preventative Maintenance Inspections of vehicles at 5 weekly intervals, from the same address.

2. Hearing

The Public Inquiry was listed for today, 5 October 2020, in Tribunal Room 1 of the Office of the Traffic Commissioner in Cambridge. The operator was present in the form of Richard Childerhouse, partner, and Kevin Childerhouse, partner and Transport Manager, represented by Harry Bowyer, counsel, of Smith Bowyer Clarke.

Directions were given requiring the operator to submit financial evidence and maintenance documentation by 25 September 2020. Some financial statements were received by post but were not sufficiently up to date. Electronic copies of additional financial evidence were only received on 1 October 2020 and further documents on 2 October 2020.

3. Issues

The seriousness of my concerns were conveyed in correspondence dated 17 July 2020, as a result of which the operator requested a hearing.

The public inquiry was called for me to consider whether there were grounds to intervene in respect of this licence and specifically by reference to the following sections of the Goods Vehicle (Licensing of Operators) Act 1995:

• section 26 (1)(b) - fail to notify of change in maintenance arrangements
• section 26 (1)(c)(iii) - prohibitions
• section 26(1)(ca) - Fixed Penalty Notice
• section 26(1)(e) - stating that the vehicles would be given inspections at 5 intervals, carried out by DNB Mechanical Services
• section 26(1)(f) - undertakings to observe the rules on drivers hours and tachographs, to keep vehicles fit and serviceable, that drivers would report any defects in writing, to complete and preserve maintenance records
• section 26(1)(h) - material change:
• section 27(1)(a) - repute, financial standing, professional competence;
• section 28 - disqualification

Kevin John Childerhouse was called separately for me to consider whether he has been exercising effective and continuous management and whether he should continue to rely on his Certificate of Professional Competence.

4. Summary of Evidence

A maintenance investigation was carried out by the Vehicle Examiner, Richard Mason, on 12 December 2019 (page 45), the outcome of which was unsatisfactory. Mr Mason’s findings have been summarised as follows:

• Vehicle KM07 FHL was found to have had one tyre with the incorrect load rating fitted, one loose wheel nut and severe corrosion and insecurity at the nearside cab step (prohibition at page 72);
• there was no evidence of brake performance testing;
• no evidence of an auditable driver defect or daily walk round reporting/recording system in use;
• no forward planning system in place for safety inspections, MoT or tachograph calibrations;
• the preventative maintenance inspection intervals were declared at 5 weeks but had been exceeded on 6 separate occasions for vehicle KM07 FHL;
• annual test history indicates high failure rate: last 5 years at 57% (national at 10%) and over last 2 years being 100% with national at 10%;
• maintenance was being carried out by external contractor but no contract in place.

It was claimed that KM07FHL had been off the road between preventative maintenance inspections and with an off-site specialist to repair the hydraulic tipping system. However, the Vehicle Examiner found no record in the maintenance file to explain the extended inspection schedule. KM07FHL was subject to an inspection check on 29 May 2019. It was noted that there were no brake test results recorded but the vehicle had 4 new tyres fitted. The following day it was submitted for annual test and failed.

The Vehicle Examiner reported confusion over the name of the contractor. The licence shows the declared contractor as DNB Mechanical Services, operating from the same address as the operator. Kevin Childerhouse referred to a DNP Mechanical Services of Unit 15, St Marys Works, Duke St, Norwich, NR13 1QA.

The Examiner pointed to shortcomings in the management of the undertaking. He saw no evidence that Kevin Childerhouse had engaged in professional development.

The operator’s response to the Vehicle Examiner (page 55) admitted that over-reliance on wheel-nut indicators without actual checks had resulted in the prohibition. The vehicle was off-road at one point, which the operator states was the reason for the extended maintenance intervals. However, it goes on to attribute a 10-week gap to an undated inspection sheet and another of 6-weeks, as the operator/Transport Manager thought that was the declared interval. The operator admitted to a failure in checking brake performance.

Traffic Examiner, Susan Lee also carried out a visit. It is correct to record that the Traffic Examiner’s findings were less concerning. Susan Lee’s report at page 60 records that the operation is very paper based and whilst that might work at the time of her inquiries, it would not be capable of managing an increased operation above that of the specified vehicles.

