Decision

Decision for Graham Byrne (OF0231732) and GB Digger Hire Ltd (OF2036945)

Published 8 March 2021

IN THE EASTERN TRAFFIC AREA

1. GRAHAM BYRNE – OF0231732 AND JAMIE TURNER - TRANSPORT MANAGER AND GB DIGGER HIRE LTD – APPLICATION OF2036945

1.1 CONFIRMATION OF THE TRAFFIC COMMISSIONER’S DECISION

1.2 REDACTED VERSION

2. Background

Graham Byrne trading as GB Digger Hire, holds a Standard National Goods Vehicle Operator’s Licence authorising 6 vehicles and 3 trailers. The Transport Manager is Jamie Adam Turner.

There is one Operating Centre, at Woodland Farm, Shorthorn Road, Stratton Strawless, Norwich NR10 5NU. There are two declared contractors showing on the licensing record: AD & TGF Harvey and Volvo Truck and Bus, undertaking Preventative Maintenance Inspections of vehicles and trailers at 8-weekly intervals. The RHA audit submitted does not reflect the changes which, I am told in written representations, were notified on 27 November 2020. In evidence I was told that the Transport Manager made this decision due to the incidents on the sites visited by vehicles.

The applicant company, GB Digger Hire Ltd was incorporated on 29 April 1987 (page 77). It now seeks a Standard National Goods Vehicle Operator’s Licence authorising 6 vehicles and 3 trailers. The applicant company has nominated the same site at Woodland Farm, Shorthorn Road, Stratton Strawless, Norwich NR10 5NU and the same maintenance contractors: AD & TGF Harvey and Volvo Truck and Bus, to undertake Preventative Maintenance Inspections of vehicles and trailers at 8-weekly intervals.

3. Hearing

The Public Inquiry was originally listed for 18 January 2021, in Tribunal Room 1 of the Office of the Traffic Commissioner in Cambridge but due to the imposition of additional lockdown restrictions, it was rescheduled for today, 22 February 2021, in order to allow participants to attend by video link. The operator was present in the form of Mr Byrne operator and applicant Director, accompanied by Mr Turner, Transport Manager and nominated CPC holder, represented by Scott Bell of Backhouse Jones, solicitors.

4. Issues

The public inquiry was called for me to consider whether there were grounds to intervene in respect of this licence and specifically by reference to the following sections of the Goods Vehicle (Licensing of Operators) Act 1995:

• 26(1)(b) – breach of conditions / failure to notify (events affecting good repute, change of ownership)

• 26(1)(c)(iii) – prohibitions

• 26(1)(e) – statements of expectation (operating entity)

• 26(1)(f) – undertakings (fit and serviceable, driver defect reporting, record retention)

• 26(1)(h) – material change

• 27(1)(a) – repute, financial standing, professional competence by reference to transport manager repute and Article 4

• 28 – disqualification

In respect of the application, the applicant was given further opportunity to satisfy me that the statutory criteria are met and specially by reference to the following sections:

• 13A(2)(b) – good repute

• 13A(2)(c) – financial standing

• 13A(2)(d) – professional competence by reference to 13A(3)(a) and Article 4.

• Section 13C(4) – maintenance

• Section 13D – further requirements for standard and restricted licences

The operator and applicant were directed to lodge evidence in support to include up to date finance and compliance documentation. Two substantial lever arch files were produced by Messrs Backhouse Jones. It was noted that the financial evidence was in the form of unverified copies. That includes, at tab 25, what was described as GJB savings. Mr Byrne’s name occurs at the top right, but it was unclear if that is as the account holder.

I also noticed that the company appears to make payments for insurance, spares, financing, and large payments to Mr Byrne. The latter might be for transport, but the company was also paying DVLA. Both entities make payments to a Mr Reeve. It was of little assistance that, except for Drivers Paul Anthony Pilcher and Mark Andrew Tye, I was unable to identify any driver’s family name. From driver infringement information I was also able to identify Drivers: Gerald Brian Norton, Shaun or Roger Norton, Neil Robert Shepperd and a list, said to total 14. I could find no specific payments to them or to Mr Turner, although his email suggested a consultancy arrangement. It was perhaps unfortunate that the sole trader and applicant Director chose not to follow the steer provided through OTC Licensing but instead further complicated the arrangements.

5. Summary of Evidence

As the Case Summary in the bundle identifies, OF0231732 was granted to Mr Byrne on 20 July 1999. The current Transport Manager, Mr Turner, was appointed to the licence on 31 October 2019.

A renewal reminder was sent to the Operator on 23 May 2019. A cheque in the name of G B Digger Hire Limited was lodged to cover the renewal fee. OTC noted the change in entity and advised that a new application would be required (page 118). Mr Byrne responded on 3 June 2019 (page 119), enclosed another cheque, this time in his own name and blamed the previous payment on an ‘administration error’.

An undated letter was received by the Office of the Traffic Commissioner, notifying of a prohibition that had been issued by DVSA for load security on 28 July 2020 (page 93). The letter was headed in the name of G B Digger Hire Limited.

