Decision

Decision for Hail Transport Limited (OM2018616) and Transport Manager Allister Cathers

Published 5 July 2023

0.1 In the Scottish Traffic Area

1. Written Decision of the Traffic Commissioner

1.1 Hail Transport Limited (OM2018616) and Transport Manager Allister Cathers

2. BACKGROUND

Hail Transport Limited (OM2018616) (hereinafter referred to as ‘the operator’) was incorporated on 30 October 2018. The operator was granted a standard national operator’s licence for two vehicles and two trailers on 16 January 2019. Ms Victoria White was the sole director and shareholder at the time the licence was granted. Mr Allister Cathers is now the sole director of the operator, having been appointed on 1 September 2020. He is also the operator’s transport manager.

Mr Cathers’ history, and that of his father Trevor Cathers, in operator licensing is significantly adverse. It is set out in a number of decisions which were produced within the papers for the inquiry: that of the former Traffic Commissioner for Scotland in 2016; the presiding officer of the Northern Irish Department of Infrastructure (NIPIPO) in 2021; the Upper Tribunal in 2022; and most recently in the Court of Appeal in December 2022. I need not, therefore, rehearse the history again here. Those decisions are referred to for their terms and held to be incorporated herein brevitatis causa.

Given his history and the previous findings in relation to his repute, Mr Cathers’ nomination as director gave rise to concerns that the licence may have operated as a front for him. My office was also made aware that a further finding that Mr Cathers had been found not to have sufficient repute to be granted an operator’s licence had been made by the NIPIPO in January 2021. The operator was called to public inquiry in Scotland on 18 March 2021 to consider those matters.

The day before the inquiry, representations were received on behalf of the operator from Mr Simon Clarke, counsel. Amongst the bundle was a decision of the Upper Tribunal 22 December 2021 – staying the decision of the NIPIPO pending appeal. Given the late notice of the stay, and the lack of time to consider the papers which had been lodged, I adjourned the proceedings ex proprio motu and directed that a new date be fixed.

I was thereafter advised that the operator’s nominated transport manager had resigned. Mr Clarke requested a period of grace to allow the operator to continue to operate without professional competence until a fresh date could be fixed. I was advised that Mr Cathers had his CPC qualification and that he would ensure that transport matters were properly managed. I allowed a POG on that basis.

There then followed a further lengthy period during which the appeal against the decision of the NIPIPO took its course. Put shortly, Mr Clarke’s position throughout that period was that to proceed with a public inquiry which involved consideration of Mr Cathers’ repute whilst that matter was (at least in part) under consideration in another forum was undesirable, given the potential for conflict in the decisions which may be reached. I agreed to hold the public inquiry in abeyance until the appeals were concluded.

In the interim, Mr Cathers made an application to be appointed as transport manager on the licence. On the basis that the matter of his repute was still under consideration and the fact that he had recently undertaken refresher CPC training, I agreed to grant the application, under reservation of any finding which may be made in relation to his repute following appeal.

The decision of the NIPIPO, which included a finding that Mr Cathers did not have the requisite repute to be granted an operator licence, was upheld on appeal by both the Upper Tribunal and the Court of Appeal at Belfast in December 2022.

The adverse findings in relation to Mr Cathers’ behaviour were set out clearly by the Court of Appeal in paragraph 31 of the court’s decision. It was evident they were such as would affect his repute as an operator. Mr Cathers was the sole director and transport manager of the operator company and was apparently in control of its transport operations. Standing that, a propose to revoke letter was issued to the operator. The operator advised, however, that it wished to exercise its right to an inquiry in the circumstances.

The inquiry finally called before me at Edinburgh on 9 February 2023. The operator attended and was represented in his capacities as operator and transport manager by Mr Bowyer, counsel.

A number of productions were lodged by Mr Clarke in advance on the first date for public inquiry. Mr Bowyer produced a further bundle of documents for the inquiry. I had regard to all of that documentation in reaching my decision.

I am grateful to Mr Bowyer for the skeleton argument which helped to focus the issues which were before me for consideration.

