Decision

Decision for T&M Contracts Limited

Published 6 September 2022

0.1 IN THE SCOTTISH TRAFFIC AREA

1. DECISION OF THE TRAFFIC COMMISSIONER FOR SCOTLAND

1.1 In the matter of the

2. T&M Contracts Limited OM2006235

3. Public Inquiry held at Glasgow on 11 July 2022

4. Background

T&M Contracts Limited (OM2006235) (hereinafter referred to as ‘the operator’) was incorporated on 31 August 1984. The operator’s application for restricted licence for three vehicles and one trailer was considered at public inquiry in November 2018, following allegations, amongst other things, that the operator has been operating without a licence. There is no record of the former Traffic Commissioner’s formal findings, but the decision letter discloses that the licence was granted “with the severest warning short of refusing the application”.

Mr Michael Lally is the operator’s sole director. A former director, Ms Ashlee Lally resigned on 19 October 2021.

A report dated 10 March 2022 by Traffic Examiner (TE) Wilkinson was submitted to my office. It was alleged, amongst other things, that the operator had no proper systems for ensuring that the rules on drivers’ hours and tachographs were observed, despite there having been a previous unsatisfactory TE investigation and assurances given by Mr Lally that improvements would be made.

The public inquiry was initially set down for 30 May 2022. On 25 April 2022, Mr Lally emailed my office advising that he would be on holiday from 26 April until 3 June 2022. He provided vouching in the form of an email confirming his flight bookings and requested that I adjourn the inquiry. I granted that request and directed that a fresh date for the inquiry be fixed. An email was sent to Mr Lally on 28 April 2022 advising him of my decision to adjourn. An electronic copy of the brief of papers for the inquiry was attached to that email.

On 6 June 2022, a package containing a hard copy of the brief of papers and a letter advising that the inquiry had been rescheduled for 11 July 2022 was sent recorded delivery to the operator’s correspondence address. The package was signed for, as delivered, on 7 June 2022.

At 06.03 on 7 July 2022, Mr Lally sent an email to my office querying when a new date for inquiry would be set. A member of my staff responded at 11.51 the same day advising of the new date and also that notification of the date along with the papers for the inquiry had been sent some weeks ago.

At 18.27 on 8 July 2022, Mr Lally emailed my office stating that he had only just received the papers. He stated that they had been put into a drawer when he was on holiday. He asked for a continuation of the inquiry to allow him a chance to respond.

Given that Mr Lally’s email was sent outwith business hours, I was only made aware of it on the morning of the inquiry. I decided, therefore, to consider any request for a further adjournment as a preliminary matter at the inquiry.

5. The Public Inquiry

Mr Lally and TE Wilkinson were in attendance at the public inquiry before me on 11 July 2022.

6. Preliminary matters

Mr Lally advised at the outset of the inquiry that he had been on holiday. He had only received the papers for the inquiry the Friday before, those having been put in a drawer by a member of staff while he was on holiday. Mr Lally had not produced any of the documentation he had been asked to provide for the inquiry, stating that he had not had an opportunity to do so. He advised, however, that he had briefly read the electronic copy of the papers (which included a copy of the call up letter) that had been sent to him by email on 28 April 2022.

Mr Lally asked for a further adjournment of the inquiry to allow him to respond properly to the allegations made by DVSA.

I noted that this was the second occasion upon which Mr Lally had requested an adjournment. The matters raised in TE Wilkinson’s report were serious and included allegations that the operator still had no proper systems for managing drivers, drivers’ hours and vehicle maintenance, despite previous promises to improve. There had been offences identified during a roadside stop, including several incidences of driving off card.

I further noted that Mr Lally’s case had been under investigation by DVSA since March 2020. Prima facie, that case appeared to be characterised by delays in providing information and requests by Mr Lally for extra time to do so.

Mr Lally’s email requesting the initial adjournment advised that he would be out of the country until 3rd June 2022. The flight booking that he produced confirmed that return date. However, the hard copy papers had been signed for as received after that date, on 7 June 2022.

