Decision

Decision for Welldone Logistics Ltd (OF2008341) and Simon Willitts – former transport manager

Published 8 October 2020

In the Eastern Traffic Area.

Confirmation of the Traffic Commissioner’s decision.

1. Background

Welldone Logistics Ltd was incorporated on 13 January 2017. The company submitted an online application for a standard national operator’s licence on 14 November 2017. The application was to authorise the use of two vehicles and two trailers from the operating centre at Minorca Warehouse. A variation application was granted on 29 May 2018 to add a new operating centre for two vehicles and to upgrade the licence to standard international. A further variation was granted on 13 August 2018 to increase the total authorisation to nine vehicles and four trailers.

The Director is Marek Krawczynszyn and the current Transport Manager is Nicola Boulton, who was appointed on 3 July 2019. I was told that she attends the operation between 9 am and 4 pm on Mondays and is in telephone contact on a Friday.

2. Hearing

The hearing was originally listed on 4 February 2020 but was adjourned in the interests of justice. The reconvened Public Inquiry took place on 9th July 2020 in Tribunal Room 1 of the Office of the Traffic Commissioner in Cambridge. The operator was physically present in the form of Mr Krawczynszyn, the Director, assisted by the current Transport Manager, Ms Boulton. The former Transport Manager, Mr Willitts was represented by Carloyn Evans of CE Transport Law.

I was so concerned by the circumstances that I retired to consider my decision, which I have recorded in this document.

3. Issues

The operator was called to Public Inquiry for me to consider making a direction in respect of the following legislation:

• section 26(1)(b) condition to notify relevant changes in finance
• section 26(1)(c)(iii) prohibition notices (page 57)
• section 26(1)(ca) FPN 13.8.18
• section 26(1)(f) undertakings to ensure that vehicles and trailers are operated in a fit and serviceable condition, and to have an effective written driver defect reporting system.
• section 26(1)(h) material change:
• section 27(1)(a) repute, financial standing, professional competence.
• Section 28 potential disqualification.

Ms Evans very helpfully submitted written representations during the period when tribunal hearings were suspended. In the interests of fairness to the operator and former Transport Manager I found it necessary to convene a Public Inquiry.

4. Evidence

The matters at issue pre-date the pandemic. . Incomplete online bank statements were received by email from the company on 21 January 2020; maintenance documentation to January 2020 was received on 25 February 2020, in advance of the previous listing.

The company made an application to increase authorisation to 22 vehicles and 30 trailers on 4 February 2019. Interim authority was granted by a DTC to allow opportunity to demonstrate financial standing on a continuing basis through March, April and May 2019. Chasing letters dated 11 July 2019 and 29 July 2019 had to be sent to the operator but no financial evidence was received. The company eventually withdrew the application. I was told this was because the customer would not sign a contract without substantive grant. It illustrates to me the whole approach to the O/L requirements, where the operator waits to be told what is required.

As a result of the financial evidence which had been submitted the OTC sent further correspondence on 16 August 2019, proposing to revoke the operator’s licence and requesting the return of the interim licence documents and vehicle discs. Replies were received, dated 27 and 28 August 2019, stating that the company had access to funds, but it was unable to demonstrate this. The average showed insufficient funds to support one vehicle. A Public Inquiry was requested.

There was further correspondence with the then legal representative for the operator, expressing concern at the apparent inability to provide satisfactory financial evidence. The operator was alerted to the approach described the Upper Tribunal in in A N D Haulage Ltd if sufficient finance were not received. Representations were invited but nothing was received from the operator. However, Ms Boulton contacted the OTC by email on 21 April 2020 and it was explained what was required. Four emails were received on 23 April 2020 with some financial evidence. The operator was notified on 8 June 2020 that the evidence was still not sufficient to show financial standing.

I was so concerned at the level of ‘management’ suggested by the correspondence that I found it necessary to intervene. The operator was aware that it had failed to supply evidence of sufficient financial standing. There has been no application to reduce authority or a PoG. I referred to the applicable EC regulation. The intention behind the regulation is to ensure common rules. Such common rules are intended to contribute to the achievement of a higher level of professional qualification for road transport operators, the rationalisation of the market and an improved quality of service, in the interests of road transport operators, their customers and the economy. The Regulations allow Member States to adapt the conditions with which to comply in order to pursue the occupation of road transport operator in the outermost regions referred to in Article 299(2) of the Treaty but, in the interests of fair competition, the common rules governing the exercise of the occupation of road transport operator should apply as widely as possible to all undertakings.

