Decision

Decision for Squareline Transport Ltd – OF2033919 and John Thomas Kelly – Transport Manager

Published 17 April 2023

0.1 In the Eastern Traffic Area

1. Confirmation of the Traffic Commissioner’s Decision

1.1 SQUARELINE TRANSPORT LTD – OF2033919 AND JOHN THOMAS KELLY – TRANSPORT MANAGER

2. Background

Squareline Transport Ltd holds a Standard National Goods Vehicle Operator’s Licence authorising 1 vehicle and 1 trailer. The Director is Nissar Bittar. John Thomas Kelly is listed as the Transport Manager on this licence.

There is one Operating Centre at the Red Lion, Weedon Road, Upper Heyford, Northampton NN7 4DE. Preventative Maintenance Inspections are said to be carried out by the Volvo Truck Centre in Wellingborough at 6-weekly intervals for the vehicle and 12-weekly for the trailer.

The operator and Transport Manager were called to a Public Inquiry on 20 September 2021 following the receipt of a variation application, seeking to increase the authorisation to 2 vehicles and 2 trailers. Adverse findings were made under sections 26(1)(e) - statement committing to a genuine link with the Transport Manager, 26(1)(f) – undertakings: for a finance review, that the vehicle and trailers would be kept in a fit and serviceable condition, to have an effective written driver defect reporting system, and full maintenance records retained for a period of 15 months and 26(1)(h) - material change in the availability of finance.

I made detailed findings, as can be seen at pages 71 to 78. In essence, there had been a failure to notify changes or to seek a Period of Grace to meet the mandatory requirement for financial standing. The Preventative Maintenance Inspections disclosed inadequate roller brake testing with electronic records produced from the Volvo system, but no printouts attached. Brakes were tested in an unladen condition. The operator produced no trailer inspection reports, as the trailers were said to belong to Panther Logistics, which uses a separate trailer defect reporting sheet prepared and supplied by Panther Logistics Exports. I noted there had been very little defect reporting apparent from either trailer forms or the carbonated vehicle books. I expressed concern at the level of ignorance demonstrated. The Transport Manager was supposed to be paid [REDACTED] per month but was invoiced through Mr Kelly’s company. That is unacceptable. I saw a one-page print-out suggesting maintenance planning from December 2020 to June 2022 and referring to YJ65 UJC only.

However, records produced at the reconvened hearing showed a marked improvement but disclosed driver detectable defects on YJ65 UJC. The roller brake testing showed notable imbalances, mainly on the offside. I was eventually provided with trailer inspection records, but not completed by the declared contractor or showing any brake tests. The operator and trailer supplier were directed to the Guide to Maintaining Roadworthiness.  I gave credit for the development of a populated data base and the Transport Manager demonstrated how the rudimentary system might operate to monitor the maintenance of trailers. An undertaking was accepted to have a compliance audit carried out within six months of the inquiry. On that basis I was persuaded to allow a time limited interim licence authorising 2 vehicles and 2 trailers. The purpose of the audit was to provide sufficient evidence upon which I might allow substantive grant. That interim authority expired on 28 March 2022.

3. Hearing

The Public Inquiry was listed for today, 22 August 2022, in Tribunal Room 1 of the Office of the Traffic Commissioner in Cambridge. was present in the form of Mr Bittar, the Director. Mr Kelly was also in attendance, neither were represented.

4. Issues

The public inquiry was called at the request of the operators and following notice that I was considering grounds to intervene in respect of this licence and specifically by reference to the following sections of the Goods Vehicle (Licensing of Operators) Act:

• 26(1)(b) – condition to notify changes which might impact good repute and professional competence

• 26(1)(e) – statements: that John Kelly would exercise effective and continuous management as Transport Manager, to comply with declared inspection intervals, to abide by the licence conditions

• 26(1)(f) – undertakings: that vehicles and trailers would be fit and serviceable, to employ an effective written driver defect reporting system, to observe the rules on drivers’ hours and tachographs,

• 26(1)(h) – material change:

• 27(1)(a) – good repute, financial standing, Transport Manager exercising professional competence

• 28 – disqualification of directors and operator to be considered

Mr Kelly was called in his position as Transport Manager to consider whether he has met the requirements of Schedule 3 and in particular the statutory duty to exercise effective and continuous management of the transport operation, and whether I should make a direction under section 27(1)(b) which would prevent him from relying on his Certificate of Professional Competence.

