Decision

Decision for Zaman Ali and Arshad Begum t/a HRA Builders Merchants – OD1137765 & HRA Builder Merchants Ltd – OD2041884

Published 14 September 2021

0.1 IN THE WEST MIDLAND TRAFFIC AREA

1. DECISIONS OF A DEPUTY TRAFFIC COMMISSIONER

Zaman Ali and Arshad Begum t/a HRA Builders Merchants – OD1137765

&

HRA Builder Merchants Ltd – OD2041884

The Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”)

Decisions made in respect of an operator’s licence held by Zaman Ali and Arshad Begum t/a HRA Builder Merchants

1. Adverse findings are made under sections 26(1)(c)(iii); 26(1)(ca);26 (1) (e); and 26(1)(f); of the 1995 Act.

2. The operator no longer satisfies the requirement to have sufficient financial resources, section 26(1)(h) of the 1995 Act.

3. The operator no longer satisfies the requirement to be fit to hold an operator’s licence, section 26(1)(h) of the Act.

4. The operator’s licence is revoked with immediate effect

Decisions made in respect of an application for a restricted operator’s licence by HRA Builder Merchants Ltd OD2041884 5. The applicant has failed to satisfy me that it is fit to hold an operator’s licence.

1. The application for a restricted operator’s licence is refused.

2. I record notes to accompany this decision whereby I would recommend that a TC consider the grant a standard national licence subject to specific undertakings.

2. Attendance at public inquiry

In attendance were

• Ansar Ali, director of HRA Builder Merchants Ltd and son of both Zaman Ali and Arshad Begum

• Chris Powell solicitor of Rothera solicitors – representing the applicant limited company (which at the time of the PI had 3 directors) but not representing the existing partnership licence.

• Thomas Reddy, consultant advising applicant.

3. Non-attendance

The following did not attend the public inquiry:

• Zaman Ali, partner on partnership licence and currently one of 3 directors on the applicant limited company licence. Note this individual has provided a written statement confirming a willingness to resign as a director of the applicant limited company licence if requested by me. I do so request.

• Arshad Begum, partner on partnership licence and currently one of 3 directors on the applicant limited company licence. Note this individual has provided a written statement confirming a willingness to resign as a director of the applicant limited company licence if requested by me. I do so request.

4. Background

The public inquiry involves what is effectively an application to change entity from a partnership to a limited company licence. The existing restricted licence for the partnership Zaman Ali and Arshad Begum t/a HRA Builder Merchants includes Zaman Ali who has a poor history of operator licensing. The brief for the hearing includes my making a decision in 2013 which indicated that if there was to be a new application from anyone involved in the 2013 public inquiry, I would wish to be satisfied as to a number of listed features. One read as follows: “arrangement are made to ensure an element of audit of any future operation, if necessary by a competent transport consultant. This would include both maintenance and record issues – and additionally – compliance with drivers’ hours and records including the Working Time Directive.” Another read “Arrangements are to be made to ensure full compliance with operator licensing”.

A DVSA investigation revealed very significant issues. The application for a licence by the limited company includes correspondence on its behalf by a consultant that refers to significant failings. One sentence reads as follows: “a vast amount of work is involved in bring the licence of Zaman Ali and Arshad Begum up to a satisfactory level of compliance, with a lot to be achieved.”

5. Evidence

Before preparing this written decision, I have reviewed the following:

• Written public inquiry brief for Zaman Ali and Arshad Begum OD1137765;

• Written public inquiry brief for the application for an operator’s licence by HRA Builder Merchants Ltd OD2041884

• Statements from both Zaman Ali and Arshad Begum confirming that they will resign as directors of the applicant limited company licence if that is sought by me.

• Contemporaneous handwritten notes from the hearing;

• Evidence and representations given to me during the hearing;

• South Bucks District Council and another v Porter (FC) (2004) UKHL 33 in relation to written decisions generally; and,

• Aside from those quoted below, various authorities in relation to the approach to regulation, fitness, proportionality, entities and the burden of proof. – Thomas Muir (Haulage) Ltd v Secretary of State for the Environment, Transport and Regions (1999) SLT 666; Crompton trading as David Crompton Haulage v Department of Transport, North Western Area (2003) EWCA Civ 64; Muck It Ltd and others v Secretary of State for Transport (2005) EWCA Civ 1124; 2009/225 Priority Freight Ltd and Paul Williams; Fenlon 2006/277; Skip It (Kent) Limited 2010/277; and, 2002/217 Bryan Haulage (No. 2).

