Decision

Decision for RMG Grab Hire Limited (OM2059354)

Published 15 February 2023

0.1 In the Scottish Traffic Area

1. Written Confirmation of Oral Decision of the Traffic Commissioner

1.1 RMG Grab Hire Limited (OM2059354)

2. Evidence

I heard evidence from Mr McGovern, the sole director of the operator company and from Mr Gorman, the proposed transport manager. Mr McGovern had lodged some documentation, including financial information, in advance of the inquiry.

Mr McGovern also lodged documentation after the inquiry in support of his position that he still paid insurance for a vehicle no longer in his possession. I had regard to all of that evidence.

Mr McGovern told me that he had been in business previously with Mr Ross Thomson, in a company called R&R Grab Hire. They had applied for an operator’s licence but there had been a falling out when Mr McGovern found out that Mr Thomson had started a new company of his own. The application was withdrawn. Mr McGovern advised that Mr Thomson had been opposed to the inclusion of his digger hire in the business, but he did not understand why.

When Mr Thomson left, Mr McGovern changed the name of the company to RMG Grab Hire. He currently hired out two mini diggers but wished to continue with his original plan to diversify into grab hire. When asked if he had a vehicle, Mr McGovern told me that he did not, but the plan was to obtain one on finance when his licence was granted.

I heard Mr McGovern’s evidence in relation to finance in private session. The bank statements showed payments [REDACTED].

When asked what these related to, Mr McGovern could not tell me. He first sought to explain by saying he was very tired and hadn’t slept the previous evening. He then told me he had forgotten, despite having given evidence that he was not in possession of a vehicle earlier, that he had actually had a vehicle before. The payments related to that.

Mr McGovern told me that the vehicle had suffered a catastrophic electrical fault and was written off as a total loss. He had to continue paying the insurance for it as that was a term of the contract. He lodged insurance documents after the inquiry with an email from his insurance broker purporting to show that he was required to pay the remaineder of the annual premium because there had been a total loss claim.

Those documents disclosed that the policy in relation in the vehicle started on 24 October 2022 – just three months before the inquiry. Mr McGovern did not seek to explain why a goods vehicle was apparently being operated by him without an operator’s licence or how he could have ‘forgotten’ that he had had a vehicle in his possession.

I noted there was very little in the way of digger hire activity showing on the statements lodged for inquiry, unlike in the bank statements which had been lodged with the application. Mr McGovern told me it had been quiet given the time of year. By contrast, the statements lodged with the application showed high numbers of payments for digger hire, however, all of them were round figures. There was no evidence before to me to show that the operator company was meeting its tax or other liabilities, out with insurance for a vehicle that it was not entitled to operate for hire or reward.

When we resumed in open session, Mr Gorman told me that initially he was going to be the TM for R&R Grab Hire. However, after the fall out between Mr McGovern and Mr Thomson, he had suggested that the application should be withdrawn. He had tried to stay out of it but had agreed to remain as TM for Mr McGovern on this application. There was evidence before me in the brief of papers as to how Mr Gorman intended to manage the systems for ensuring drivers hours etc on the licence.

Mr Gorman was on notice that I had concerns about his nomination on licences and his name being removed after the application had been submitted. At one point, as a result of that, he was nominated on 4 licences as an external TM alongside his full time employment.

Mr Gorman’s evidence became confused around how he had come to be nominated on the West Grab Licence (which was the company set up by Mr Thomson after the fall out with Mr McGovern) and around whether he had removed himself from that and another licence in October 2022. His evidence, confused as it was, also appeared to conflict with that which he had submitted in an email which he had sent to my Leeds office on 14 October 2022.

In addition, he could not offer a satisfactory explanation as to explain why he remained nominated on a licence (Johnstone Transport Ltd OM2043482) which he knew was not in use and in relation to which he was not undertaking any meaningful transport manager duties. When pressed to explain the inconsistencies in his evidence, he vacillated and became belligerent in his manner.

3. Reasons

Mr McGovern, is the sole director of the applicant company and therefore his actions can be equated with it. I found both him, and Mr Gorman on this occasion, to be unimpressive and unconvincing witnesses.

Of significant concern was the fact that Mr McGovern could not tell me, when directed to a bank statement which he had lodged only days before, what several large transactions related to. I also found his evidence that he ‘forgot’ that he had previously had a vehicle to be entirely incredible, particularly when the insurance documents lodged showed that the vehicle had been first insured for use on 24 October 2022, only a few months before the inquiry.

There was insufficient evidence before me to support a finding that Mr McGovern was using that vehicle unlawfully, without an operator’s licence. However, what was clear from his evidence, was that he had not intended to disclose that he had previously had a vehicle in his possession. In addition, it was obvious from his reaction when asked about the bank statements that he knew little about the financial transactions of a business which claimed he was solely responsible for.

Similarly, I was unimpressed by the confused, contradictory nature of Mr Gorman’s evidence and the manner in which he conducted himself at inquiry. Mr Gorman is quick to tell me on every application he is nominated on that he requires to retain his repute for his full time employment. He obviously fails to realise that the veracity of information which he provides to my office, and his behaviour when he is called to inquiry, have a potential bearing upon that repute.

I make no formal finding in relation to Mr Gorman’s repute on this occasion, but he is on notice of my concerns as to his behaviour at inquiry, his history of early nomination on licence applications only to later be removed, and the fact that he appears to be content to act as TM in name only for licence holders who are not operating (see the Senior Traffic Commissioner’s Statutory Document No.3, at paragraph 56).

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 implausibility and unreliable nature of Mr McGovern’s evidence, coupled with the fact that he appeared to know so little about his own business, leads me to conclude that I would not be able to trust him to comply with the operator licensing regime. If I cannot trust him, I cannot find him, or his company, 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 McGovern 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. A formal finding in terms of Section 13A(2)(b) of the 1995 Act that the applicant does not have repute, is made out.

Mr McGovern also told me that he did not currently have a vehicle in possession. The plan, he said, was to get one on finance when the licence was granted. However, he produced no evidence to persuade me as to the likelihood of that happening – no application for finance, for example, or other documentation to show that the procurement of a vehicle was imminent, or indeed able to be financed should credit not be made available. It was also clear that the company still had liabilities to meet in relation to the vehicle it had had in October 2022.

For those reasons, I am also not persuaded that the applicant would satisfy, on the issuing of an operator’s licence, the requirements of effective and stable establishment in terms of section 13A(2)(a) and Paragraph A1(2)(b) and (c) of the 1995 Act.

Claire M Gilmore

Traffic Commissioner for Scotland

5 February 2023