It is the responsibility of the Member State of establishment to verify that an undertaking satisfies at all times the conditions laid down in this Regulation so that the competent authorities of that Member State are able, if necessary, to decide to suspend or withdraw the authorisations which allow that undertaking to operate on the market. The Regulation is clear that it is necessary for road transport undertakings to have a minimum financial standing to ensure their proper launching and administration. Recital 12 calls for road transport that is fully compliant with the rules and requires a uniform level of monitoring by Member States. It goes on to state that national authorities are expected to take suitable measures if necessary, in particular in the most serious cases by suspending or withdrawing authorisations. This must be preceded by due consideration of the measure with respect to the proportionality principle. An undertaking should, however, be warned in advance and should have a reasonable period of time within which to rectify the situation before incurring such penalties. The operator was put on notice in my last decision.

Article 13 establishes the process, whilst Article 13.2 allows for discretion, but where the competent authority establishes that the undertaking no longer satisfies one of more of the requirements laid down in Article 3, in this case financial standing, it shall suspend or withdraw the authorisation. I then also referred to the decision in 2012/017 NCF (Leicester) Ltd, which reminded Traffic Commissioners of the purpose of the requirement and by reference to the recitals. It is required to ensure the proper establishment of the transport undertaking. That includes the maintenance and safety of vehicles. In this case I am referred to a previous unsatisfactory maintenance investigation. I was therefore satisfied that direct intervention was required to ensure that the operator has that level of finance to continue operating, that this is necessary to ensure the safety of other road users as the operator continues to operating, apparently in an unsafe and unacceptable manner. The temporary suspension was listed upon receipt of further financial evidence. I was eventually supplied with evidence as grounds for a Period of Grace. On the operator’s application I made the adverse finding under section 27(1)(a) so as to allow a period to the Public Inquiry.

The overall conduct remained to be considered at a Public Inquiry. I regret that upon the evidence produced in advance of this hearing, the operator was able to show financial evidence which was sufficient to support three vehicles by reference to the average. This was after a bounce back loan and other grant had been made available to the operator. Another amount was deposited into a separate account, but this was left so late as to make almost no impact on the three-month average, which is the test for existing operators. I refer to the appeal decision in NCF Leicester which explains that it is not for Traffic Commissioners to reduce authorities to the level for which there is finance. It is for the operator to make that assessment and to make the appropriate application. Considerable advice and support was given to this operator and, despite the long period of time summarised above, it is still not the case that financial standing can be satisfied. I considered carefully whether I might use discretion to extend the period of operation but for the reasons set out below and as a matter of fairness to other operators who have struggled to maintain operations particularly over the last few months, I do not consider that to be the required course, particularly where safety is at doubt.

Directions were given to submit up to date maintenance and compliance records 7 days in advance of the Public Inquiry. Ms Boulton emailed the OTC on 29 June 2020 asking what evidence needed to be submitted and received advice on 1 July 2020. Nothing was received. In the course of the Public Inquiry the OTC was emailed the following Preventative Maintenance Inspection records: DA61 YPC – 9.3.20, no brake test; 20.4.20, no brake test; 12.5.20 , no brake test; GK11 OLB – 15.2.20 failed roller brake test, signed off as fit but without outstanding rectification required on the front near side tyre and windscreen. All those inspections were conducted in-house. I could see from various accompanying invoices that some money was being spent but the management was simply inadequate.

This is reflected in the annual test initial pass rate stands at 60%. This is based on 15 tests with two were ‘PRS’ and 4 failures. I accepted that the period of Mr Willitts’s appointment, between 23/02/2018 to 02/07/2019, the annual test initial pass rate stood at 57.14%. I went through the appalling test history around July 2019. In addition, the Director was unable to provide any real explanation or reassurance around the three roadworthiness prohibitions issued (one immediate and two delayed), the one driver’s hours’ offence notice and two Fixed Penalty Notices issued.

I accept and give credit for the results of the investigations by DVSA Taffic Examiners. Mr Slaney visited in May and July 2018. He conducted a review of the drivers’ hours, and tachograph data. He was generally content and there was apparently some positive interaction with Mr Willitts. On 13 November 2018, MV54 CWG was issued with a Prohibition and Fixed Penalty Notice as driver Lukasz Zagorski had taken insufficient weekly rest. Following this Mr Young conducted his inquiries. There was an apparent acceptance of how the deficiencies occurred and DVSA decided to take no further action. I have also noted the involvement of an external analyst and that the downloading arrangements go beyond what is required in law.

