Decision

Decision for A2Z Skip Hire Ltd (OC2063749)

Published 29 August 2023

0.1 In the North Western Traffic Area

1. Written Decision of the Deputy Traffic Commissioner

1.1 A2Z Skip Hire Ltd (OC2063749)

2. Background:

Following a Public Inquiry held on 26 January 2023, the Restricted Goods Vehicle Operator’s licence of sole trader, Stephen Owen (Jnr) trading as A2Z Skip Hire, then authorising the use of 3 vehicles, was revoked.

The revocation was the result of prohibitions suffered by vehicles operated, the failure to honour undertakings concerned with the fitness and serviceability of vehicles, drivers’ hours compliance issues, inadequate record keeping, poor management of driver defect reporting and arrangements for the carrying out of preventive maintenance. There had been an unnotified material change because the sole trader entity had been superseded by the limited company, A2Z Skip Hire Ltd, which was admitted as operating the vehicles. Administrative arrangements were criticised and DVSA requests for information were not fully met, leading to a conclusion that the fitness of the licence holder had been undermined. It was found that financial sufficiency in the name of the sole trader could not be met.

The Traffic Commissioner’s revocation decision included a direction that Stephen Owen (Jnr) be disqualified from holding or obtaining an operator’s licence in any traffic area for 12 months. The disqualification is in force, not ending until February 2024.

At the same hearing, a new application by A2Z Skip Hire Ltd for a Restricted Goods Vehicle Operator’s licence for 3 vehicles was refused.  The decisions were dated 6 February 2023. The said Stephen Owen (Jnr) was then the company’s sole director and the PSC (Person with Significant Control).

3. This application:

This further application, also made by A2Z Skip Hire Ltd was made on 24 February 2023, less than three weeks after the refusal of the previous application on 6 February 2023. A Restricted Goods Vehicle Operator’s licence for 4 vehicles is sought.

On 9 February 2023 there had been a change recorded at Companies’ House with Stephen Owen (Snr) replacing Stephen Owen (Jnr) as its sole director. They are father and son.

It is noted that subsequently a further change is recorded at Companies’ House. This occurred after the making of this application, and the calling-in to this hearing, on 7 July 2023, when the said Stephen Owen (Snr) became the PSC, in place of Stephen Owen (Jnr).

This waste business running for some 10 years, was said to possess about 100 skips and to run its own waste transfer station, employing 8 persons in all, and operating in the immediate Stockport area.

Stephen Owen (Snr) has not previously held or applied for an operator’s licence. He told me, however, that he had been involved in and around skip businesses for many years, at one time running his own skip operations but with vehicles falling outside the scope of operator licensing. Serious health conditions suffered by him were said to have kept him out of active involvement since 2017. This, except for “bits and bats in the yard” and some driving of 3.5 tonne vehicles.

During the application process, the obvious links between the revoked licence and this application and its timing had prompted the Office of the Traffic Commissioner to seek further information from the applicant company. In response, through a transport consultant, it was disclosed that Stephen Owen (Jnr) is ‘employed as a manager for the company’ and that continued operation of the business was achieved using ‘outside contractors.’

The Traffic Commissioner had directed in March 2023 that ‘Propose to Refuse’ processes were initiated. The applicant had requested the holding of (this) Public Inquiry.

4. The hearing:

The applicant company was present by director Stephen Owen (Snr) represented by Scott Bell, solicitor.

Financial evidence produced showed that the company meets the test of its financial sufficiency and is actively trading.

The calling-in raised concerns about the operator’s fitness, because of ‘relevant activities’ including:

• Whether the proposed arrangement with Stephen Owen (Snr) as director is really a “front” for Stephen Owen (Jnr).

Documents served prior to the hearing raised additional matters:

• Whether, despite having no operator’s licence, the applicant is operating large goods vehicles as evidenced by ANPR statements. The statement from the National ANPR service showed that vehicles, each carrying cherished plates and previously nominated on the sole trader licence of Stephen Owen (Jnr), namely - REDACTED, were identified on the road network on 933 occasions in the period 7 February to 20 June 2023.