3. OPENING SUBMISSIONS

Mr Bowyer advised at the outset that he did not propose to go behind the earlier decisions made in relation to Mr Cathers. However, he did ask me to note that the misdemeanours on the part of Mr Cathers referred to in the 2016 Scottish inquiry were now long spent. It was accepted that the matters at issue in the NI case were more recent.

It was also pertinent that there had never been a finding that Mr Cathers had lost his repute. What had occurred was that twice, on application, was that he was found not to have repute. Those were different matters.

Mr Bowyer also referred me to the substantially indivisible nature of an individual’s repute as operator and transport manager. It was interesting that I had Mr Cathers before me today in both capacities. Mr Cathers had willingly put himself forward as transport manager in circumstances where a finding of loss of repute as an operator would likely be mirrored in relation to his role as transport manager. It was also acknowledged that Mr Cathers’ acceptance as TM on the licence had been under reservation as regards any subsequent findings (either by the appeal court or this tribunal) as to his repute.

There were many adverse findings made in both the Scottish and NI cases in relation to Mr Cathers’ father. However, he was not, and never had been, involved in this licence.

It was denied that this operator had acted as front for Mr Cathers. The original director, Ms White, had been Mr Cathers long term partner. She was a genuine director, driver and qualified transport manager. The change in director had been notified correctly to my office and this licence was a totally different, at 2V and 2T, concern to the Cathers’ licences of the past.

Mr Cathers had no previous convictions. Had the NI cases been dealt with timeously, then the unlawful operations in Scotland would likely not have happened. There were many positives too, such as no MOT failures or prohibitions in relation to any of the operator’s vehicles. Mr Cathers appeared to have been carrying out his transport manager duties on the licence diligently.

4. EVIDENCE

I heard brief evidence from Mr Cathers. He admitted operating his father’s vehicles unlawfully under the auspices of Trevor Cathers Limited in Scotland. He had been open about that during the NI hearing. He appreciated that he should not have done so, but his father was a hard man to work for. A lot of the time it was his way or no way.

The operator was incorporated on 30 October 2018. The sole director was Victoria White who was his girlfriend at the time. She worked at the same place he and his father sub contracted for and they had met then. She was saving up and needed a licence to get bigger work. He had helped her out with advice and they spoke most days. Mr Cathers’ position was that the business had been a good investment for Ms White, but he advised that he was heavily involved in the business from the outset.

Mr Cathers advised that the operator did freight forwarding work for Trevor Cathers. His relationship with Ms White eventually broke down and he bought her out of the business. He added himself to the licence on 1 September 2020 within the 28 days required. He paid Ms White [REDACTED].

Under questioning from me, Mr Cathers accepted that he knew the finding by the NIPIPO in January 2021 was that his operation of vehicles without a licence in Scotland was unlawful. However, he had chosen not stop doing so until December 2022 when the appeal process was finally exhausted. He conceded that he had done so to keep the family business going.

He also admitted that the operator worked exclusively for Trevor Cathers. There were no other contracts. A vehicle which belonged to Trevor Cathers which was specified on Hail Transport’s licence was rented from Trevor Cathers.

Mr Cathers denied that the operator was a front for him but accepted, given the evidence before me, that it may look that way. Mr Cathers advised that he had been carrying out the role of transport manager diligently. He now lived in Scotland and was on hand all the time. He had a maintenance contract with Scania.

When questioned, however, Mr Cathers could not explain why three of the six inspections on his vehicles were carried out late, nor why the forward planner he had produced for inquiry bore no resemblance to the promised inspection intervals. He was also unable to explain why laden brake testing was not being carried out on one vehicle and confirmed that he had not questioned Scania about that, even although it was part of the maintenance contract that he had with them.

