Decision

Written decision for AZ Haulage Ltd (OC2018114) and Zeeshan Ali – transport manager

Published 23 October 2020

In the North Western Traffic Area.

Redacted decision of the Deputy Traffic Commissioner for the North West of England.

Public Inquiry at Golborne on 17 September 2020.

1. Outcome

On findings made in accordance with Section 26 (1) (a), (c) (iii), (ca) (e) and (f) and Section 27 (1) (a) (in respect of good repute and professional competence) of the Goods Vehicles (Licensing of Operators) Act 1995, this operator’s licence is revoked with effect from 23.45 hours on 3 October 2020.

AZ Haulage Ltd and its director, Zeeshan Ali are disqualified from holding or obtaining an operator’s licence (in any capacity) for a period of 18 months.

The repute of Zeeshan Ali to act as Transport Manager is lost. He is disqualified from acting in the role in any capacity for 12 months.

2. Decision

AZ Haulage Ltd is the holder of a Standard National Goods Vehicle Operator’s licence for 1 vehicle and 2 trailers, granted on 11 December 2018. Zeeshan Ali is the sole director; he also acts as the nominated Transport Manager (TM).

The licence has no previous regulatory history.

Since obtaining his TM CPC in January 2019, Zeeshan Ali has acted as TM both on this licence and on the licences of:

• Z Din Ltd (OC2023866) until his resignation on 17 October 2019;
• Bains Enterprise Ltd (OC2011647) until its revocation on 18 October 2019;
• Adam Haulage Ltd (OB2014021) until his removal on 28 August 2020.

He was also nominated as TM on an application for Bagri Services Ltd (OC2034328). [REDACTED].

The calling-in of this licence to a Public Inquiry was principally triggered by significantly adverse events in February and April 2020:

On 27 February 2020, following an encounter by DVSA, the issue of “S” marked prohibition notices in respect of a tractor unit and trailer, then being driven by Zeeshan Ali on behalf of AZ Haulage Ltd –

• On the trailer there were five defects, three were marked as immediate (I) and two as delayed (D). They concerned the absence of any load security (I), a tyre with tread below the legal limit (I) and a service brake not operating on the first axle (I), a suspension anchor pin worn in excess of the test standard (D) and a service brake imbalance on axle 3, such that the effort was less than 70% of the maximum available on the other wheel. These defects were said to indicate a significant failure of roadworthiness compliance;

• On the tractor unit, two defects concerned a tyre seriously under inflated on axle 3, so that the tyre was off the rim (I) and a suspension shackle pin worn in excess of the test standard (D);

• The insecure load and the defective tyre on the tractor unit led to fixed penalties being issued to Zeeshan Ali in the total sum of £[REDACTED].

On 20 April 2020, following a further encounter, the issue of further “S” marked prohibition notices in respect of the same AZ Haulage Ltd vehicle then pulling a “sister” trailer to that previously stopped –

• There were five defects recorded for the trailer, each immediate in nature. On this occasion, service brakes were not operating as designed to do so on each of the nearside axle 2, offside axle 2 and offside axle 3 of the trailer, brake efficiency was too low to meet the prescribed requirement and again that there was no load securing in place. These defects were said to indicate a significant failure of roadworthiness compliance;

• The vehicle itself attracted a single prohibition for a damaged tyre on axle 2, where the cords were exposed.

The vehicle subsequently attracted a further pair of immediate prohibitions on 8 July 2020 for a further deep tyre cut with cords exposed and another tyre with tread below the legal limit.

Due to COVID restrictions, a DVSA desk based assessment was planned using records to be produced by the operator. VE Foulds’ report was dated 19 May 2020. The outcome was unsatisfactory. The operator had produced none of the records requested. VE Foulds’ enquiries found that the operator was no longer using the nominated operating centre at Ashbourne.

Some records were later produced for the material period but not for all of the trailers. An addendum to VE Foulds’ report was before me. Concerns about brake testing, detection by the contractor of deteriorating parts and “stretching” of maintenance frequencies were noted.