Kevin Childerhouse was the author of the operator’s representations to the Office of the Traffic Commissioner dated 3 August 2020. In that letter he seeks to assure me that there are sufficient financial resources to support this operation. He refers to a Darryl (Darrel) Parker of ‘DNB Mechanical’ as a “very capable HGV mechanic”. I am referred to a list at page 97 and a ‘contract’ with Lodge Farm Recycling Ltd at page 112, dated 8 February 2020. That does not appear to have resulted in formal notification. He apparently consulted with Mr Parker regarding the cab step. Mr Parker confirms the status of the corroded step as “still absolutely secure”. It was Mr Childerhouse’s decision to leave the step until Mr Parker was next in the workshop; from this I implied that Mr Parker is a mobile mechanic, as confirmed in evidence.

I find it concerning that he was unable to explain how the tyres can have had a lower load rating and he has only now taken this up with Kingsway tyres. He assures me that he has now given stricter instructions, but then goes on to undermine assurance by questioning the observations of the Examiner. He assures me that wheel nuts are now checked with a torque wrench and tapping hammer.

He confirms that KM07FHL was taken to GM Hydraulics approximately 2 weeks before the annual test on 30 May 2019. There was a delay in obtaining parts, so the vehicle was brought back for preparation for a new test. It was then returned to GM Hydraulics to have the repair completed in June. He admits what he describes as a small period of use before the repair broke on the lorry and was taken back in July. There was no certainty in this response, only the belief that this may have caused a late inspection. He has been unable to obtain any confirmation from GM Hydraulics.

The Preventative Maintenance Inspections from February 2020 onwards are at pages 103 to 108. The full inspection forms had to be re-served. They do not contain brake testing results. Mr Childerhouse refers to occasional brake testing at Baileys Transport but then admits that the operator had failed to record these tests. He indicates that brake tests are now being carried out on a quarterly basis. However, the attached brake testing sheet indicates that the vehicles were being presented under-laden so that the percentage test results do not equate to a pass (pages 100 and 101). The content of the response suggests that Mr Childerhouse has not been checking the detail of the Preventative Maintenance Inspection sheets. He asks me to accept that inspections are now planned and accepts himself that the new arrangements are “improved”. I have seen a copy of the wall planners. There is now a defect report book and he refers to installing a whiteboard in the workshop. He also refers to talks about driver walk-round checks and wheel nuts; concerningly he refers to these as daily walkarounds.

Kevin Childerhouse attended a 2-day Transport Manager CPC refresher course on 29 and 30 September 2020, apparently delivered by Milebay Consultancy Ltd. Kevin Childerhouse was able to provide a positive response on the percentage load required for a successful rolling road test. The contractor used has permitted the operator to load its own vehicles for rolling road brake tests. Sadly, he has not put that into practice and had failed to notice the issues with brake testing to date. On his own answers he had been content to rely on the direction of the fitter. I saw the annual test pass certificate for KU11 SVK dated 1 October 2020. I heard that the in-house workshop is under cover, well-lit and has access to a full length pit with torque wrench, but I was also told that the operator might rely on Truck East or Volvo to carry out Preventative Maintenance Inspections in future, where there is RBT testing.

Given the history I find it concerning that the Preventative Maintenance Inspection forms continue to pick up issues with the tyres when drivers have not. The inspection on 1 August 2020 refers to an outer tyre cut to the cords on the near side rear axle. Tyres feature yet again on the most recent inspection dated 5 September 2020. The majority of driving is undertaken by Richard Childerhouse. On his evidence that is the main part of his role. The operator has been issued with 2 prohibitions and 1 fixed penalty notice in the past 5 years. On each of those occasions Richard Childerhouse was recorded as the driver.

5. Determination

Initial financial evidence in the name of this operator was not sufficient to support even one vehicle. Financial evidence in the name of another entity (Lodge Farm Recycling Ltd ) was also submitted, which I could not take into account. Latterly I was provided with statements from an additional account, which might have proved sufficient, were that evidence verified by the bank. Mr Bowyer asked for 14 days to provide the originals. It necessitates an adverse finding under sections 26(1)(h) and 27(1)(a). It is the intention to run transport operations through that entity in future. It was suggested that an application would be lodged within the next six months. I have already referred to the contract with the mobile fitter.

On the evidence summarised above, I am satisfied that there is basis to make adverse decisions under sections 26(1)(b) - fail to notify of change in maintenance arrangements, (c)(iii), (1)(ca), (1)(e), (1)(f) – undertakings to observe the rules on drivers hours and tachographs, to keep vehicles fit and serviceable, that drivers would report any defects in writing, to complete and preserve maintenance records, (1)(h) – material change in the management of the transport operation.