5. DECISION

The NIPIPO, the Upper Tribunal and the Court of Appeal have all made clear their findings in relation to Mr Cathers. Mr Bowyer’s position was that he was not asking me to look behind those findings. The Court of Appeal summarise Mr Cather’s behaviour thus:

“[31] In a sentence, all of the business activities carried on by or on behalf of the two appellants and/or Alistair Cathers over a period of four and a half years were in all material respects unlawful, flagrantly so. Alistair Cathers used the incorporated company and his father’s NI licence to circumvent the decision of the Scottish traffic Commissioner in July 2016 to refuse him an operator’s licence on the ground that he had not demonstrated the requisite repute. Alistair Cathers, as sole director and transport manager of the company, continued to operate blithely in the teeth of this refusal and the statutory scheme. Based on the findings of the NIPOPO’s findings and all of the evidence he plainly did so knowingly. Furthermore, he chose not to adopt the lawful option identified in para [25] of the NIPOPO’s decision namely assisting his father in developing the business in Northern Ireland and improving the compliance regime, thereby building his own personal repute.

Having regard to regulatory context and the requirement that trust between operator and Commissioner in this jurisdiction, it is hard to imagine a more damning indictment of an individual’s behaviour.

Mr Cathers is the sole director and shareholder of the operator company. That alone is not enough per se to equate Mr Cathers’ behaviour with that of the operator. However, it is absolutely clear from the evidence that Mr Cathers is the controlling mind of the operator. He is the one who operates the vehicles. He was sub-contracting work and renting a vehicle from his father. He is the transport manager. Leaving aside the question of fronting, which I will come to later, Mr Cathers admitted he had been ‘heavily involved’ with the transport operations of the operator company since its inception. There is, therefore, only the thinnest of corporate veils in this case to pierce and I do so readily.

Standing that and having regard to the serious findings made by the Court of Appeal and others along the way, it is of note that the operator chose to request a public inquiry in response to the proposal to revoke this licence. The writing on the wall could not have been plainer. As such, I find that request to have been a delaying tactic employed by Mr Cathers to allow him to carry on operating, to quote the Court of Appeal, ‘blithely in the teeth of the refusal to grant him a licence and the statutory scheme’. Mr Cathers is clearly a man who just refuses to take ‘no’ for an answer.

I found Mr Cathers to be an unreliable and unconvincing witness who appeared unable to grasp the seriousness of his actions. He sought to excuse his unacceptable behaviour, over many years, by reference to his father being overbearing, demanding and difficult to work for. It is obvious, however, that the Cathers’ businesses have always been family concerns. The operator’s work was limited to sub contracting for Trevor Cathers. Set against that evidence, Mr Cather’s assertions that his father had not and would not be involved with the operator company’s licence were not credible.

When asked to explain why he had not heeded the expert opinion of the NIPIPO on the lawfulness of his behaviour and stopped operating while awaiting the outcome of the appeal(s), Mr Cathers’ answer was that he had wanted to keep the family business going. That evidence demonstrates further, if it were needed, that Mr Cathers is a man who prioritises profit and his own interests over compliance.

Mr Cathers also sought to portray himself as a capable transport manager, yet he was unable to explain why systems for vehicle maintenance were failing or why the forward planner he had produced for inquiry was not what it purported to be.

Mr Cathers had a history of magnet use and card swapping (see the former traffic commissioner’s 2016 decision). I did not accept Mr Bowyer’s submission that those indiscretions should be treated as ‘spent’. I have a wide discretion conferred on me by paragraph 5(3) of Schedule 3 of the Goods Vehicles (Licensing of Operators) Regulations 1995 in relation to the evidence I choose to admit. Moreover, in assessing repute, I am bound to have regard to all of the material evidence. It is well established that traffic Commissioners can go back as far as needs be to answer the question as to whether there is likely to be compliance in the future (2014/008 Duncan McKee and Mary McKee).

Mr Cathers behaviour involves a pattern of dishonesty. Evidence of previous dishonest behaviour in the context of operator licensing is, therefore, clearly relevant even if it is able to be afforded slightly less weight given the passage of time.

Mr Cathers denied that the operator was a front for him to operate in Scotland. I was directed to a large payment made to the former director Ms White as evidence of that. Mr Bowyer cautioned me against being too quick to find that fronting had taken place. There were many arrangements which may appear at first blush to be fronting but which were actually genuine business arrangements.

