Decision

Written decision for Chelsea Scaffolding Access Limited (OK1108933)

Published 22 October 2020

In the South Eastern and Metropolitan Traffic Area.

Redacted decision of the Traffic Commissioner.

Goods Vehicles (Licensing of Operators) Act 1995.

1. Decision

Pursuant to adverse findings under Section 26(1)(b) and (h) of the Goods Vehicles (Licensing of Operators) Act 1995, Chelsea Scaffolding Access Limited fails to meet the requirements to (i) not be unfit to hold an Operator’s Licence; and (ii) to have appropriate financial resources as required by Section 13B and D of the 1995 Act. Accordingly, the Licence is revoked with effect from 23:45hrs on 23 August 2018.

Chelsea Scaffolding Access Limited and its Directors Ricki Lee Webb and Nigel Grayston are disqualified from holding or obtaining an Operator’s Licence or being involved in any entity that holds or obtains such a Licence in Great Britain, as provided for by Section 28 of the said Act, for an indeterminate period with effect from 23:45hrs on 23 August 2018.

2. Reasons

Chelsea Scaffolding Access Limited was called to Public Inquiry once on notice that (i) it may be the subject of financial difficulties; and (ii) there were possible connections with Mr Grayston, Bridge Group and Hadley Scaffolding Limited. Of particular disquiet was the delay in additional finances being produced to the Central Licensing Office (“CLO”) in Leeds and the fact that Mr Grayston’s directorship/potential change of ownership was not disclosed to CLO.

I heard oral evidence from Mr Webb and Mr Grayston, who were both represented by Mr Paul Mason, Solicitor. Their evidence can be summarised as follows:-

• At the time of the application to upgrade the Licence to Standard National, the Operator did not in reality have access to sufficient funds for even 1 vehicle.

• Mr Webb asked Mr Grayston for assistance because Chelsea Scaffolding Access Limited was suffering cash flow problems.

• Mr Webb and Mr Grayston knew each other because originally the Bridge Group were looking at purchasing Chelsea Scaffolding Access Limited but decided to proceed with Hadley Scaffolding Limited instead. Mr Webb and Mr Grayston remained on amicable terms.

• The monies paid into the bank account to support financial standing for the upgrade were transferred out of that account once financial evidence was sent to CLO for the upgrade. In those circumstances, it was not actually available to the Operator to support ongoing transport operations. When the transport consultant sent his e mail to CLO on 6 December 2017, Chelsea Scaffolding Access Limited was just (REDACTED) short of its overdraft limit.

• There is no paperwork around that (REDACTED) “loan”. It was done on a “handshake” with Mr Nigel Grayston on behalf of Bridge Group.

• The sole Director of Shrinkwrap UK Limited, as listed at Companies House, is deceased. It is his son, Edward Champney Junior, who is also a Director of Hadley Scaffolding Limited, that is running Shrinkwrap UK Limited.

• The first that Mr Webb and Mr Grayston were aware that money had come from Shrinkwrap UK Limited was at the Public Inquiry today. Mr Grayston asked the Bridge Group finance department to arrange the loan. Someone else had decided to have Mr Champney move the money from funds already lent to him by the Group.

• Mr Grayston also recommended Mr Stuart Tucker to Mr Webb when he was looking for someone to assist with the day to day running of the transport operations. This was to help him free up time to run the scaffolding inspection company with his sister.

• Over the winter months, the inspection scaffold company and Mr Webb personally paid a number of the Chelsea Scaffolding Access Limited bills because the company did not have enough money. This included paying the self-employed drivers and fuel. Mr Webb did not think of the legal implications for the Operator Licence by such an arrangement. It follows that for a number of months Chelsea Scaffolding Access Limited was unable to meet the ‘ins and outs’ of business let alone have the appropriate financial resources on top, as set out in Senior Traffic Commissioner’s Statutory Guidance and Statutory Directions No. 2 on Finance.

• Mr Webb in evidence told Mr Mason that he was not aware of Hadley Scaffolding Limited’s transport issues at the time he applied to upgrade his Licence. During my questions, he admitted that he probably did know about it in the background.

• I asked Mr Webb if there were any outstanding loans. Mr Webb initially denied that there were. Upon subsequent questioning, he admitted that there was a loan from the Bridge Group and from the Funding Circle, the latter of which will shortly end. There are also the loan note arrangements around the purchase of Chelsea Scaffolding Access Limited by Stamford House Trading (part of the Bridge Group).

• A number of direct debits have gone unpaid on first try because of the cash flow problems. This included the payments to (REDACTED) for the vehicle and public liability insurance.

• Mr Webb told me that apart from a few telephone referrals, Hadley Scaffolding Limited and Chelsea Scaffolding Access Limited do not do business together. He subsequently changed his evidence when I pointed out to him the payments from and to Hadley Scaffolding in the bank statements.

• The current bank statements demonstrate that as recently as 1 June 2018 another of Mr Webb’s companies paid in monies to meet a payment due to Hadley Scaffolding Limited. Mr Webb confirmed that, although the Bridge Group lent (REDACTED) on 26 April 2018, the intercompany and personal financial support was needed until the days running up to the hearing.