• The vehicles listed above had been added to the operator’s licence of REDACTED on 8 February 2023. A document headed “Sales Agreement” purported to reflect the sale by A2Z Skip Hire (sic) to REDACTED on 4 February 2023 (albeit the Traffic Commissioner’s decision refusing the original application by the company was not issued by him until 6 February 2023). The purchase price was REDACTED onwards. Unusually, nowhere in the agreement was the rate at which instalments were payable included.

5. The evidence:

I had the opportunity to hear evidence from Stephen Owen (Snr) with representations from Scott Bell.

Stephen Owen (Snr) told the Public Inquiry:

• He proposed to contract with Nathan Downes (TM for Majestic Transport Ltd) to work 4 hours per week supporting the applicant’s business. Ongoing advice would be available from transport consultant, Grahame Robinson.

• Whilst he had been in hospital for a very serious procedure and was only discharged on 24 March 2023 that he had taken over the business of A2Z Skip Hire Ltd, after the revocation of his son’s operator’s licence.

• He had succeeded his son as he “was doing it wrong” and he could do it better. He did not believe that it would be hard for his son to come to terms with playing a role subsidiary to his father. He felt able to “restrict” his son’s duties. Asked whether he would be content with a provision excluding the involvement of his son altogether from the business, he was prepared to agree such a position. He said he was now the highest earner in the business not his son.

• Initially he seemed to downplay his son’s current role claiming it was limited to part-time by his responsibility for looking after his three children for whom he is the carer, 3 days of the week. Later however, when asked about his own day-to-day role and the role of his son, it appeared that the role as manager to be largely indistinguishable from his own, but for the assertion that Stephen Owen (Snr) would be responsible for the purchase of any new vehicles.

• He proposed to purchase newer vehicles, if the licence was granted and would ensure preventive maintenance checks included laden roller brake testing at each check.

• He had purchased the business from his son for REDACTED and had injected a further REDACTED into it, to improve it. Pressed as to the evidence of these sums being paid, he insisted that they were cash transactions not recorded anywhere. He agreed with my assertion that other than his and his son’s awareness that this happened that no one else knew about it.

• REDACTED was contracted to pick up/drop off the larger skips, but some other work could be carried out in-house using the 3.5 tonne vehicles. His son’s former drivers now drove for both REDACTED and for A2Z Skip Hire Ltd. I was told that REDACTED also had other waste work for the vehicles he had obtained.

• The arrangements for the sale of the skip vehicles to REDACTED had been transacted by Stephen Owen (Jnr) whilst still a director. I was told that the REDACTED was repayable at the rate of REDACTED but this sum was off set in some form against the charges for carrying out that role levied by REDACTED.

• In error, he had booked to attend an OLAT course on the morning of the Public Inquiry. Pressed by me as to what he had learned on the course so far (having come away from it early with the intention of repeating it for the full day shortly) he did not believe he had gained anything at all from the programme.

• I asked about the Waste Carriers’ licence registration, which would have needed to be applied for upon the change of entity from sole trader to a limited company. I was told that an application had been made. {Subsequent to the hearing but before I had concluded my decision, a new registration in the name of the company dated 27 July 2023 (the day after the Public Inquiry) was forwarded unsolicited to my clerk.}

• Asked about the relevant permit for the transfer station under the Environmental Permitting Regulations, it became apparent that this was not held in the company’s name, but I was told this would be sorted out.

In closing, Mr Bell acknowledged the burden that the applicant bore but asked me to consider the intrinsic difficulty for any applicant in asserting non-involvement of a person in a proposed arrangement. He argued that Stephen Owen (Snr) had been straightforward in his evidence and that because things might not have been written down didn’t mean that they had not happened. His client was simply asking for the opportunity to prove the company could be compliant, with the additional support referred to and on the basis that Stephen Owen (Jnr) might be excluded from playing any role.

6. Findings:

I made the following findings on the balance of probabilities:

• This application was born of necessity because the company’s business previously run by Stephen Owen (Jnr) is reliant at least in part on having its own larger vehicles to carry larger skips, which was placed in jeopardy by revocation of the licence and his disqualification.

• The appointment of Stephen Owen (Snr) as director has the hallmarks of a “snap decision” taken as it was within days and at a time when he was seriously ill, and which very soon after resulted in an operation REDACTED. The PSC within the company was changed only 3 weeks before the Public Inquiry.