I refer to the audit below, which confirmed grounds upon which I remained to be satisfied as against the following sections of the Act:

• 17 – variation application.

• 13A(2)(b) – good repute

• 13A(3) – Transport Manager who meets the requirements of Schedule 3

• 13C(2) – satisfactory arrangements to comply with the requirements on drivers’ hours and tachographs

• 13C (4) – satisfactory arrangements and facilities to maintain vehicles and trailers to the required standard.

The application was withdrawn on-line on 9 July 2022.

The operator was directed to lodge evidence in support by 8 August 2022, including financial, maintenance and other compliance documentation. Financial evidence was not produced in advance of this hearing. As noted, this is the second Public Inquiry within a short period of time, so the operator should have been more than aware of what was required. The statements analysed immediately before the hearing disclosed an average, which was not even sufficient to support the establishment of an operation with one vehicle. Monies held in accounts belonging to other people are not available for these purposes.

5. Summary of Evidence

Further to the undertaking given at Public Inquiry in September 2021, The Office of the Traffic Commissioner received an email on 8 March 2022 attaching an audit report completed by Mr Alan Brooks of Transport Management Services on 28 February 2022 (pages 83 to 153).  It is in four parts: maintenance audit and summary, tachograph audit and summary. Mr Brooks adopts a kind of traffic light system. The document appeared to cover elements of the audit template provided by the Office of the Traffic Commissioner. A letter dated 4 March 2022 was also attached to the email, setting out 13 actions which needed to be implemented.

Mr Brooks categorised the following areas as ‘Amber’:

• Operator Licence details - sufficient evidence needs to be available for CPD, the Transport Manager has received no refresher training since obtaining his CPC in 1974.

• Staff – a contract for the Transport Manager should be in place

• Driver Walk round checks - regular training should be given and documented.

• Driver responsibilities - evidence to confirm they are aware of their responsibilities.  Training on Safe loading and Load Security should be undertaken

• Wheel Removal, Re-Torque and Tyre Management - procedure for re-checking to be fully documented.  Drivers should be trained on identifying tyre defects.

• Safety Inspect Report forms - a system should be put in place so that records are easy to follow.  Vehicle/Trailer are laden when roller brake tests are carried out.

• Evidence that the contractor is technically competent. Delegation to change/remove/add vehicles to be sent to relevant parties.

• Tachograph Calibration - all calibration certificates should be held on file.  They are currently taken from the Preventative Maintenance Inspection reports.

• Drivers Hours Analysis and Infringements - manual entries must be made for periods of other work.

• Infringements - records should be checked to confirm walk round checks carried out at start of duty.

Mr Brooks categorised the following areas as ‘Red’:

• Driver Defect Reporting - defects reported get prompt attention. Defect report showing defects to be separated from Nil defect sheets. Driver defect reports checked and drivers shown when they are incorrectly completed.

• Safety Inspections - reports not returned with vehicle.  System needed to monitor sheet is returned.  Inspection intervals being exceeded.

• Quality Monitoring - system to be put in place to monitor the driver walk-round checks.  Regular monitoring needed to check all systems and procedures up to date.

• Driver Training - Ensure drivers are trained on equipment and requirements.  No on-going instruction on drivers’ hours.  Drivers should be made aware of responsibilities regarding drivers’ hours in writing.

The content of the audit was surprising, given the previous Public Inquiry and detailed record supplied to the operator and Transport Manager on 29 September 2021. The audit showed that there was still no evidence of a contract with the Transport Manager or evidence of refresher training, no quality assurance, no evidence of laden brake performance testing, no evidence of the action required to strengthen the driver defect reporting/safe loading/drivers’ hours/wheel security, inspection intervals badly planned and exceeded, no evidence of wheel re-torquing on two vehicles, concerns over who is inspecting trailers and the qualifications of the contractors, the recording of other work and driver walk rounds, how casual drivers are managed. No evidence of proposed dates for driver training were provided.

I compared the audit findings with my previous decision. The auditor appeared to be expressing concern at the level of management, with recurring weaknesses in the driver defect reporting system and a lack of quality assessment of the inspection records. Inspection intervals appear to be erratic and had been exceeded, with forward planners being stored in individual vehicle files with the Transport Manager. There were still no brake test printouts attached to the inspection records, although the inspection records shows that those tests were in an unladen condition. The auditor advises of the need for laden tests. There appeared to be no evidence of wheel re-torquing on two vehicles, so procedures were not being followed.

