Decision

Decision for MH Excavations (Haulage & Demolition) Ltd, OC2061932

Published 4 August 2023

0.1 In the North Western Traffic Area

1. Written Decision of the Deputy Traffic Commissioner

1.1 MH Excavations (Haulage & Demolition) Ltd, OC2061932

2. Background

MH Excavations (Haulage & Demolition) Ltd is an applicant for a new Restricted Goods Vehicle Operator’s licence for 2 vehicles. The sole director of the company is Michael O’Halloran. The application was made on 8 December 2022.

The application was called-in to a Public Inquiry for four reasons which raised concerns about fitness to hold the operator’s licence.

First, the circumstances of the termination of a previous licence held by the same company (OC1112090) with the same director. Originally granted as a Standard National Goods vehicle operator’s licence, it had been downgraded on the director’s application to a Restricted licence in April 2022.  That licence (hereafter the ‘old licence’) terminated on 30 September 2022 as “continuation not sought”. Renewal was not applied for, nor were renewal fees paid by the operator. It transpired the nominated correspondence address held for that operator was at an operating centre that had been sold by it. No notification of this change was made to the Office of the Traffic Commissioner, and it is therefore possible the non-statutory renewal reminder letter issued did not reach the operator. Well-established case law provides that it remains the responsibility of an operator to renew, whether (or not) a reminder is received.

Secondly, unlawful use of a vehicle by this applicant company during the application process for the current licence. The brief contained an unchallenged written statement referring to Automatic Number Plate Recognition (ANPR) evidence of images of the vehicle previously listed on the old operator’s licence being captured on the road network on 336 occasions over the period 7 October 2022 to 1 February 2023. That unlawful use took place after the old licence’s termination but also, and critically in my view, after the new application for this licence was made. At the end of the Public Inquiry held, I had told the operator I would be requesting further data about vehicle movements. A further statement, since served on the applicant, referred to the period 17 February 2023 to 29 May 2023. Images of the vehicle previously listed on the old licence were captured on the road network on 162 occasions over 22 days of the review period, the last of them on 17 May 2023. All of these instances coming after the new licence was applied for, when it was clear no operator’s licence was in force.

Thirdly, concerns about the use of vehicles that were not fit and serviceable. The old licence had been called-in to a Preliminary Hearing on 20 April 2021, which had concerned, amongst other matters, prohibitions previously issued (albeit in 2017), fixed penalties and a very poor MOT first time pass rate.  Following that hearing (and subsequently), a series of undertakings were agreed to be attached to the old licence. These covered pre-MOT testing by the operator and roller brake testing at each inspection with a laden test at every alternative test.

Finally, the suitability of a Restricted operator’s licence for the use to which vehicles would be deployed. Specifically, whether the company should in fact have applied for a Standard National Goods Vehicle operator’s licence, rather than a Restricted licence because of the nature of the work to be carried out.

3. The Public Inquiry

At the Public Inquiry before me, the director was present together with Andrew Gilliburn, who had, in the latter days of the old licence, been its TM. I heard evidence from each of them. The operator was represented by Darren Finnegan of counsel.

From the outset, it was accepted on behalf of the operator that the application made was “not ideal” and that Michael O’Halloran had low expectations that he would immediately be able to be able to walk out of the hearing with an operator’s licence. It was conceded that an application might be more realistic if it were for a Standard National operator’s licence, carrying with it the need for Andrew Gilliburn to hold a statutory TM role in the business. (I was told he would be supporting compliance whether it was or not). There had been debate within the company’s business, although not concluded, in the weeks before the hearing about whether the application ought to have been made in a different entity and whether additional directors could be offered alongside Mr O’Halloran to assuage possible concerns.

I declined an oral request made that the application be varied to one for a Standard National licence. I found that such an application made “at the door” of Inquiry, where no TM1 application had been filed was made too late. It seemed to me that steps ought to have been taken in advance, particularly since the calling-in letter had been issued over 2 months earlier. Provided with the opportunity by me to withdraw the current application, or adjourn to make a proper application, after consultation with his client, I was invited to hear the application as it stood.

4. The Oral Evidence

Michael O’Halloran accepted that the responsibility for the failure to renew the old licence lay with the operator. It was stressed to me it was not a deliberate act, but the result of negligence. He said he had agreed with the new owner of the former operating centre that any mail would be forwarded to him, but he said it had not been. As a result, he claimed he did not know of the renewal correspondence or the eventual termination.

