Decision

Decision for PHR Grab Hire Ltd (OM2053882)

Published 16 May 2023

0.1 In the Scottish Traffic Area

1. Decision of the Traffic Commissioner

1.1 OM2053882 PHR Grab Hire Ltd

2. BACKGROUND AND PRELIMINARY ISSUES

An inquiry was fixed to consider the application company’s application for a standard international licence. An interim licence authorising the use of two vehicles had been in force since 25 April 2022. I was advised that the company now only required authorisation for one vehicle and intended to make an application to change its operating centre if the licence were granted.

Police Scotland had lodged an objection to the application, on the grounds of operator repute, but had not provided any evidence in support of that objection.

It became apparent during the inquiry that the call up letter contained errors, in that it referred to statutory requirements for a restricted, rather than a standard national (or international) licence. However, it was clear from the rest of the papers including the documentation and submissions lodged for the inquiry that parties understood that it was the requirements for a standard national/international licence were under consideration.

Mr Anderson confirmed that no issue was taken in relation to the error in the call up letter. He also confirmed that the application was intended to be for a standard national, rather than a standard international licence. I noted Mr McNaught’s CPC only qualified him for standard national operations.

Documentation in support of the application, including copies of original or authenticated bank statements, had been called for and required to be lodged at least seven days in advance of the inquiry. Mr Anderson explained that there had been some administrative delays in preparing the documentation, resulting in the late lodging of it on the evening of the last working day before the inquiry. He confirmed, however, that the documentation had not been provided to him by the operator until after the deadline for lodging had passed.

A document headed ‘Commercial lease agreement’ which purported to relate to the lease of the operator’s operating centre was lodged in the course of the inquiry. I considered all of the evidence before me in reaching my decision.

3. EVIDENCE

Mr Anderson appeared on behalf of the operator company and Mr McNaught as sole director and proposed TM. I heard evidence from Mr McNaught and from Ms Orr who referred to herself as office administrator.

[REDACTED]

There was also information in the brief pertaining to a BBC documentary, the subject of which was alleged waste crime involving the site at Rannoch Road where the applicant’s operating centre was located. Mr McNaught’s uncle, Eric Morrison snr, (who owns the site) had been implicated in wrongdoing as regards the illegal disposal of waste. Eric Morrison snr had been filmed in the documentary wearing clothing bearing a ‘PHR services’ logo and that logo had also been seen elsewhere on site. There were several documents contained in the brief and lodged for the inquiry - including email correspondence about the PHR Grab Hire application and a copy of the company’s headed notepaper – which bore Eric Morrison’s name.

Mr McNaught told me that he was the sole director of the applicant company. He had started the business and he drove the grab hire lorry day to day. They did utilities work, sub contracted from Glenevin Construction Ltd. The work was mostly carried out around the Glasgow area. He paid rent of [REDACTED] to his aunt and uncle for the operating centre, which gave him space to park and a pit.

When asked about his involvement with Eric Morrison snr and jnr, Mr McNaught claimed at first loose connection and estrangement, later admitting to recent closer relations. He eventually told me that he was supporting his aunt and uncle financially and that the purported invoices for ‘rent’ which were lodged for the inquiry amounted in part to financial support for them. He told me that he had been supporting them financially since his cousin had been sent to prison. Mr McNaught accepted that the invoices he had produced were not, therefore, all that they purported to be.

Mr McNaught also admitted that his declaration on the application form that maintenance would be carried out ‘in house’ was not true. The maintenance work had all been done by Eric Morrison snr from the outset, rather than in house by the operator. Mr McNaught claimed that he just hadn’t thought about it. He was also unable to explain why a payment of invoice, purportedly issued by Eric Morrison snr for maintenance work on the operator’s vehicles, had been made several days before the invoice had actually been issued.

Mr McNaught told me that he did carry out some vehicle inspections, but it became clear he was referring to daily driver walkround checks rather than periodic maintenance inspections. He accepted that, as transport manager, he should have known the difference.

Mr McNaught could not tell me why Eric Morrison snr’s email and name was on PHR Grab Hire Ltd correspondence. Ms Orr was the administrator and she would probably know.