However, having regard to Mr Cathers’ lengthy track record of operating unlawfully, the refusal of his application for a licence in Scotland in 2016 and the fact that a propose to revoke letter was issued in relation to his father’s NI licence on 10 October 2018, just days before the incorporation of this operator company, I have no hesitation in finding that the operator was a front for Mr Cathers. Hiding behind the name of his then partner, Mr Cathers was seeking to ensure that he had another vehicle to allow him to operate in the Scottish traffic area should worst happen with his father’s NI licence.

Ms White may have been involved – she was certainly named as transport manager notwithstanding Mr Cathers’ evidence that he was always heavily involved in managing transport operations - and may even have invested in the business. However, the fact that a large payment was made to her from the business account in circumstances where she and Mr Cathers had recently separated, absent any supporting documentation or other vouching, is not cogent evidence that her control of the operator company was genuine.

I turn now to Mr Bowyer’s submission that I should treat the failures on Mr Cathers’ part to establish repute on application differently from cases where there had been a loss of such. I reject that submission for the following reasons.

It appears to me that there are, broadly, two sets of circumstances in which an applicant can fail to satisfy a Traffic Commissioner that it has repute. The first is where it is unable to produce sufficient evidence to establish repute – as a result, for example, of an inability to produce evidence of recent good character or rehabilitation. In such cases a Traffic Commissioner makes a finding that the applicant has failed to discharge the burden of proof in relation to repute based on an insufficiency of evidence.

The second (and more common) circumstance is where an applicant is found to have failed to discharge the burden of proof as a result of their being evidence of wrongdoing or unsuitability on their part which is before the traffic commissioner. In those circumstances, the Traffic Commissioner makes a finding in fact that such wrongdoing or unsuitability affects repute.. It is as a result of that finding, rather than an insufficiency of evidence, that the applicant is found to have failed to discharge the burden of proof in relation to repute.

It is clear then that the process followed by the Traffic Commissioner in the second circumstance is no different to that followed in a regulatory case where the burden of proof on repute lies with the Traffic Commissioner. In Mr Cathers case, he has failed at application on each occasion to establish repute as a result of findings of wrongdoing on his part in the context of operator licensing. Such findings are therefore able to be given equal weight when it comes to assessing Mr Cather’s repute in the current proceedings.

There are some positives to take into account. The operator has a good MOT pass rate and no recent prohibitions have been brought to my attention. Mr Cathers has no convictions. He had informed my office of his appointment as director of the operator within the required 28 days. Those positives pale into insignificance, however, when set against the magnitude of wrongdoing in Mr Cathers’ case.

I asked myself the question posed in 2009/225 Priority Freight: How likely is it that this operator will, in future, operate in compliance with the operator licensing regime? I had regard to the serious and prolonged nature of Mr Cathers’ wrongdoing, equated with that of the operator, as set out by the NIPIPO in his decision and upheld unanimously on appeal. Considered alongside my findings that he has been involved in a fronting arrangements with this licence and had deliberately sought to extend his ability to operate in the Scottish traffic area by requesting a public inquiry, I considered it highly unlikely that Mr Cathers would comply in the future.

Moreover, the evidence clearly demonstrates that I am unable to trust Mr Cathers. In 2006/277 Michael James Fenlon t/a County Skips the Tribunal said:

‘It has been said on many occasions that trust is one of the foundation stones of operator licensing. Traffic Commissioners must be able to trust operators to comply with all the relevant laws, rules and regulations because it would be a physical and financial impossibility to police every aspect of the licensing system all day and every day. In addition, operators must be able to trust other operators to observe the relevant laws, rules and regulations. If trust between operators breaks down and some operators believe that others are obtaining an unfair commercial advantage by ignoring laws, rules or regulations then standards will inevitably slip and the public will suffer.’

I was not formally addressed on the matter, but the question posed in T/2002/217 Bryan Haulage (No.2) is likely relevant. Revocation of this licence should, finally, mean the end of operations for Mr Cathers in Scotland. “Is the conduct of this operator such that it ought to be put out of the business?” Given the significant effect that Mr Cathers lengthy period of unlawful operation has undoubtedly had on fair competition and what can only be described as his flagrant disregard for the regulatory regime, it is appropriate and proportionate to answer that question in the affirmative.