Mr Lally waited until 7 July 2022 to contact my office. I considered that any diligent operator, on notice that a fresh date for a public inquiry was to be fixed, would have been alert to the fact that communication from my office was imminent and made sure that anything which arrived in their absence was brought to their attention.

In any event, Mr Lally was told by my office on the morning of 7 July 2022 of the new date for the inquiry. He had several days, therefore, to gather the evidence requested most of which – simple vehicle maintenance records or evidence of financial standing – should have been readily available to him. Mr Lally failed to do so, advising instead that he had followed the direction in the call up letter that documentation should be lodged seven days in advance of the inquiry. Again, I considered that any diligent operator who had evidence demonstrating that they had effective systems and financial standing would have requested leave to lodge that evidence, although late. Mr Lally chose not to.

Mr Lally told me that he had read the electronic copy of the papers for the inquiry, albeit briefly, when he received the email on 28 April. There was no documentation in addition to those papers before me. I found, therefore, that Mr Lally was on sufficient notice of all of the matters to be considered at the inquiry.

For the reasons set out in paragraphs in paragraphs 12-17, I decided to refuse Mr Lally’s request for an adjournment. I directed that the inquiry proceed as scheduled.

7. Evidence

TE Wilkinson explained that, in March 2020, one of the operator’s vehicles had been encountered by DVSA officers. When the tachograph equipment was analysed, it was identified that the vehicle had been driven on 16 occasions, some for considerable periods of time, without a card inserted. The operator was found not to be locked into the tachograph equipment and data had not been downloaded from it within the required 90 day period.

Due to the issues identified, an investigation into the operator’s systems was directed. As a result of covid restrictions, a desk basked assessment had to be completed, rather than a visit to the operator’s premises. Documentation for analysis was requested from the operator. The documentation was to be produced by 17 June 2020. Mr Lally requested an extension of time and finally produced some documents for assessment at the end of June.

Deficiencies in the operator’s systems for downloading and analysing tachograph data, ensuring compliance with the working time directive, driver training, driver licence checking and maintenance forward planning were identified during the desk based assessment. Mr Lally provided written assurances that the deficiencies identified would be remedied.

Examiner Wilkinson was tasked with following up on the operator’s case to ensure that the improvements promised had been made. In September 2021, he contacted Mr Lally and asked him to provide tachograph data for analysis. Mr Lally failed to comply with that request.

On 9 November 2021, Mr Wilkinson arranged to meet with Mr Lally at the operator’s operating centre. Mr Lally failed to attend that meeting, under explanation that he thought the meeting was to take place at a different address.

On 23rd November, Mr Wilkinson attended the operating centre in a further attempt to undertake an assessment of the operator’s systems. He found that Mr Lally had not implemented any of the systems he had promised following Examiner Cooper’s assessment in July 2020.

Mr Wilkinson prepared a report outlining the deficiencies in the operator’s systems following his visit. He sought responses to the findings in his report, and copies of additional tachograph information, from Mr Lally asking that they be provided by 7 December 2021.

On 9 December, Mr Lally contacted Examiner Wilkinson seeking an extension to the deadline for producing documents. Examiner Wilkinson agreed and asked that a response be provided by 22 December. On 22 December, Mr Lally requested another extension, which was granted, and a fresh date of 5 January 2022 provided.

On 4 January 2022, Mr Lally finally responded to Examiner Wilkinson. His response consisted of an explanation that the company had been closed for a year, except for emergency work, and they had been trying to sort out the tachograph data when they reopened in September 2021. He did not provide the additional tachograph data that Examiner Wilkinson had requested.

Examiner Wilkinson emailed Mr Lally again, asking for the tachograph data and clarification on certain matters. Mr Lally failed to respond to that email. As at the date of inquiry Examiner Wilkinson had still not received any response from Mr Lally.