• Mr Grayston told me in evidence that he had not read the Public Inquiry bundle for today as he had instructed Mr Mason. It therefore came as a surprise to him that he was not listed at Companies House despite that being obvious on the face of the papers. I pointed out I had checked Companies House the night before and he is still not listed as a Director. Mr Grayston was also unaware that his directorship was not notified to CLO or the change of ownership arrangements with Mr Webb.

Mr Grayston seemed surprised at my concern that Mr Tucker would be managing transport operations day to day despite everything that was said in my written decision in relation to Hadley Scaffolding and TLT.

Paragraph 35 of Statutory Document No. 2 sets out in unequivocal terms the cooperation that is required from Operators generally and when it comes to matters of finance in particular. Due to the failure to cooperate, Mr Webb misled me and my Office on the financial precipice upon which Chelsea Scaffolding Access Limited was perched over a number of months. A change in financial resources such that the Operator cannot even meet its bills is a material change. Further, through “advice” from a Transport Consultant, there was positive resistance in sending in any further finance. That Transport Consultant is already aware of my concerns at certain practises in his company. However, Operators cannot hide behind bad advice. They are deemed to know all the advice and guidance, which is in the public domain as per 2012/030 MGM Haulage and Recycling Ltd.

I am asked to accept that the loan from the Bridge Group in April 2018 is ‘real’ and not a sham, as happened in November 2017. However, even weeks after the loan, Chelsea Scaffolding Access Limited is seeking funds from another of Mr Webb’s companies. I therefore remain to be satisfied that the funds are truly available.

Directors have separate statutory duties under the Companies Act to exercise independent judgement, skill care and diligence. These duties are apposite in terms of transport operations, both in terms of road safety and fair competition. The operator licencing legislation, the Senior Traffic Commissioner’s Statutory Guidance and Statutory Directions and the CLO forms make it clear that I am entitled to know whom I am regulating and that material changes are notified. The failings of Mr Webb since at least November 2107 are articulated above. Those in relation to Mr Grayston also need to be set in context. From the end of the first day of the Hadley Scaffolding Licence application Public Inquiry on 26 October 2017, Mr Grayston knew that the transport operations utilised by Hadley Scaffolding were under scrutiny. The fact that many of the omissions and actions happened after the final written decision on 9 March 2018 does not assist him. Due to both directors lack of transparency, I am also unable to accept oral assurances that Chelsea Scaffolding Access Limited has not carried Hadley Scaffolding equipment. More is needed than a few un-receipted invoices from Sovereign to Hadley.

There are no real positives in this case. Yes, some more money has come in and Mr Webb
did do some training in 2016. However, there are some cases where it is only necessary to set out the conduct in question to make it apparent that a Licence should be revoked and the Operator put out of business, as per 2012/034 Martin Joseph Formby t/a G&G Transport, 2012/020 A+ Logistics Ltd. On the face of the chronology above, this is such a case. It is not the Operator’s first Public Inquiry. Through its failure to co-operate it has ended up at a second Public Inquiry at the start of its busy season rather than the quiet times of a few months ago. I am told that work has now picked up and it asks for an opportunity to continue in business. However, to maintain the integrity of the operator-licensing regime, Operators must not be seen to be rewarded for misconduct. The misleading statements, fluid evidence and lack of formality means that I simply cannot trust this Operator moving forward, when I pose the helpful question set out in 2009/225 Priority Freight Limited & Paul Williams. For the same reasons, the Operator must deserve to be put out of business (2002/217 Bryan Haulage No.2). Accordingly, I have reached the Decision set out in paragraph 1 above.

In T/2010/29 David Finch Haulage the then Transport Tribunal said:

The principles that derive from these and other cases on the point can be simply stated. The imposition of a period of disqualification following revocation is not a step to be taken routinely, but nor is it a step to be shirked if the circumstances render disqualification necessary in pursuit of the objectives of the operator licensing system. Although no additional feature is required over and above the grounds leading up to revocation, an operator is entitled to know why the circumstances of the case are such as to make a period of disqualification necessary. Additionally, periods of disqualification can range from comparatively short periods to an indefinite period, and can be confined to one traffic area or be extended to more than one”.

It is clear that each case must be considered on its own merits (2009/011 Katherine Oliver and J W Swan & Partners). Where the honesty and integrity of individuals are found wanting, it should not come as a surprise if a period of disqualification follows. Mr Webb and Mr Grayston’s conduct strike at the heart of the trust and transparency that underpins the licensing regime. This decision must not be seen as ‘just a revocation’, fill out the GV79 form and have another go. The disqualification is for them both to review their conduct to date and decide if they are of the calibre that can meet the high standards required of all Operators. It is open for them to apply to vary or cancel the disqualification order at any time but I cannot exclude the possibility that such applications will be determined at a hearing.

Miss Sarah Bell

Traffic Commissioner for London & South East England

21 June 2018