Decision for Point 2 Point Transport 85 Ltd (OD2009858)
Written decision of the Deputy Traffic Commissioner in the West Midlands for Point 2 Point Transport 85 Ltd and Transport Manager Nedyalko Tsonchev
IN THE WEST MIDLANDS TRAFFIC AREA
POINT 2 POINT TRANSPORT 85 LTD OD2009858
TRANSPORT MANAGER NEDYALKO TSONCHEV
DECISION OF THE DEPUTY TRAFFIC COMMISSIONER
In the matter of the Goods Vehicle (Licensing of Operators) Act 1995
Public Inquiry held at Brimingham on 26 November 2024
DECISION
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On findings in accordance with Sections 26(1)(c)(iii), 26(1)(e), 26(1)(f) and 27(1)(b) of the Goods Vehicle (Licensing of Operators) Act 1995, the standard national goods vehicle operator’s licence of Point 2 Point Transport 85 Ltd OD2009858 is revoked with effect from 23:45 hours on Tuesday 31 December 2024.
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On findings in accordance with Article 8(2) of Regulation (EC) No 1071/2009 and Schedule 3 of the Goods Vehicle (Licensing of Operators) Act 1995, I find Transport Manager Nedyalko Tsonchev is not professionally competent.
Introduction
Point 2 Point Transport 85 Ltd (“the operator”) has held a standard international goods vehicle operators’ licence OD2009858 authorising the use of 8 vehicles and 8 trailers 20 February 2018. There are currently 5 vehicles recorded as being in possession.
The sole director of the operator is Nedyalko Tsonchev. Mr Tsonchev has also been the transport manager named on the licence from the outset.
In preparation for the public inquiry, it was identified that Mr Tsonchev professional competence relied on a CPC certificate issued in Bulgaria on 8 August 2017, 4 months before the application was submitted for the operator’s licence. This called sequence of events called into question if the requirements of Article 8(2) of Regulation (EC) No 1071/2009 that the CPC examination must be sat in the Member State in which the holder has their normal residence or, the State in which they work.
On 9 May 2024, an immediate and “S” marked prohibition notice was issued to the operator after one of its trailers was found to have a defective service brake. It was noted the trailer had received a preventative maintenance inspection 12 days earlier but there was no evidence of a brake assessment. Another trailer had been issued an immediate prohibition in March 2024 for a defective tyre.
This prompted an announced DVSA maintenance investigation visit on 10 June 2024 by Vehicle Examiner (VE) Paul Matthews. The subsequent report was marked as unsatisfactory and found widespread shortcomings with maintenance records and the absence of documented compliance systems. The VE also drew attention to the operator’s very poor MoT failure rates.
The VE considered the evidence called into question if Mr Tsonchev was exercising effective control as transport manager and highlighted the absence of evidence of continuing professional development such as attendance at a CPC refresher course.
The operator provided a response to the DVSA report with some additional evidence of procedures that was not made available during the initial visit. Mr Tsonchev insisted all vehicles were checked immediately before MoT and suggested the failure rate was attributable to inexperienced testers. Mr Tsonchev disputed that the trailer issued with a prohibition in March 2024 had a defective tyre and he also insisted the trailer issued with a prohibition in May 2024 had been the subject of a brake assessment at its previous PMI.
As a result of the concerns set out above, this public inquiry was called to consider if regulatory action was required in relation to the operator and Mr Tsonchev as transport manager.
The operator and TM Tsonchev had not previously been called to a public inquiry. Revocation of the licence was previously proposed in 2021 after the operator initially failed to fulfil a finance undertaking. The process was subsequently set aside after the operator belatedly complied.
The Call to Public Inquiry
The operator was called up to public inquiry by letter dated 16 October 2024.
The call up letter gave notice that the grounds for regulatory action in Sections 26(1)(c), 26(1)(b), 26(1)(c)(iii), 26(1)(e), 26(1)(f) and 26(1)(h) of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”) were to be considered as well as the statutory requirements to be of good repute, hold professional competence and to have financial standing. The letter also gave notice that the provisions for disqualification in Section 28 of the Act would be considered.