Mr Lally was the responsible person, as sole director, for operator licence compliance. He told me that he did have systems in place to ensure that he met the undertakings on his licence. His business has been closed down due to Covid for over a year, except for emergency work, and only started operating again in September 2021.

Mr Lally advised that there had been a problem with the compatibility of the tachographs on the lorries but they had finally managed to get Tachomaster ‘up and running’ in November 2021. They had been using it since to generate infringement reports.

Mr Lally admitted, nevertheless, that he operated his vehicles without having a system in place to monitor drivers’ hours or working time between September and November 2021. There had been a lot of staff illness and the person he relied upon to help him with operator licence compliance hadn’t been available.

Mr Lally told me that he spent a lot of money keeping his vehicles roadworthy but accepted that there was no evidence before me to demonstrate that. His MOT pass rate was poor, and he accepted that indicated his maintenance regime may not effective. When asked what he had done to improve that, he told me that he had spoken to the mechanics he used and was now more robust in his dealings with them. He didn’t have any answer as to why he had failed to notify my office of the resignation of his wife as a director.

Mr Lally told me that he employed eight people. Were his licence to be suspended or revoked it would mean that he couldn’t get scaffolding to sites. His business would close down and everyone would lose their jobs. Hiring in vehicles was not a viable option. When asked about the impact of disqualification on him and his company from holding an operator’s licence, he advised that that would have the same effect as revocation.

8. Consideration of the evidence and balancing

Mr Lally is the sole director of the operator and is in sole control of it. His actions, therefore, can be equated with that of the operator itself.

I found Mr Lally to be an unconvincing and unreliable witness. He stated that he accepted responsibility for compliance with his operator licence undertakings, yet he readily offered excuses – staff illness, staff not informing him of documentation arriving, the covid pandemic – for his repeated failures to implement change or to provide information and documentation which had been requested of him.

Mr Lally had failed to co-operate fully or timeously with the DVSA investigations into his transport operation. He was dilatory in his responses, repeatedly seeking extensions of time to meet requests for information which should have been readily to hand. Given further time, he still failed to provide acceptable responses or complete information. Set against that backdrop, I found his evidence regarding his failure to be prepared for inquiry to be wholly incredible. I considered it to be, yet another, poor excuse and an attempt to delay findings of failure on his part.

This operator’s licence had been in force since November 2018, yet in July 2020 serious deficiencies in road safety critical systems were identified. 16 instances of driving off card - each of which would render a driver’s vocational driving entitlement liable to revocation - had been identified. Mr Lally gave assurances that improvements would be made but Examiner Wilkinson found in November 2021 that there had been no change.

Mr Lally’s position was that his business had closed down due to Covid for about a year and that, other than emergency work, they were not operating. However, he admitted that, when the business reopened, he carried on using his lorries without any systems in place for downloading and analysing tachograph data.

Even taking into account the impact that the Covid pandemic had on all businesses, I would have expected a responsible operator to have effected immediate change when such serious matters were brought to their attention. Mr Lally did not. In fact, when his business reopened, he continued to use his vehicles without any proper systems in place, full in the knowledge that he should not have. Such actions indicate a serious disregard for road safety on his part.

Having found I could not rely on Mr Lally’s evidence generally, I did not believe his assertions that adequate systems were now in place to ensure that the operator met its licence undertakings. Had there been, he would have been able to produce documentary evidence in relation to many of them at short notice. I find it more likely than not, therefore, that this operator has not, since the inception of the licence in 2018, had adequate systems in place for downloading and analysing tachograph data, ensuring compliance with the working time directive, driver training, driver licence checking or maintenance forward planning.

The operator’s MOT pass rate is poor. That indicates that there are also deficiencies in its systems for vehicle maintenance. A prohibition had been issued in March 2020 for defects found on one of the operator’s vehicles. In the absence of any documentation demonstrating that an effective vehicle maintenance regime is in place, I also find that the operator’s vehicles are not being maintained in accordance with the licence undertakings.