I found Mr O’Halloran proved a somewhat poor historian when it came to the dates when relevant matters occurred. He initially said he didn’t recall when he found out about the termination. He accepted that he must have realised at some stage but had allowed vehicles to continue to operate “by mistake” but that this had stopped “a couple of months ago”. He told me the vehicle in question had been sold to (redacted) “a couple of weeks” ago for £(redacted), albeit it had not been handed over because the full sum was, as yet, unpaid. An invoice dated 8 April 2023 was later produced, When pressed, he recalled it was Mr Gilliburn who told him of the termination. He said he had been surprised but had then stopped operating and that Chris (his driver) had been told to park up. He had described “hiring in” vehicles at £(redacted) per day from (redacted) and from (redacted) to remove stone, rubble and soil from cleared demolition sites.

When Andrew Gilliburn gave evidence there seemed much greater clarity about both the renewal process of the old licence and the realisation that it had terminated. He had worked in the business since April 2021, when his appointment as TM on the old licence had been approved. He had been aware of the need for renewal and said the last instruction had been for the accountant to make the relevant payment to achieve renewal. He had found out about the termination when he contacted the Office of the Traffic Commissioner seeking to satisfy undertakings previously given in respect of the old licence. He had immediately initiated the making of the new application on 8 December 2022. He had spoken with Mr O’Halloran on, or shortly before that date, and had told him that vehicles could not be operated but conceded that the director “obviously” ignored that advice. He said he had assumed that his direction had been followed and therefore never checked that the vehicle had been parked up, nor looked at tachographs, as he believed there would have been no movements.

Asked about when the unlawful use of vehicles had to his knowledge ceased, Mr Gilliburn told me that subsequent analysis of tachograph charts showed that had been in mid-March 2023. He said that it was at this point that it had become clear when the director was challenged by him about continued usage, that Mr Gilliburn had been told by the director that he (the director) had believed that an interim operator’s licence had been in force.

Notwithstanding that Mr Gilliburn accepted that he was misled by the director, and that the trust between them had been undermined, he was prepared to continue his association with him, as he felt some responsibility for the failure to renew the old licence.

I was told the operator understood that the nature of work to be carried out would require only a Restricted licence. Tenders for work carried out under the old licence required structures to be demolished, that the materials produced would then pass into the ownership of the demolition company, who would be responsible for its removal from the site. Work would not be considered complete until the site was signed-off as “cleared”. A single invoice would be issued for the whole activity, no separate fee was charged for transportation. The demolition materials would be taken by the operator directly to a waste transfer facility for processing there. No financial gain (or cost) would accrue to MH Excavations for this immediate transfer to the waste processor: his arrangement was said to be an entirely cost neutral transaction. In its view, this was simply a movement of the company’s own goods, not transport activity for reward.

5. Findings

Even allowing for the inevitable stress of a Public Inquiry, Michael O’Halloran struggled in the setting. I drew very little confidence that despite his long involvement in the industry that he had a clear understanding of the expectations of a licence holder. He did however admit that administration was not a strength. He downplayed his failures as a director, describing “mistakes” which encompassed not notifying the change in the company’s contact address and continuing to use a vehicle for an extended period beyond the termination of the licence and therefore unlawfully. His oral evidence that the use of the vehicle had ceased when he said it had was simply untrue. It was apparent from the ANPR evidence that use of the vehicle had continued right up to a date only a fortnight before the hearing. In total a period of 7 and a half months since the termination; or some 24 weeks since the current application was made.

Whilst financial standing was comfortably met and the absence of recent prohibition was a positive, the first time MOT pass record on the old licence was awful and had showed no real sign of improvement. The involvement of Andrew Gilliburn, a qualified TM, was a benefit but despite his presence since April 2021, the circumstances leading to the hearing for the old licence had not been prevented.

As to the proposed use of vehicles for its described business model under a Restricted licence, I have concluded that it is more likely than not a Standard operator’s licence would be required.

The provisions of Section 3(3) of the Goods Vehicles (Licensing of Operators) Act 1995 (the Act) provide as follows:

“A restricted licence is an operator’s licence under which a goods vehicle may be used on a road for the carriage of goods for or in connection with any trade or business carried on by the holder of the licence, other than that of carrying goods for hire or reward”.