Mr Tsonchev was called up in his capacity as TM by letter also dated 16 October 2024 that gave notice of consideration of the requirement of good repute and professional competence in Schedule 3 of the Act.
A further letter was sent to Mr Tsonchev on 14 November 2024 giving notice of the intention to examine the validity of his CPC qualification.
The operator was further put on notice by an e-mail dated 18 November 2024 that I wished to examine how it was engaging its drivers. This followed the operator’s submission of bank statement to show financial standing. Although that requirement was met, there were entries suggesting some drivers were engaged on a self-employed basis and paid through service companies. This raised the concern that the operator was not following the guidance issued by HMRC and the Senior Traffic Commissioner.
The Public Inquiry
The Public Inquiry was heard at Birmingham on 26 November 2024. Mr Tsonchev appeared as the director and TM. He was supported by Ms Videlina Angelchovska, an administrator for the operator. Mr Tsonchev did not request an interpreter before the hearing, and I was satisfied he was sufficiently fluent in English to follow the proceedings and give his evidence without assistance.
The operator complied with the direction to provide evidence of vehicle maintenance to the DVSA ahead of the hearing.
VE Matthews subsequently provided an updated report on this more recent evidence. Whilst there was some evidence the operator had been proactive addressing some issues the maintenance inspection records were still unsatisfactory with basic details missing such as the name of the provider and certificates of roadworthiness signed several days after the inspection. Evidence of brake testing was also sparse with either road tests or metered tests recorded, often not coinciding with the PMI date. There was no evidence of roller brake tests.
Mr Tsonchev confirmed that he had lived with his family in The United Kingdom for nearly 25 years. He had been working as a carpet fitter in Birmingham for 11 years up to 2017. When that work dried up, he decided to start a haulage company.
Mr Tsonchev said he returned to Bulgaria for brief visits 2 or 3 times a year. He visited Bulgaria for 2 months in the summer of 2017 for a holiday/social break. He decided to take that opportunity to sit the CPC examination in Bulgaria. Mr Tsonchev accepted he was normally resident in The United Kingdom at the time.
Mr Tsonchev accepted he had been put on notice that his professional competence would be considered at the hearing, but he had given no thought in advance on how he would find a new transport manager if he was removed from the post. Mr Tsonchev asked if he could be granted time to address the position, but he was unable to provide me with any clear indication of how he would go about finding a new transport manager if a period of grace was granted.
It was confirmed that only one of the operator’s five regular drivers was employed. The other four were paid through service companies as this was their preference. Mr Tsonchev said he believed that was acceptable practice as he was under the IR35 threshold. He said he was unaware of HMRC’s policy stance that drivers should normally be employed unless they are supplying their own vehicle. Mr Tsonchev also claimed to be unaware of similar guidance issued by the Senior Traffic Commissioner.
Mr Tsonchev said he would try to persuade the drivers to accept terms of employment, and he offered an undertaking to make that arrangement within 3 months. However, I was not convinced that he accepted the necessity of doing this or that he offered the undertaking with any confidence it would be fulfilled.
Mr Tsonchev accepted that he had not undertaken any training on operator licence compliance in the 7 years since his CPC examination in Bulgaria in 2017. He described that as a “mistake”. Mr Tsonchev produced evidence he has attended a two-day CPC refresher course in October 2024 but accepted that was only after he received the call up letter to the public inquiry which included a suggestion that he attended such a course. Mr Tsonchev said he had thought previously about attending a course but had not taken any action until the call to public inquiry. Mr Tsonchev said he sought to keep updated by reading email updates from the traffic commissioners, but he offered little tangible evidence of any learning taken from such matters.