A statement by Traffic Examiner (TE) George pointed to several examples of “missing mileage” in the sample period from 1 January 2020 to 30 April 2020. Acceptable explanations were provided to most of the incidents but the TE also referred to several instances of a driver removing a tachograph card in order to move, while showing he was on a break. It was also admitted by Zeeshan Ali that a period of continuous driving without a break occurred on 22 January 2020, which was of such seriousness that it would have attracted a £ [REDACTED] fixed penalty.

The calling-in letter issued referred to the accumulation of prohibitions, receipt of a fixed penalty and breaches of the Statement of Intent and undertakings attached to the licence. Such were the concerns that the operator’s repute, financial standing and professional competence were brought it question: as was Zeeshan Ali’s repute as TM.

I indicated that I proposed to take into account an allegation under Section 26 (1) (a) of the Act (which had not been included in the call-up letter) that the vehicle had not been kept at the nominated operating centre, when it ought to have been. The issue was straightforward, the position had been referred to in the written statement of Vehicle Examiner (VE) Foulds and was admitted by Zeeshan Ali.

• I had the opportunity at the Inquiry to hear from Zeeshan Ali, and to ask him questions. He told me:

• He now employed a driver, Mr Tamir, and that he had ceased driving himself at the start of March 2020. He had since been office-based as the only other employee of the business (other than Mr Tamir);
• During the COVID lockdown, he had been able to keep running the vehicle with very little downtime, except for maintenance;
• He, however, described himself as being furloughed from May to August 2020. I challenged him as to how he could possibly continue to run a haulage business and act as its TM, whilst following the rules applicable to the receipt of furlough payments, which required him (at least until 1 July 2020) not to carry out any work. He sought to make such a justification: he said he was not physically involved in the business and he could carry out necessary work within two hours. He claimed that he was acting on accountant’s advice that he could act in this fashion;
• [REDACTED]. He accepted he would now be working less than full time but still felt able to carry out his roles as a director and TM;
• He claimed to retain the use of the nominated operating centre but that he also used a more secure location at Langar, Nottingham. I had established that he had made an application to add that site as an operating centre to this current licence but correspondence confirmed that he had been told that a new operator’s licence would be required, since the new site was in a different traffic area, i.e. the North East of England. He admitted that he had taken no further action to pursue that new licence after the notification to him dated 19 August 2020 - a month ago;
• Asked about the prohibitions, he acknowledged “mistakes” in his choice of trailer supplier, in the sense that promises they made about the fitness and serviceability of those trailers were suspect, as became evident at the time of the prohibitions in February and April 2020: he had ceased to use them;
• He described being too trusting of those clients who loaded the trailers, that they would do it right. He acknowledged that personally he had not carried out a check whether the load was secured when picking up the loaded trailer in February 2020;
• No coherent response could be made to my criticism that the two significantly serious encounters, with multiple prohibitions, incidents apparently mirroring each other, that the second ought to have been avoided;
• Addressing the incidence of tyre issues, he said that he had put in place instructions about the need for tyre changes when 4mm was reached. He had appointed a new mechanic and was investigating a phone app to monitor more effectively driver activity and defecting of the vehicle;
• He believed that he “was getting a bit more professional” and he could be trusted to get it right in the future. He wished to save his business and reputation.

I concluded that each of the allegations made under Section 26 of the Act were made out; they were not disputed.

The nub of the case was concerned with whether the company, and Zeeshan Ali as TM, retained their good repute. Case law has established that somehow compartmentalising the repute of a company (with a sole director and guiding mind) on the one hand, and the repute of a sole TM, who is also the director, on the other, is difficult to rationalise. The overlap in expectations is significant. Do I trust Zeeshan Ali in his two roles is a pertinent consideration, the more so when he openly admits his focus is, perhaps entirely understandably, affected by the change in his family circumstances.

The circumstances addressed in the Hearing provide for very serious concerns. The photographs of the state of the tractor unit and the trailers provide a compelling and substantially objective view of the state of disrepair of tyres, deterioration of parts and the neglect of any load securing measures, despite the presence of some suitable fittings. Road safety had been seriously compromised on three occasions with sixteen prohibitable items being detected. The third incident in July 2020, although of lesser seriousness, served to evidence matters had not been resolved, affected as they probably were by Zeeshan Ali being furloughed at the time. I note the evidence of Zeeshan Ali about the steps taken to address shortcomings after the February 2020 incident, in which he was personally involved, they were self-evidently inadequate both as to the physical state of the tractor unit and trailer and in the further example of a load devoid of any of the steps required to be taken to secure it.