As a result of the above, a request for explanation was sent on 4 August 2020 (page 116). Bank statements for the previous three months were also requested.

A response dated 7 August 2020 (page 117) referred to another administrative error: ‘simply printed onto the wrong letterheaded paper’. The requested financial evidence was supplied. The operator was put on notice of the potential consequences in a letter dated 25 August 2020 (page 80).

A response dated 10 September 2020 (page 82) was drafted by solicitors. It confirms that: The business was started as Graham Byrne trading as GB digger hire which owned all of the assets of the business (ie plant/machinery/operating centre close) as well as him receiving income from other sources not associated with GB digger hire….. Upon accountancy advice for both protection and future planning, a decision was made for the sole entity to incorporate on 31 May 2017 with the division of assets being made between the sole trader and GB digger hire limited from our instructions we understand that the limited company:

• Employs the heavy goods vehicle drivers.

• held the V5s for the HGVs, paid for the fuel, insurance, road tax, maintenance costs associated with the HGVs.

• contracted with the end user for the supply of hire machinery.

• paid the finance costs on an any HGVs.

We also understand that the sole trader:

• held some of the property in the vehicles and other assets.

• charged the limited company and monthly management fee.

• owned the operating centre.

In contrast to the previous responses, the letter confirmed that advice had been given by the accountants that as part of the incorporation the operator licence would need to change, but the operator could not recollect why this was not done at the time and suggested the previous transport manager would have been responsible. The solicitor’s letter describes this as an ‘all-too-common oversight’ and ‘an error arising from accountancy advice’. Mr Byrne acknowledged that the responsibility was his. The letter also indicated that Mr Byrne continued to provide instructions to the drivers as to loading and routes. The office team was described as relatively small and the transport manager as being part time and on an external basis.

The operator, through its legal representatives, sought to ‘regularise’ the position. It was proposed that a new application would be submitted in the name of the limited company with the sole trader licence to be surrendered once grant was secured. An audit and further training (OLAT) for Graham Byrne were also proposed. The latter was booked for 11 January 2021 but cancelled due to the current lockdown restrictions. I was told that Mr Byrne preferred to attend in person.

Application OF2036945 was lodged in the name of G B Digger Hire Limited on 16 September 2020. Financial evidence supplied was in the name of the applicant company. The proposed operating centre and transport manager were the same as those on the sole trader licence. An interim was requested. On 26 October 2020, a letter was sent to the applicant company requesting the surrender of the sole trader licence, proof of booking for the training referred to above and a copy of the contract with the proposed transport manager. The response on behalf of the operator/applicant unfortunately conveyed the impression that grant was a matter of negotiation precluding grant of interim authority. The operator was put on notice dated 9 November 2020 that continued unlawful use of the sole trader licence by the applicant company would put future operations at real risk. It was then proposed that operations would continue under the responsibility of the sole trader.

A significant number of documents were lodged by Mr Bell in advance the hearing, including an RHA audit dated 16 December 2020, financial statements for both entities, inspection records for four vehicles, driver defect reports for EF11 VAD, defect report log and tyre check documentation.

[REDACTED] Regrettably, several questions arose from the documentation, which Mr Bell was not able to answer in time before the hearing. I was assisted by the above information regarding the inspection intervals. The examples identified by the RHA predated that reduction. The auditor was therefore incorrect in stating that intervals had been exceeded and I noted that AY66 ZTT was apparently VOR. The vehicles in question were then around or over 10 years old.

The RHA referred to random auditing of driver defect inspections and yet analysis of the PMI records suggested a number of driver detectable defects being left to PMI. Many of the driver reports do not contain the driver’s family name. I was referred to what were termed gate house checks. Those did not appear to address the number of driver defects at inspection. I was unclear why drivers have not previously received instructions to check the O/L disc in the window, as identified in the RHA audit, but was reminded that this is not specifically identified on generic driver check lists. In evidence it was agreed that drivers require training and scrutiny. Mr Turner is due to complete a toolbox talk on driver walk round checks. I was content for Mr Turner to continue to act as a Transport Manager.

I was unclear why the operator was not following the Guide to Maintaining Roadworthiness starting point of RBT at every PMI and only 4 x pa. Vehicles appeared to be presented under-laden, as confirmed by the RHA and my own observations of the PMIs. I noted:

• AY60 AYG, DTp 5855, GVW 25.7 tonnes, brake tested 24 June 2020 47% of GVW = results of 36%, 19%, 8%.

• AX66 BEU, DTp 6577, GVW 27 tonnes, brake tested 4 November 2020, 58% of GVW = results of 41%, 34%, 24%; 16 July 2020 70% = 42%, 35%, 26%; 24 March 2020, 73% of GVW = 45%, 36%, 26%; 27 January 2020, 69% of GVW = 38%, 27%, 18%.

• AY66 ZTT, DTp 80928, GVW 31.5 tonnes, tested 1 December 2020, no printout = 31%, 17%, 10%; 2 November 2020 no printout = 37%, 27%, 13%; 9 September 2020, 31% of GVW = 29%, 17%, 9%, 29 April 2020, no printout = 32%, 15%, 12%.