Mr Tsonchev gave a troubling confusing picture of the operator’s current maintenance arrangements. The new maintenance provider does not have its own premises. It visits the operator’s premises and undertakes inspections in the uncovered yard. Mr Tsonchev said there was some form of pit in the yard that could be used for underbody inspections. I was told that roller brake testing was taking place at least 4 times a year but this included annual test. The tests are carried out by various other providers depending on their availability. Mr Tsonchev was aware that DVSA guidance from next year will require testing at every PMI. However, it is clear that he is unable to consistently arrange for current roller brake tests to be carried out in proximity to the PMI inspections. Mr Tsonchev produced a brake test print out for one vehicle and trailer to seek to contest VE Jones’ finding that the vehicle had not been tested. The print out revealed that neither the vehicle nor trailer had been sufficiently loaded for an effective test. Mr Tsonchev was unaware of the endorsement on the printout until I pointed it out and clearly did not understand the significance of the loading issue for the validity of the test. An undertaking was offered for laden roller brake tests at every PMI in future but again I had no confidence that Mr Tsonchev would be able to fulfil that assurance.
In relation to the very poor MoT rate, Mr Tsonchev said he believed this was because the operator was arranging for pre-test inspections to be carried out too early. He said he had now agreed a revised process whereby the vehicles were checked 10 days before the test. He conceded the vehicles were then returned to use in the period before the test.
Other than the attendance at the CPC refresher course, I asked Mr Tsonchev would other steps he had taken to improve compliance since the DVSA visit. He told me that he had introduced gatehouse checks and had trained drivers on walk around checks and VE Jones had seen some evidence of this. Mr Tsonchev volunteered that he had made these changes not as a result of the DVSA visit but because one of his trailers had been issued with a further prohibition for a defective tyre subsequent to the DVSA visit.
I was told that Mr Tsonchev had sought guidance from transport consultants, bit on further inquiry it is clear that he only first approached them after being called to the public inquiry. The consultants are yet to undertake any work with Mr Tsonchev.
I invited Mr Tsonchev to comment on why he could be trusted in future to be compliant and what the consequences would be of the various potential forms of regulatory action. Mr Tsonchev said he wanted to save his company and do things the right way but regrettably there was little in the way of detailed or specific assurances. Mr Tsonchev said that even a brief suspension would have a negative effect on the operator’s finances. Revocation of the licence would have a significant effect as the business is the sole form of income for Mr Tsonchev and his family.
Findings of Fact
I find that Mr Tsonchev is not professionally competent. He did not seek to dispute the fact that at the time he took the CPC examination in Bulgaria in August 2017, he was normally resident in the United Kingdom and had been for many years.
Article 8(2) of Regulation (EC) No 1071/2009 clearly provides that a transport manager, “must sit the examination in the United Kingdom if this is where they have their normal residence when working…‘Normal residence’ shall mean the place where a person usually lives, that is for at least 185 days in each calendar year, because of personal ties which show close links between that person and the place where he is living”.
Mr Tsonchev’s residency and working location at the time that he sat the examination was in the United Kingdom. His Bulgarian qualification is therefore not valid, and he is not professionally competent.
The operator did not challenge the evidence of Vehicle Examiner Jones. On that basis I am satisfied that the findings of the DVSA investigation, coupled with the observations on the more recent documents supplied by the operator, establish the following grounds for regulatory action:
• The operator’s vehicles have been issued with at least three prohibitions in the last 12 months alone. This satisfies the grounds for regulatory action in Section 26(1)(c)(iii) of the Act.
• The operator has not fulfilled the statements it made on applying for the licence that its vehicles would be inspected at the 6-week intervals and that inspections would be carried out by Truck Aid UK. This satisfies the grounds for regulatory action in Section 26(1)(e) of the Act.
• The operator has not honoured the undertakings it signed up to when it applied for the licence, namely,
i. that its vehicles and trailers would be kept fit and serviceable;
ii. that it would keep records for 15 months of driver defect reports, safety inspections and routine maintenance and make them available on request;
iii. that drivers would report promptly any defects or symptoms of defects that could prevent the safe operation of vehicles and trailers, and that any defects would be promptly recorded in writing;
This satisfies the grounds for regulatory action in Section 26(1)(f) of the Act.
The decision made in relation to the validity of Mr Tsonchev’s CPC qualification means that the operator no longer meets the requirement of professional competence and the grounds for mandatory revocation in Section 27(1)(b) of the Act.