The auditor confirmed ineffective management so that defects identified at walk round checks were addressed promptly. He found evidence that driver defect reports had been completed incorrectly. He advised that drivers need to be made aware of their legal responsibilities with better monitoring of the defect reporting and all compliance systems. There appeared to be no checking of drivers’ hours records to monitor the time spent on walk rounds. He found no evidence of manual entries with ‘other work’ recorded as rest days. In other words, the records were inaccurate. The attention to detail lacking from those systems was reflected in the 3-line contract with the Transport Manager dated 1 March 2022 (6 months after the previous Public Inquiry) and a ‘Driver Guide’ which consisted of just over 2 pages of text and a diagram apparently copied from the Guide to Maintaining Roadworthiness. The two invoices produced pre-date the previous Inquiry.

Mr Bittar was described as the only employed driver with reliance on agency drivers for other work, but no declarations were found, and the auditor advised on the need to keep records of driver licence checks. Indeed, driver defect reports were limited to the period of January to March 2022. They show the names of at least 6 other drivers. None accord with the driver detectable defects disclosed on the Preventative Maintenance Inspections. Two more names are disclosed by the limited infringement reports produced (September/October 2021, November 2021, January, February 2022). Driver Michalak did not appear to use his full name on the driver defect reports

My further dip sampling of records disclosed the following:

5.1 YJ65 UJC

• 29 July 2022 – inspection with roller brake test: 25%, 17%, 12% with insufficient load on axles 2 and 3 resulting in imbalances.

• 20 June 2022 – inspection with brake test: 45%, 19% with insufficient load on axles 2 and 3 resulting in imbalances. It also records defective lamps, tyres, chipped windscreen, and an oil leak.

• 6 May 2022 – inspection with roller brake test: 44%, 20%, 23% with insufficient load on axle 2 resulting in imbalances. It also records a defective interior light (again).

• 28 March 2022 – inspection with roller brake test 29 March 2022: 49%, 20%, 23% with insufficient load on axle 2. It also records defective wipers, interior light, tyres, wings/spray suppression, oil leak. It also indicates that a replacement tachograph roll is required.

• 6 January 2022 – inspection with roller brake test: 33%, 17%, 14% with insufficient load on axles 2 and 3 resulting in imbalances. It also records a defective seat belt

5.2 C126476

• 20 June 2022 – inspection with roller brake test: 15%, 6% with insufficient load on all axles. It also records defective lamps and the wing pole as loose.

• 28 March 2022 – inspection with roller brake test: 37%, 15% with insufficient load on axle 1. It also records defective trailer legs, lamps and a piece of metal sticking out from the body.

• 9 February 2022 – inspection with roller brake test but no printout: 27%, 11% unladen. It also records defective lamps and tyres.

I gained a similar picture from the records for KX15 NZW where no driver defect reports were produced. The vehicle was regularly presented with insufficient loads on various axles so that the required brake performance could not be achieved.

6. Determination

Mr Bittar referred to the amount of money spent maintaining the second vehicle after the time limited interim had expired. It was his decision to pursue that application even after receipt of the disappointing audit. That was only abandoned in July 2022. He was aware of the need to retain financial standing, as this formed part of the decision last September 2022. As the Upper Tribunal explained in 2012/017 NCF Leicester Ltd, being of appropriate financial standing has always been considered to be a continuing requirement; in other words, it is a requirement that the operator must satisfy for the duration of the licence. “It is necessary for road transport undertakings to have a minimum financial standing to ensure their proper launching and administration”. In our view ‘administration’, for the purposes of this Regulation, means the organisation and running of a haulage business which holds an operator’s licence. In particular the requirement is intended to ensure that vehicles can be operated safely because the operator can afford to maintain them promptly and properly.” In the absence of the required evidence, it was inevitable that I record adverse findings under sections 26(1)(b), (e), (h) and 27(1)(a).

I referred to the evidence summarised above. On that basis I recorded adverse findings under sections 26(1)(f) – undertakings that vehicles and trailers would be fit and serviceable, to employ an effective written driver defect reporting system, to observe the rules on drivers’ hours and tachographs. I noted that the nature of the operations had slightly changed with a move away from work for Panther. Mr Bittar told me that he uses his own trailer to undertake work for Amazon and that it is just him now driving. I also noted an improvement in planning. The trailer database/schedule is no longer as important, but Mr Kelly has annotated the planner with odometer readings, where the trailer has been inspected. However, I was particularly disappointed by the approach to brake testing and driver defect reporting. Mr Bittar detailed his conversations with the Volvo main dealer. He was apparently told that it was sufficient for brakes to lock, even when tested in an under-laden condition. Reference was made to the use of the test trailer, but brake test results are still unacceptable.