• EF11 VAD, DTp 5867S, GVW 27.5 tonnes, tested 20 October 2020, 88% of GVW = 50%, 35%, 16%; 8 September 2020, 77% GVW = 50%, 34%, 16%; 17 July 2020, 84% GVW = 50%, 35%, 18%. This is a spare vehicle and due to be changed.

It was suggested that several trailers and vehicles having DTp codes for train weights above 44tons, making loading to the preferred 65% impracticable on most rolling road brake testers. The publicly available DVSA testers’ manual of course refers to 65%, but not less than 50% of the design axle weight to each axle. The operator has been able to present vehicles for annual test and they have passed. That experience needs to be built on. Mr Turner is to investigate further and to confirm how similar results will be achieved at PMIs going forward.

The auditor referred to driver licences being copied at the commencement of employment but there is some confusion as to who they are employed by – PAYE/NI contributions, which were not evident from the financial statements. I noticed that the applicant appeared to make payments for insurance, spares, financing, and large payments to Mr Byrne. Insurance was shown to be in the name of the applicant and the operator. The applicant was also paying DVLA. Both entities make payments to a Mr Reeve. I was not assisted by the fact that, except for Drivers Paul Anthony Pilcher and Mark Andrew Tye, the driver family names were absent from the defect reports. In evidence it was confirmed that the other names were extracted from historic records and no longer relevant to current operations. I could find no specific payments to them or to Mr Turner.

The auditor, Mr Salkeld, identified that Mr Turner as an external consultant and described the provision of management services to the operator for approximately 6 to 7 hours per week. I previously referred to his email address and could not identify relevant payments. Representations suggested that Mr Turner is paid solely for his Transport Manager role, as per the contract supplied and does not provide consultancy services (page 72). The confusion appears to have arisen due to Mr Turner’s other activities advising operators on how to obtain FORS accreditation.

The auditor referred to Mr Warburton paying VED through what are described as company accounts. The sole trader account showed several payments to members of the Byrne family, to what appears to be the odd employee (but not the drivers) and to the Transport Manager’s trading name. The bank statements for the applicant show regular direct debit payments [REDACTED] which are described as wages; for instance, wk40; wk42; and wk42. There are also 4 figure payments to [REDACTED] Tyres being made from both entities. In summary, wages appeared to be paid out of the limited company account as a single lump sum. Maintenance inspections appeared to be paid from the sole trader account and tyre payments from both accounts.

On the morning of the hearing, I was supplied with a note, purporting to describe what it termed. Cross-charging arrangements since 1 September 2020. That note shows handwritten amendments to show that various persons were employed by the applicant, for instance Paul Pilcher to week 32, together with Neil Shepherd. The note describes a secondment to the operator. It indicates that vehicles AY66 ZTT, AX66 BEU, EF11 VAD and a low-loader and yamonville trailer as being under hire to the operator. Other costs for diesel, maintenance contractors and insurance are invoiced to the operator monthly. Both entities are registered for VAT purposes, which is difficult to reconcile with the 5 payments [REDACTED] from the operator to the applicant, when the operator is said to raise an invoice to the applicant company for haulage at cost plus 10%. By way of examples: Invoice no 48 dated 30 November 2020, [REDACTED] does not accord with any of the payments-in to the applicant’s account during December; Invoice No 496 dated 30 November 2020, charging [REDACTED]. does not accord with any payments-in to the operator during December.

I compare this position with the letter dated 10 September 2020, which referred to the transfer under TUPE, but to be fair, a secondment was also mentioned. However, the registered keeper of the vehicles was to be changed. The advice of accountants and HR personnel was sought but again the opportunity for simplification was not realised.

6. Determination

I am satisfied that it is appropriate to make adverse findings under 26(1)(b) breach of conditions / failure to notify of events from the incorporation of the company, 26(1)(c)(iii) – single prohibition, 26(1)(e) – statements relating to the identity of the operator, 26(1)(f) – undertaking on driver defect reporting, 26(1)(h) – material change.

The operator and applicant apparently sought to regularise the position but in putting the advice of accountants and others, above specialist advice on the operator’s licence, they have successfully created a mess which has put the future of those operations at risk. In seeking to continue to operate under contorted arrangements for cross invoicing they have created an even bigger mess. I had the opportunity of hearing from Mr Byrne and Mr Turner. I am satisfied that these actions arose from ignorance on the part of the operator and Director, but they cannot be repeated. I have accepted an undertaking from the applicant that Mr Byrne will supply proof of attendance at OLAT within 3 months of this hearing.

Mr Byrne is warned as to that conduct, and this operator’s licence will be revoked from 23:45 on 22 March 2021, to allow for the orderly transfer of operations to the applicant company.

The application is granted, with a warning as the company was involved in the above operations. It is granted subject to additional undertakings: that within 3 months of this hearing, it will supply notification of the arrangements made for brake testing vehicles with a train weight above 44 tonnes, and that 6 months from this date, it will submit evidence for a review of financial standing to include checks that operations are being conducted by the authorised entity.

Richard Turfitt

Traffic Commissioner

22 February 2021