• Whilst it is asserted that A2Z Skip Hire Ltd changed hands for value after the revocation of the sole trader licence, there is no evidence apart from the changes to relevant entries at Companies’ House to show this is the case. Stephen Owen (Snr) told me that no one else knew of money changing hands for the purchase of the shares, or the cash injection REDACTED claimed to have been made.

• Whilst the said Stephen Owen (Snr) asserted on several occasions that he would be able to manage the licence in a much more compliant fashion than his son had, he has not persuaded me that he has either the skills or the understanding to enable him to do so. He had no real sense of what his son had done wrong, despite being asked about it. I was not convinced that even if he attended a future OLAT programme with a more positive mindset that this would be sufficient to equip him for the role.

• Whilst the appointment of an existing CPC holder, Nathan Downes as a ‘de facto’ TM should be regarded as a positive factor, he was not called before me, and no contract describing his role was placed before me, although I was told a fee had been agreed.

• Whilst I note that I am readily offered that an undertaking that Stephen Owen (Jnr) shall play no part in the business would be acceptable to the current director, I struggle to accept that such a provision would be complied with. I find it wholly unrealistic that Stephen Owen (Jnr) could carry out a role as manager without in fact acting as a shadow director might, never mind not having any role at all. His father has not played any significant role in the business he had built up over the 6 years since 2017. I judge that such a provision would be more likely than not to be unworkable.

• I do not find the arrangement for the sale of his vehicles by Stephen Owen (Jnr) to Paul Harrison and the nomination of them on his operator’s licence, to be anything more than a sham. Whilst a sales agreement provides superficial evidence of a transaction, the reality is that the underlying position remains unaltered, the vehicles, driven by their original drivers carry out their original role transporting A2Z’s skips. There is no evidence before me to show that money has changed hands following the sale, nor were payment terms included in the agreement. No evidence was led to the effect that REDACTED was paying the drivers or controlling their use of the vehicles. The vehicles, despite the sale some 6 months ago, retain the registration plates of Stephen Owen (Jnr). The sales agreement itself provides for a “Security Interest” in the vehicles which would enable which enable the seller to have recourse to the property if the debtor defaults in making payments, or otherwise failing to perform its obligations.

• As demonstrated by the failures to comply with the expectations of the Environment Agency uncovered here, there is evidence of basic and fundamental non-compliance relevant to the waste industry. I am concerned that similar requirements as they relate to transport compliance risk being overlooked in the same manner.

7. Consideration and decision:

This is of course the company’s application, and that the onus is on it to satisfy me that it has the necessary fitness to hold the licence.

The Upper Tribunal decision in the case of Aspey Trucks Ltd (2010/49) makes clear the role of the Traffic Commissioner as “the gatekeeper” to the haulage industry, when considering new applications. Those who are allowed entry must satisfy the Traffic Commissioner of their fitness. In answering that question whether I am so satisfied in respect of this application, I need to be awake to what the public, other operators, and customers and competitors alike would expect of those permitted to join the industry that they will not blemish or undermine its good name or abuse the privileges it bestows.

I find on the balance of probabilities that the requirement of fitness is not met.

I have been asked to accept that when I consider the fitness of A2ZSkip Hire Ltd, I would be asking myself whether I can trust Stephen Owen (Snr): not Stephen Owen (Jnr). Mr Bell seeks to persuade me that this is simply a business where things are not always recorded, as they might be in a conventional business. As indicated in my findings, I consider this application goes rather further than that. I consider that the lack of transparency here is part of a deliberate subterfuge to obscure what is going on: that is the continued operation of vehicles by A2Z Skip Hire Ltd, and an attempt to legitimise that state in this operator’s licence granted to it.

I conclude that I have seen very little evidence of openness or transparency by Stephen Owen (Snr). I am unable to find that I trust him. I conclude he has full knowledge of the true nature of the arrangement with REDACTED and that his son is probably playing a role beyond that of manager. I am unable to conclude that even if the involvement of Stephen Owen (Jnr) was excluded, and that Nathan Downes was alive to the undertaking and that Stephen Owen (Snr) completed an OLAT course that fitness could be assured.

I therefore refuse the application in accordance with sections 13B of the Act.

Simon Evans

Deputy Traffic Commissioner for the North West of England

14 August 2023