I refuse the application for a period of grace. I have considered the test as set out by the Upper Tribunal in 2014/008 Duncan McKee. The Upper Tribunal made it clear that, “Traffic Commissioners will need some tangible evidence, beyond mere hope and aspiration, that granting a period of grace will be worthwhile, and that there are reasonable prospects for a good outcome.” Mr Tsonchev provided me with no such tangible evidence today, despite being aware that the hearing might result in his being unable to continue as transport manager.
Determination
Whilst the lack of professional competence, establishes the ground mandatory revocation, I have nevertheless considered what decision I would have reached in relation to other regulatory findings above.
Having reached the findings of fact recorded above, I have considered the balancing exercise and have considered the positive and negative features by reference to the guidance in the Senior Traffic Commissioner’s Statutory Document Number 10.
I identify as positive features the fact that the Operator co-operated with enforcement investigation and has made some changes to improve compliance, albeit these fall far short of addressing all the issues identified by the DVSA.
On the other hand, I identify the following negative features:
• The engagement of self-employed drivers has led to an unfair commercial advantage.
• There are a substantial number of previous prohibitions.
• There has clearly been ineffective management control and insufficient systems and procedures in place to prevent operator licence compliance failings.
• Insufficient and ineffective changes have been made to ensure future compliance.
• An “S” marked prohibition has been issued for a road safety critical defect.
• There is a low average first time pass rate at MOT and multiple failure items at MOT.
The negative features far outweigh any positive aspects and place the case firmly in the category of “serious to severe” for the suggested starting point in Statutory Document 10.
I have gone on to consider the questions set out by the Upper Tribunal in Priority Freight 2009/225 and Bryan Haulage (No.2) 217/2002 before determining the level of regulatory action.
The Priority Freight question requires me to ask if I can have confidence that the operator can be trusted to be compliant in future. In considering this question, I have considered the guidance offered by 2013/082 Arnold Transport Ltd where the Upper Tribunal considered the differing classes of operators appearing at public inquiry and commented, “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”. This operator and Mr Tsonchev fall squarely into that fourth category in my view. This is exemplified by the fact that the only real step that Mr Tsonchev had taken to prepare for the public inquiry was to attend the CPC refresher course suggested to him in the call up letter. He has completely failed to use his own initiative to take any other steps that may have reassured me that I could trust him in future. I answer the Priority Freight question in the negative.
I have then considered the Bryan Haulage question of whether the operator deserves to be put out of business. This question must be viewed in the context that a mandatory ground for revocation is made out. However, I would have confirmed the revocation of the licence on the Section 26 grounds alone. In determining the proportionality of that decision, I have taken account of the seriousness of the previous shortcomings in compliance and the lack of evidence that those shortcomings have been understood and addressed.
I therefore confirm my decision that the licence should be revoked. I will allow a period of 4 weeks for the orderly winding down of the operation.
If I had not made the finding in relation to Mr Tsonchev’s professional competence, it is likely that I would have found his good repute as transport manager lost and a disqualification for the minimum of 12 months would have inevitably followed. I am mindful that the effect of the decision on professional competence is that Mr Tsonchev will have to pass a CPC examination in the United Kingdom if he wishes to act as transport manager in future. Had Mr Tsonchev lost his repute, I would have considered that to be an appropriate rehabilitative measure. For that reason, I do not consider it is necessary in this case to take further action in relation to Mr Tsonchev as sufficient safeguards are already in place to prevent his reappointment as transport manager until he can demonstrate his competence to undertake that role again.
Similarly, I refrain from making an order disqualifying the operator or Mr Tsonchev as a director from holding an operator’s licence in future. Before any new application could be made, a suitable transport manager would have to be identified and that would go some way to answering my concerns about Mr Tsonchev. Alternatively, if Mr Tsonchev succeeds in attaining a UK CPC qualification, he could put himself forward as transport manager again (bearing in mind the comments made above about rehabilitation). I consider the action already taken is sufficient to ensure that the operator and Mr Tsonchev do not seek to re-enter the industry until they are able to demonstrate they can do so compliantly.
Gerallt Evans
Deputy Traffic Commissioner
26 November 2024