I am unable to make similarly positive observations in respect of the maintenance compliance. As I questioned the Director on the prohibition notices the response was one of: I do my best or what more can I do. There was a level of ignorance about basic guidance such as the Guide to Maintaining Roadworthiness. He was unclear about brake testing requirements and admitted that he paid little attention to the content of PMIs forms. He has certainly not read any of the Statutory advice published on my behalf. He failed to notify me of changes in maintenance contractors, was vague about the possibility of anther supplier. Miss Boulton then confirmed that this additional contractor had never been used. Mr Willitts told me that he had repeatedly raised concerns about at least two of the contractors and the use of in-house inspections. In his words the operator is not equipped. This is reflected in the state of the few documents produced and the lack of preparation for test. The Director acted as though this was a new licence. It was issued in 2017 and yet he thought it acceptable to present vehicle for test in July 2019, to see what was wrong with them.

I could not avoid the impression that these issues reflect an absence of the finance required to support a proper establishment and the maintenance of vehicles and trailers in a safe condition. This was confirmed by Mr Willitts and indeed from the reaction of the current TM to the evidence heard. Even when an expansion was proposed and Mr Willitts approached Mr Krawczyszyn about working more hours, this was declined due to cost. I was staggered to learn that Mr Willitts had originally been engaged at a rate of £700 per quarter (less than £250pcm). In exchange, he would visit the premises on a Saturday, speak to the Director and manager if they were in attendance before taking the paperwork away. TMS analysis, which he received on a Monday via email. Mr Willitts returned the completed files etc during the week or on the following weekend, whichever was easiest for both parties.

Mr Willitts was apparently surprised to read in the PI bundle that the MOT pass rate was low. He should not have been. He told me that he asked to see the paperwork but, on his own admission, he allowed an unacceptable situation, where he was not meeting the statutory duty, to go on for far too long. Mr Willitts was unaware of the OCRS facility, confirming his need for refresher training. He has offered, and I accepted an undertaking to provide proof of attendance at the training which is half completed (by 17.7.20). The two further prohibitions (and FPN) dated 18th June 2019 for load security and a malfunctioning indicator lamp followed his departure, but it could not be said that he was in effective management during his period of appointment. He accepted that he left the management of the drivers to Mr Krawczyszyn and Mr Poslednik, that he should have sought independent verification of the information provided by the Director, and did not perform the 15 hours he suggested on the application form. That has left his repute tarnished and he has been warned that there can be no repeat.

5. Decision

I am satisfied that the breaches under sections 26(1)(b), (c)(iii), (ca), (f) and (h) are made out. I have set out to explain the importance of financial standing above. In that context I remind myself of what the Tribunal said in 2013/022 David James Roots t/a Orange Coach Travel the jurisdiction… is ‘preventative’ in nature. By this we mean that TCs are not required to wait and then react after some serious event has occurred because they can, when the evidence justifies it, take action to prevent the serious event from occurring in the first place. I have proceeded to ask myself whether I could allow this operation to continue even if I were not obliged to revoke it on the basis of a lack of financial standing, under section 27(1)(a).

I have started, as ever, with the question posed in 2009/225 Priority Freight; how likely is it that this operator will, in future, operate in compliance with the operator’s licensing regime? As that decision indicates, 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. A Commissioner looks at the operation as at the date of the Public Inquiry and to the actions which the operator has taken: promises are easily made, perhaps all the more so in response to the pressures of a Public Inquiry. What matters is whether those promises will be kept. In the present case the Appellant company was entitled to rely on that old saying that ‘actions speak louder than words’. I regret that I return to the underlying cause of these failings, namely money. The fitness of the Director is of course an essential element of the company’s repute. In my assessment he does not give sufficient priority to compliance over the practical hurdles of everyday operations, which he shrugs and accepts, without real attempts to manage the risks. This may be due to ignorance, but the issues have been allowed to continue for such a period without effective change that I cannot trust him to take action himself. On that basis the operator must be removed.

In determining the appropriate intervention and the date of effect I have given credit where I can, particularly in relation to his frankness. I have set a date which will allow the operator opportunity to present vehicles for PMI and to show that it can comply. That will be vital if it is to pursue a new application. I have stepped back from disqualification in recognition of the difficult trading environment. However, any application will be rigorously assessed and must be considered by a Traffic Commissioner. The revocation under section 27(12)(a) will take effect from 23:45 on 27 August 2020.

RT/TC/9/7/20