DVSA’s ‘Understanding your HGV or trailer’s brake test report’ advises: Your vehicle must be loaded for a brake test - ideally to at least 65% of its total maximum weight. It can only be tested unladen if it cannot be loaded due to design limitations or the type of load it normally carries. It goes on: If a result says ‘Pass (Locks)’ If your report shows a result of ‘Pass (Locks)’, your vehicle will have passed because more than half of its wheels locked during the test. Although your vehicle passed, your wheels may have locked too quickly to give accurate results. If this was because your vehicle wasn’t loaded to at least 65% of its weight, you should get another brake test with a properly loaded vehicle as soon as you can.

I contrasted that with the approach of Mr Bittar and Mr Kelly, who appeared to have allowed compliance to be dictated by the contractor, despite the warnings given at the last Public Inquiry, Accordingly I found that the statement for Mr Kelly to exercise effective and continuous management has not been met. I was able to record an improvement in planning and that intervals were now being complied with but noted the historic weaknesses. I recorded those findings under sections 26(1)(b) and (e). For those reasons and having given considerable benefit on the last occasion, I concluded that Mr Kelly was not meeting the statutory duty. He had still to book any kind of refresher training. He suggested that he might be interested in attending training with the Road Haulage Association. I satisfied on the evidence that he should not rely on his Certificate of Professional Competence unless and until he attends a minimum of two days of Transport Manager CPC refresher training delivered by a trade association (Logistics UK/RHA/BAR/CPT), professional body (IoTA/CILT/SOE/IRTE), or an exam centre approved by an accredited body to offer the transport manager CPC qualification in goods transport. Following which he will need to satisfy a Traffic Commissioner that he can meet the statutory duty. I made that direction under section 27(1)(b).

As at the last Public Inquiry, I referred to the test set by the Upper Tribunal in 2009/225 Priority Freight question, namely: how likely is it that this operator will, in future, operate in compliance with the operator’s licensing regime? If the evidence demonstrates that it is unlikely then that will, of course, tend to support a conclusion that the operator ought to be put out of business. The absence of financial standing and a Transport Manager inevitably led to the conclusion that the licence must be revoked, but I went on to consider the operator’s repute.

The Upper Tribunal developed the relevant principles in 2013/082 Arnold Transport Ltd. As it clearly stated there, the grant of an operator’s licence does not mean that an operator can then proceed on the basis that the requirements that must be met to obtain a licence can thereafter be disregarded. These are continuing: “we wish to stress that once it appears that the licence-holder is no longer of good repute, or of appropriate financial standing or professionally competent the licence must be revoked because the Act makes it clear that there is no room for any exercise of discretion. Second, the use of the expression ‘at any time’ makes the continuing nature of the obligations crystal clear…. 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.”

Given the previous intervention, it is perhaps inevitable that I would find there to have been persistent breaches of licence requirements. The operator’s own audit records ineffective management control including procedures for drivers’ hours, ineffective training and driver instruction and insufficient change since the last intervention. Those negative elements place the case in a category of SERIOUS to SEVERE. I have attempted to capture the few positives, but they are minor and follow the considerable assistance and heavy steer given at the previous Public Inquiry. I therefore concluded that the operation could not continue as it has been. I took account of the way in which work is obtained from Amazon. In not disqualifying the operator, I gave credit for the improvements noted above, such as they were. However, when I considered the next stage under 2002/217 Bryan Haulage (no. 2) - “is the conduct such that the operator ought to be put out of business? the answer to that question was clearly: Yes, for all the reasons explained in Arnold Transport: operator’s licensing is based on trust. Since it is impossible to police every operator and every vehicle at all times the…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. I accept that Mr Bittar has tried to achieve compliance, but the safety of the public requires operators to do more than try, but instead they need to meet the basic requirements of the licencing regime. I refer to the opportunity which was afforded at the last Public Inquiry. I therefore made that adverse against the operator’s repute, under section 27(1)(a) and revoked the operator’s licence from 23:45 on 31 October 2022, to allow a safe run down of the operation. It will be for the operator to determine whether it wishes to apply for a new licence but will need to show that it can now comply.

R Turfitt

Traffic Commissioner

22 August 2022