The DVSA investigation revealed very significant operator licensing failings, this was not contradicted. Indeed the failings were corroborated by reports from a consultant, Thomas Reddy who provided full and frank descriptions of the work required prior to the family business being compliant.

I have not itemised the numerous failings in this brief decision as they are not contradicted and are accepted. Moreover in the event of any appeal they would be available to be seen by the adjudicating Upper Tribunal. The fact that father and mother didn’t bother to attend the hearing is clearly an acceptance of failure to run a compliant operator’s licence.

Father and mother who held the partnership licence had left transport to be run by their son without any guidance or training. On my asking son about the business it transpires that the target client base for this builders merchant is households and not other businesses. Some pay when goods are delivered, others pay in advance of delivery. It is evident that it is likely that a standard national licence is required in any event, although I accept that there is a theoretical argument as to when title in goods passes.

I am told that the partnership business has effectively ceased operating and on Ansar Ali receiving the DVSA report of failings he immediately brought in the consultant who was present at the inquiry. Later he discovered that the applicant limited company did not have authority to operate vehicles and so they have been parked up – I was given evidence of this.

6. Findings of fact and material considerations

Evidence from the DVSA examiners on file has not been contradicted and I accept it as correct in its entirety.

It is clear that all the grounds set out in the call in letter for the partnership are made out.

Dealing with the most significant issue, namely operator repute, I take into account both the significant failings identified – and additionally – the fact that Zaman Ali was given clear unequivocal advice in 2013 from me to ensure future compliance. He did not take that advice and I have no sympathy with him.

Failure of the two partners to attend support my findings, they have not attempted to justify their failings. I regard the failings in the partnership licence as very significant and they justify loss of fitness to hold and loss, and in turn, revocation of the licence.

I do not trust either of the two partners. There is a plethora of case law referring to operator licensing being based on trust. The one real positive feature is that the partners have not sought to contradict the damning DVSA evidence, but that is not surprising as they would have difficulty in doing so. More positive is that they are willing to stand down as directors of the applicant company and not have any role in the business. They would remain shareholders but that is not necessarily an issue for me.

Dealing with the partnership licence, I ask myself the Priority Freight question and answer in the negative. When I ask the Bryan Haulage question, I answer in the affirmative and the business merits closure.

The statements from the two partners who are also directors of the applicant company constitute tacit acceptance that I am unlikely to find fit (or of good repute) an entity holding or seeking to hold an operator’s licence where they are involved. Whilst Arshad Begum has only had a purely passive role in the failings perpetrated by her husband, a licence was in her name too and she cannot escape responsibility.

I am of the view that a competent transport manager with continuous and effective management of transport could and should be sufficient to ensure compliance.

7. Other

I made it clear that if there is a new licence application for a standard national licence by the limited company that I would recommend an interim licence is granted, but only if the following applies:

• A valid application is made out and the necessary fees are paid

• Both Zaman Ali and Arshad Begum resign as directors

• There is a valid advertisement

• Finances are in place (this should not be a difficulty as I have seen substantial sums in the company’s account)

• There is a competent transport manager appointed on at least the minimum number of hours recommended by the STC. That individual will be paid at a good competitive rate.

• Assuming he is not the nominated transport manager (TM), the consultant will be utilised for a number of months to assist the new TM in ensuring compliance. Note that it is possible that Thomas Reddy will be the nominated TM in the new application, I do not have a problem with this provided he is able to undertake the role (the 4:50 rule might be an issue as matters currently stand)

• Whosoever is the new TM, the operator will undertake to have a full independent audit 12 months after grant of any new licence. The audit would be of maintenance systems and documentation - and additionally – drivers’ hours and records compliance, including Working Time Directive requirements. The operator would send copies of its response to any audit recommendations within 14 days of receipt to both the OTC Birmingham and the local DVSA office.

8. Decisions

I make decisions as set out at paragraphs 1 to 7 inclusive, above.

Nick Jones

Deputy Traffic Commissioner

5 August 2021