Further, the use of an alternative operating centre, and, after it became clear that a new licence application was required to be made, the failure to make such an application, do not demonstrate a readiness to assure compliance, or increase my confidence in any way.

In reaching conclusions about whether good repute is maintained, I have sought to balance the positives and negatives, having taken into account the Senior Traffic Commissioner’s Statutory Guidance.

Multiple features of this case are included in the list of negative factors in the guidance. They include:

• [..] reckless act/s by operator and/or drivers that led to undue risk to road safety or unfair commercial advantage;
• Persistent offending;
• Substantial number of previous prohibitions, or fixed penalty notices;
• Ineffective management control and insufficient [..] procedures in place to prevent operator licence compliance failings;
• Insufficient and/or ineffective changes made to ensure future compliance;
• Operator failed to co-operate with [..] investigation e.g. failure to produce maintenance records [..];
• Road safety critical defects on any vehicle or trailer in service or any “S” marked prohibition;
• High prohibition rate.

The positive factors to set against this are not immediately obvious, other than this is a relatively new licence with no previous regulatory action taken against it. Zeeshan Ali offers assurances for the future, although his understandable desire to give priority to [REDACTED] does not of itself suggest more time and effort will be available for licence compliance, even when his divestment of other TM roles is taken account of. Financial standing is met. A bundle of documents before me do show the renewal of written systems and procedures for compliance.

The making of a direction in the severe category described in the guidance is apt. The negatives referred to far outweigh any positives that may be offered up. The substance of the individual events, in a very short period, bringing the operator before me are just too great to overcome with promises for the future, however well intentioned. I conclude that the company’s good repute has been lost, since when I ask myself the so-called “Priority Freight” question, I conclude I cannot be satisfied that this operator will be compliant in the future. My trust and confidence that the operator will comply with the requirements contained in undertakings under the licence has been completely undermined.

So much so that when I ask myself the “Bryan Haulage question”: Is the conduct of this operator such that it ought to be put out of the business? I conclude that it is appropriate and proportionate to answer that question in the affirmative, given the findings made in the balancing exercise undertaken. The state of the vehicle and trailers has been awful. I find repute is lost. The prohibitions bring in to question road safety, the manner in which the licence has been operated undermines the principles of fair competition in the business, and the failures to fully comply in a timely manner with the investigation undermines the principles and standards of the licensing regime.

I cannot separate my findings about the operator company from those which are relevant to the TM’s repute. These were serious incidents directly relevant to his TM responsibilities. Further, however, that Zeeshan Ali could honestly believe that it would be justified to take the benefit of the Government’s furlough arrangements, which would require him to step back entirely from his role as TM from May to July (to comply with the relevant rules) is not a judgement appropriate or becoming for a TM required to satisfy his statutory responsibility for the continuous and effective management of the transport arrangements. His belief that he might continue the role “for a couple of hours” will likely be a matter that will engage the HMRC in making its own inquiries but it clearly would not meet the needs of this licence. I find that repute is lost as a TM and that he should spend a period out of the role.

This operator’s licence will be revoked with effect from 23:45 hours on Saturday 3 October 2020. This short period during which the licence may be continued is in order to allow an orderly closedown of the business, since I was told the vehicle is typically away Monday to Friday weekly.

I have gone on to ask myself whether this is a case where disqualification should follow: I conclude that such a direction is appropriate and that the exclusion of AZ Haulage Ltd and its director, Zeeshan Ali from the industry as a sole trader, partner or director is necessary. The evidence before me demonstrates he is not an appropriate appointee as the director (or indeed as a sole trader or partner) of a haulage business at this time. The period of disqualification is set at 18 months for both the company and its director.

I find that the repute of Zeeshan Ali as Transport Manager is lost. I declare he is unfit to hold such position and is disqualified from holding office in that role for a period of 12 months.

In reaching this decision, I have taken into account, so far as they are relevant, the additional balancing factors and contingency arrangements which might apply as a result of the COVID-19 Pandemic, embodied in the Senior Traffic Commissioner’s issued additional guidance.

Simon Evans

Deputy Traffic Commissioner for the North West of England

28 September 2020