Standing all of the foregoing, I find that the operator has lost its repute. A formal finding in terms of section 27(1)(a) of the Act is made out.

I had regard to the Senior Traffic Commissioner’s Statutory Document No. 10: Principles of Decision Making, in particular, Annex 3. This case was one where the operator’s actions had clearly impacted fair competition. Honest operators have been deprived of work as a result of Mr Cathers’ unlawful operation. Other operators who carry out their businesses in a compliant manner would be shocked if another operator were permitted to operate vehicles against this background. I therefore revoke this operator’s licence with effect from 25 May 2023 which allows a short delay to facilitate the return of vehicles that may be in use.

In considering whether disqualification should follow revocation, I again had regard to Senior Traffic Commissioner’s Statutory Document No. 10: Principles of Decision Making. I also had regard to the fact that my decision may contain an element of deterrence (Thomas Muir (Haulage) Ltd v Secretary Of State For The Environment, Transport & The Regions [1998] ScotCS 13). The Transport Tribunal in T/2010/29 David Finch Haulage said:

“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…”

The Senior Traffic Commissioner’s guidance states that severe cases may merit disqualification for an indefinite period. This is a very obviously a severe case, involving long periods of unlawful operating and repeated breaches of trust on the part of Mr Cathers. He has, to all intents and purposes, thumbed his nose at the regulatory regime.

In the circumstances I consider it appropriate to disqualify the operator, and Mr Cathers, from holding an operator’s licence for an indefinite period. I also direct that Mr Cathers should not act as a director or a partner in any entity which holds an operator licence in GB for the same period. Any such involvement will render the licence liable to revocation, suspension or curtailment in terms of section 28(4) of the 1995 Act.

6. Mr Cathers – Transport Manager

Mr Cathers sought to assure me that he was a diligent transport manager. However, his evidence at inquiry in relation the management of the operator’s systems for vehicle maintenance was unimpressive. Inspection frequencies were being missed and brake testing was not being properly monitored. The forward planner he produced bore no relation to the maintenance schedule for the vehicles and had clearly been created in anticipation of inquiry.

Competence and candour aside, Mr Bowyer reminded me that in most cases repute is indivisible between operator and transport manager. He referred me to the case of Alistair Walter T/2017/55 in which the Upper tribunal had discussed that point. He submitted that the current case was likely to be one where such indivisibility may be found.

I agree with that submission. It is Mr Cathers who operated unlawfully for such a prolonged period. It is he who used this operator as a front ensure he was able to operate in Scotland when faced with the potential loss of his father’s licence in 2018. It is he who has deliberately and consistently sought to defeat the ends of the regulatory system. Those are actions which have lost his company its repute. There are no grounds upon which to base a finding that the same should not apply to Mr Cathers’ repute as transport manager.

Accordingly, I find it proportionate to conclude that Mr Cathers has lost his repute as a transport manager. I am, therefore, obliged by virtue of paragraph 16(2) of Schedule 3 of the 1995 Act to disqualify him from acting as such.

For the reasons set out in paragraph 52, I see no reason to depart from the period of disqualification I have decided upon in relation to Mr Cathers as operator. That being the case, I also disqualify him from acting as a transport manager for an indefinite period.

I am unable to think of any rehabilitative measure which I could specify. I was reminded of the words of my predecessor in T/2014/42 Brian Robert Cutmore:

“I cannot think of any rehabilitative measure which would restore the attitude of mind and fortitude towards compliance which is an essential characteristic for a transport manager ”.

I have reached the same conclusion in relation to Mr Cathers and accordingly specify no rehabilitation measure. It is, of course, open to him to apply to be appointed as a transport manager again, or to seek to have his disqualification as both operator and/or transport manager cancelled or varied in the future. If he chooses to do so, he will undoubtedly face a high bar in seeking to demonstrate that he has, once and for all, learned lessons and is fit to be trusted to join this industry.

Claire M Gilmore

Traffic Commissioner for Scotland

10 May 2023