Standing all of the foregoing, I have concluded that this operator poses a significant risk to road safety. Fair competition has also been impacted as a result of the operator’s failure to have adequate systems in place; systems which other, compliant, operators are required to have and properly manage to ensure that they meet the undertakings on their licence. Mr Lally also admitted that he failed to notify the resignation of Ashlee Lally as director within the required 28 day period. Findings in terms of S.26(1)(c)(iii), (f) and (h) of the Act are made out.

There were few positives in this case. Nevertheless, I was able to give some credit to Mr Lally for attending the inquiry and for his frankness in accepting that he had failed to comply with the undertakings on his licence. I was also prepared to accept that he was not operating for a period of time as a result of the pandemic and that the impact on road safety and fair competition during that time would have been limited.

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

There is no evidence in the past history of this operator which indicates that, should the licence survive, it would comply. This operator’s licence was granted with the most severe of warnings as to future compliance. Mr Lally was on notice, from the outset, of his need to ensure full compliance with the licence undertakings. Despite that, he has repeatedly failed to do so, even under investigation by DVSA and a call to a further public inquiry. His dilatory approach in engaging with DVSA officers amounts to a failure co-operate fully with their investigations.

This is a case which is characterised by repeated attempts to delay and obfuscate on the part of Mr Lally. Such behaviour indicates a flagrant disregard for the operator licensing regime on his part and leads me to conclude that I am unable to trust him, or this operator, in the future. In 2006/277 Michael James Fenlon t/a County Skips the Tribunal said:

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

Given the importance of trust to the licensing regime, even balancing the positives I have identified, I concluded that this operator’s licence could not survive.

Mr Lally was quick to advise me of the allegedly catastrophic consequences that even a suspension of his licence would give rise to. However, there was no financial or other evidence before me to support that position. He also told me that there would be no difference between the impact of suspension and revocation of his licence, or indeed the disqualification of his company as an operator. I found his evidence regarding the lack of distinction between those, very different, regulatory measures to be in keeping with the unreliable nature of his evidence generally. Consequently, I was not persuaded that the operator’s business would necessarily fail if its operator’s licence was lost.

However, if I am wrong in that, then the question posed in T/2002/217 Bryan Haulage (No.2) becomes relevant: “Is the conduct of this operator such that it ought to be put out of the business?” Standing the findings I have made in relation to this operator, it is appropriate and proportionate to answer the Bryan Haulage question in the affirmative.

I had regard to the Senior Traffic Commissioner’s Statutory Document No. 10: Principles of Decision Making, in particular, Annex 4. This case was one where the operator had obtained a commercial advantage over other operators by failing to implement proper systems for the management of drivers, driver’s hours and vehicle maintenance. Those failures had permitted driver offending and put road safety at risk. Mr Lally had deliberately used vehicles without proper systems in place and had failed to co-operate fully with DVSA investigations.

The starting point for regulatory action was therefore severe. I take the view that other operators who carry out their businesses in a compliant manner would be shocked if another operator were permitted to operate a vehicle against this background. I have decided, therefore, that revocation of this operator’s license is a proportionate regulatory response.

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

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

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

This is a serious case, involving breaches of trust which go to the heart of the licencing regime. Road safety has been compromised and the operator has gained a commercial advantage over other operators by virtue of its actions. The operator, under the stewardship of Mr Lally, has failed to properly co-operate with DVSA examiners in conducting their inquiries and to comply with the requirements of the public inquiry process. Such behaviour demonstrates a flagrant disregard for the operator licensing regime and leads me to conclude that a significant period of disqualification is appropriate.

However, notwithstanding the suggested starting point, weighing in balance the positive features that I did manage to identify, I am prepared to restrict the period of disqualification in this case to four years. I disqualify both the operator company, and Mr Lally, from holding an operator licence for that period. For the same reasons, I consider that S.28(4) should apply in this case and I direct accordingly.

Claire M Gilmore

Traffic Commissioner for Scotland

19 August 2022