I refer to the Tribunal decision in 2012/025 First Class Freight: “While it is true that a transport manager must “effectively and continuously” manage the transport activities of the undertaking for which he or she works and is now required to be familiar with a wide range of topics, including the law in relation to operator’s licensing, that does not mean that the person or persons who control an entity which operates heavy goods or public service vehicles is or are absolved of responsibility. Such a person must know enough to ensure that someone employed as a transport manager is up to the job and they must also be able to supervise them to ensure that they do a proper job. It is, after all, for the director or directors of a company to set the standards which the employees are required to meet.” It was clear to me that the responsibilities for this Operator’s Licence fall, in reality, to Kevin Childerhouse. The other partners do not appear to contribute much. In those circumstances the proposed application needs to be lodged sooner rather than later.

The alleged shortcomings encompass an annual test rate which, even after adjustment, equates to a five-year failure rate of 20% and 50% over 2 years. In his response, Kevin Childerhouse indicated that he relied on a current Certificate of Professional Competence but prohibitable defects were found on the vehicle fleet check. It was also found that preventative maintenance inspection intervals had been exceeded more than once with no evidence of routine brake performance testing, no evidence of auditable driver defect reporting system, no forward planner or other evident management.

This is not a case where an operator has deliberately set out to circumvent or avoid responsibility. It is a case where the management has failed to keep up to date, as the Preventative Maintenance pro-forma dating from 2009 so obviously illustrate. Those have continued in use even after the DVSA visit. That at the very least leaves Mr Kevin Childerhouse’s repute severely tarnished. On his own admission he was ignorant regarding tyre management. He was unable to explain the loose wheel nut and was ignorant of the importance of the passenger step. He showed a similar level of knowledge around the vehicle off-road requirements and preventative maintenance inspection recording. He was apparently unaware of the Guide to Maintaining Roadworthiness requirements which have been in operation since November 2018. He thought a verbal driver defect reporting system was acceptable, which showed no record of rectification. He had not closely scrutinised the records and was unaware of the importance of the preventive maintenance statement of intent. I was alarmed by the attitude in correspondence to the undated inspection sheets and the annual test results. The scales have only now dropped but the operator and Transport Manager have been far too slow to act.

In 2013/082 Arnold Transport Ltd, the Upper Tribunal remarked that, “It is important that operators understand that if their actions cast doubt on whether they can be trusted to comply with the regulatory regime they are likely to be called to a Public Inquiry at which their fitness to hold an operator’s licence will be called into question….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 seems clear that prompt and effective action is likely to be given greater weight than untested promises to put matters right in the future.”

That is what I am presented with in this case, promises to:

• engage laden RBT at every PMI;
• to improve maintenance and supervision;
• to improve driver defect reporting which accurately addresses the risks arising from off-road work (not just a morning walk round) with quality assurance;
• engage a consultant to assist the nominated CPC holder to achieve the statutory requirement for continuous and effective management;
• apply for a licence in the name of the corporate entity.

So, when I pose the question suggested by the Tribunal in 2009/225 Priority Freight: how likely is it that this operator will, in future, operate in compliance with the operator’s licensing regime? The promises remain to be put into action. Returning to the Arnold Transport appeal case: “The Tribunal has stated on many occasions that operator’s licensing is based on trust. Since it is impossible to police every operator and every vehicle at all times the Department in Northern Ireland, (and Traffic Commissioners in GB), must feel able to trust operators to comply with all relevant parts of the operator’s licensing regime. In addition other operators must be able to trust their competitors to comply, otherwise they will no longer compete on a level playing field. In our view this reflects the general public interest in ensuring that Heavy Goods Vehicles are properly maintained and safely driven.” In 2019/025 John Stuart Strachan t/a Strachan Haulage, the Tribunal has again confirmed that “one of the aims of the regime is deterrence, both for the appellant and for operators as a whole, who might be tempted to flout the system”.

In this case deterrence is required to push the operator to take action, when it has been so slow in the past and to reorganise future operations. Mr Bowyer referred to what was termed a ‘controlled revocation’. This term was new to me but equates to intervention where it is made clear that the current situation cannot continue but allows opportunity for management to prove that they are capable of discharging responsibility for compliance, in order to seek a new licence. That is the appropriate course here. This partnership licence will be revoked from 23:45 on 28 December 2020.

Richard Turfitt

Traffic Commissioner

5/10/2020