It was put to Mr McNaught that: the vehicles which had been specified on his licence belonged to Eric Morrison snr; the operating centre was owned by Eric Morrison snr; he was paying significant sums to Eric Morrison snr for the use of the operating centre; Eric Morrison snr carried out, and was paid for, the inspections on the vehicles; and most of the correspondence before me relating to the business had Eric Morrison’s contact details on it. Standing that, it may appear that PHR Grab Hire was indeed Eric Morrison’s business or, at the very least, he was heavily involved in it? Mr McNaught denied that Eric Morrison snr had any involvement in running his business. He conceded, however, that it may look that way considering the evidence.

Ms Orr described herself as the office administrator. Mr McNaught was her cousin, Eric Morrison snr was her father and Eric Morrison junior was her brother. Ms Orr’s evidence was that her father was not involved in PHR Grab Hire Ltd. He was too old for that now and didn’t do much at all. She did do administrative work for him, but it was unclear given her earlier evidence what that work consisted of.

When asked why the correspondence in relation to the licence came from Mr Morrison’s email address, her evidence was that it was all sent by her. She did all the admin for PHR Grab Hire Ltd and Mr McNaught drove the lorry. Admin wasn’t his thing. Mr Morrison was too old for email and didn’t use it.

Mr Orr’s evidence became considerably confused when it was put to her that there were also emails in the chain contained in the brief which purported to be sent by Mr McNaught. She said he must have been standing with her when she sent them. She told me that she must have put the wrong date on the post-dated invoice. That was why the payment had apparently been made before it was issued.

Ms Orr said that she must have left Eric Morrison’s mobile phone number on the PHR Grab Hire headed notepaper by mistake when she amended it from the PHR services template notepaper. I noted that she had the foresight, nevertheless, to add the new company number and other identifiers to the template. Whilst she had described herself as office administrator at the outset of the inquiry, she told me she was really just a home carer and had made some mistakes.

Ms Orr advised that there had been a lot of family discord since her brother had been imprisoned. They had not expected there to be a problem with Eric Morrison snr being connected to the business until the concerns in the brief were put to them.

4. REASONS

I was not prepared to accept copy unauthenticated statements and financial vouching as evidence, when authenticated copies had specifically been called for in the call up letter for the inquiry. However, even if I had been prepared to accept the evidence submitted, I noted that finance was not met even for one vehicle when calculated in accordance with the directions set out in the Senior Traffic Commissioner’s statutory document No.2. A formal finding in terms of section 13A(2)(c) that the operator does not have appropriate financial standing is, therefore, made out.

Given that an interim licence was in force, there was also a failure to meet the continuing requirement to be of appropriate financial standing. That is matter of significant concern where an applicant has been trusted to operate on an interim basis for a considerable period of time.

Mr McNaught is the sole director of the applicant company and therefore his actions can be equated with it. I found both him, and Ms Orr, to be unimpressive and unconvincing witnesses.

Mr McNaught told me at first that PHR Grab Hire was his business, that he had started it afresh. Later, after it was put to him that Eric Morrison snr had been seen in the BCC documentary wearing clothing bearing the logo ‘PHR Services’, he said that his uncle had PHR services as a business and that he had just taken the name. His evidence on this point, like most others, was inconsistent and contradictory. I was unable to determine from it what work ‘PHR services’ had been undertaking.

He told me at first that he paid [REDACTED] in rent to his uncle and aunt for the operating centre and explained he had a space and pit in the 12 acre yard for that. The invoices produced purported to show ‘rental’ payments of [REDACTED]. Mr McNaught’s evidence changed when the frequency of the invoicing was put to him, but it was clear that he was unaware of exactly what payments were being made and when.

Mr McNaught eventually claimed that the rental payment was artificially inflated so as to provide an income for his aunt and uncle while his cousin was in prison. He said he had been given professional advice to do it that way but accepted that the documentation that he had produced for the inquiry was, ultimately, misleading.

Mr McNaught produced a document headed ‘commercial lease agreement’ allegedly signed by him and his uncle, dated 8/4/22. However, having regard to Mr McNaught’s evidence re the artificially inflated ‘rental’ and the other evidence of Eric Morrison’s involvement with PHR Grab Hire limited which were before me, I find on balance that there was never any genuine rental agreement for the use of the operating centre. I consider it most likely to have been part of the arrangements for transferring money to Eric Morrison snr from the PHR Grab Hire business.