The importance of holding the correct category of licence is also underlined by Section 3(6) of the Act, which makes it a criminal offence to carry goods for hire or reward under a restricted licence.

The Upper Tribunal decision in the case of Parker Body Repairs Ltd (2020/020) confirmed that in answering questions about the nature of the licence required, or whether any exemption applied that the overall business model of the company should be considered including the extent of its transport activity.

The Senior Traffic Commissioner’s Statutory Guidance Document No. 0 addresses this issue, at paragraphs 50-54.

Under this applicant’s business model, I find that whilst it states that it would only carry goods that have become its own (the result of the demolition activity it has carried out), the waste materials do not remain the operator’s own property for any longer than the period it takes to transport them to a third party’s waste transfer facility. MH Excavations engages in no conversion of the materials, nor any processing of them itself, which might imply that a Restricted licence was suitable. Whilst transport might not be the main activity carried out by the business, as Mr O’Halloran stated in evidence, clearance activities by its tipper were integral to its work, indeed until the site was signed off as cleared, its invoice is not paid. The invoice might not refer to transport, but clearance undertaken by it using large goods vehicles would necessarily be central to its work. In reality, work carried out under any invoice would encompass both its demolition activity and a payment for carrying away and disposing of the materials. In a scenario where the demolition company were contracted only (say) to demolish buildings but to leave all the materials behind, it is inconceivable that the contract price would not be less than MH envisages under its business model. I conclude therefore that the carrying proposed does result in payment, direct or indirect, which benefits the owner and user of the vehicle.

6. Consideration and Decision

This is of course the company’s application, and the onus is on it to satisfy me that it has the necessary fitness to hold the licence, that arrangements for the running of vehicles are sound, and that there is a sufficiency of financial resources to ensure that vehicles will be operated in fit and serviceable condition.

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 to hold a Restricted licence. 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 that the fitness requirement is not met. I cannot presently look beyond the circumstances in which vehicles have been operated, when they have been for so long, unlawfully. I struggle to accept Mr Finnegan’s contention that Mr O’Halloran has been guilty of no more than “wilful blindness”, “hoping everything would be okay” and “burying his head in the sand”, when Mr Gilliburn gave clear notice that the vehicle needed to be parked up in December 2022.  I can barely give any credit for the cessation of that unlawful use, as it would appear it came only a matter of days before the hearing. I find that the wrong type of licence has been applied for and that concerns about the arrangements for the safe operation of vehicles raise real concerns. I conclude that fair competition will have been prejudiced by the continued use of a large goods vehicle when no licence was in force.

Whilst the readiness to deploy a newer vehicle, on what is accepted might be a single vehicle licence demonstrates some level of realism, there is as yet no evidence of rehabilitation or restoration of his fitness on the part of Michael O’Halloran, as the guiding mind of this operation.

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

I offer my apologies for the lateness of this written decision, occasioned initially by my absence on annual leave after the hearing and whilst the operator was provided with an opportunity to make representation about the further ANPR evidence.

7. Note

If the bank balances held by this company are anything to go by, this is a business that can be profitable, could provide employment for others and which does not appear to have suffered unduly, because of the claimed need to use other contractors to keep the business going.

The applicant’s acceptance from the outset that it might be difficult for Mr O’Halloran to satisfy the requirements for an immediate licence does deserve some credit. I am prepared to provide guidance on the question of what would be required, if further application were made involving Michael O’Halloran.

I would be looking for evidence that the quality of decision making would be assured by the presence and active involvement of others at director level with some experience and understanding of operator licensing expectations, who would not simply be a cipher for him.

For the reasons outlined, I find that a Standard licence would be required for the business model described to me. If the application were made on that basis, plainly a TM would be required, which would in turn provide additional confidence, but only if such an appointee was fully engaged and enjoyed an open and transparent relationship with the directors. The undertakings in respect of Pre MOTs and roller brake testing (laden at every other check) would need to be readily agreed.

There would be a need to provide documentary evidence of the means by which the applicant business met its transport requirements in the whole period up to consideration of any application.

Simon Evans

Deputy Traffic Commissioner

for the North West of England

7 July 2023