I found Ms Orr’s evidence to be wholly incredible. She was adamant that her father had no connection with the business. When she was asked about the many and varied examples of his involvement contained within the documentary evidence before me she claimed to have made mistakes herself, then pleaded ignorance making reference to her lack of administrative experience. I found that I was unable to rely on anything she said.

I am not in a position to make any adverse findings in relation to Eric Morrison snr in the course of this inquiry. There was no evidence before me of him having suffered any adverse consequences as a result of the waste crime allegations which had been made. I also attach little weight to the police objection on the basis of this operator’s repute given the lack of supporting evidence.

Nevertheless, I find on the basis of the evidence before me that PHR Grab Hire Ltd was most likely being operated by, and for the benefit of, Eric Morrison snr. His email address was used to correspond with my office: his mobile telephone number was on the headed paper used by the company; he owned the company’s vehicles; he carried out the maintenance; he owned the operating centre; and he was regularly receiving considerable sums of money from the business, under the auspices of various purported arrangements.

It was Eric Morrison snr’s daughter and nephew, who clearly had close family ties with him, who claimed to be operating the business for themselves. However, neither was knowledgeable on key facts pertaining to the operation of the business. I did not consider it a coincidence that PHR Grab Hire Ltd was incorporated in February 2022, just a few weeks after the BBC documentary featuring Eric Morrison snr was aired.

Mr McNaught and Ms Orr repeatedly asserted that Eric Morrison snr had no involvement in the operation of PHR Grab Hire Ltd. Those assertions, when weighed against the overwhelming volume of evidence before me to the contrary, are simply incredible.

Trust lies at the very heart of my jurisdiction. In NT/2013/82 Arnold Transport & Sons Ltd v DOENI the Upper Tribunal said:

“The Tribunal has stated on many occasions that operator’s licensing is based on trust. Since it is impossible to police every operator and every vehicle at all times the Department in Northern Ireland, (and 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… It is important that operators understand that if their actions cast doubt on whether they can be trusted to comply with the regulatory regime they are likely to be called to a Public Inquiry at which their fitness to hold an operator’s licence will be called into question. It will become clear, in due course, that fitness to hold an operator’s licence is an essential element of good repute.”

The implausible and unreliable nature of Mr McNaught’s evidence (as director) and that of Ms Orr who claimed to be closely involved in the business, coupled with the lodging of misleading and unreliable documentation in support of the application, leads me to conclude that I would not be able to trust this operator to comply with the operator licensing regime.

In addition, the operator has failed to maintain appropriate financial standing during a period in which it was permitted to operate ad interim. The late provision of documents directed to be produced for the inquiry in this case is also an indicator of poor attitude on the part of the operator. If I cannot trust this operator, I cannot find it to have repute.

It is for an applicant to satisfy me that it meets the statutory requirements for the licence he is applying for. Mr McNaught has failed to do so. In Aspey Trucks Ltd 2010/49 the Upper Tribunal set out the role of the Traffic Commissioner in considering an application. They said:

“In a case such as this, the Deputy Traffic Commissioner was not looking at putting someone out of business. Rather, he was deciding whether or not to give his official seal of approval to a person seeking to join an industry where those licensed to operate on a Standard National or Standard International basis must, by virtue of S.13(3), prove upon entry to it that they are of good repute. In this respect, Traffic Commissioners are the gatekeepers to the industry – and the public, other operators, and customers and competitors alike, all expect that those permitted to join the industry will not blemish or undermine its good name, or abuse the privileges that it bestows. What does “Repute” mean if it does not refer to the reasonable opinions of other properly interested right-thinking people, be they members of the public or law-abiding participants in the industry”

Given my findings in this case, I cannot give this applicant my official seal of approval. Formal findings in terms of Section 13A(2)(b) and (c) of the 1995 Act are made out. The application is refused.

I direct that my decision shall take effect 30 days from the date that the operator receives it to allow for appeal. An interim licence remains in force. In the absence of any further procedure, the interim licence will terminate on the date on which my decision comes into force in accordance with section 24(6) of the 1995 Act.

Claire M Gilmore

Traffic Commissioner for Scotland

3 March 2023