Decision

Decision for Xtreme Scaffolding Services Ltd (OC2069289)

Published 14 May 2024

0.1 In the North Western Traffic Area

1. Confirmation of Oral Decision of the Deputy Traffic Commissioner

2. Public Inquiry held at Golborne on 10 April 2024

3. Operator: Xtreme Scaffolding Services Ltd (OC2069289)

4. Introduction

Xtreme Scaffolding Services Ltd (“the applicant company”) applied on 13 October 2023 for a new restricted goods vehicle operator’s licence authorising the use of 2 goods vehicles.

The applicant company was incorporated in April 2022. The directors since incorporation have been Stephen Procter and David Barson

The application form submitted disclosed that the directors had involvement with 2 previous licences:

•       a restricted licence OC1072461 held by a previous company also named Xtreme Scaffolding Services Ltd

•       a restricted licence OC2008565 held by XP Scaffolding Ltd

The application form also suggested that the directors had been involved in an insolvency, but no further details were given.

The original Xtreme Scaffolding Services Ltd was incorporated in 2007 and Mr Barson was its sole director until it was dissolved in March 2021. That company held a restricted goods vehicle licence between 2007 and September 2022 when it was terminated following a failure to pay the renewal fee. The dissolution of the company a year earlier had not been notified to my office.

XP Scaffolding Ltd was granted a restricted licence following a public inquiry in 2018. The hearing was called to consider the company’s fitness because of the history of a previous director. Mr Procter was the sole director at the time. After assurances were given that the other person was not involved, the licence was granted in April 2018. Mr Barson was appointed as a director alongside Mr Procter on 3 April 2018, the same date that the licence was granted.

XP Scaffolding Ltd entered liquidation on 5 October 2023 shortly before this application was submitted. Its operator’s licence remained active at the time. The directors had not informed my office of any change in XP Scaffolding Ltd.’s circumstances. Following the receipt of this application, my office identified the liquidation of XP Scaffolding Ltd and a proposal to revoke the licence was sent to the administrators. No response was received but unfortunately this appears to have been overlooked until my preparation for this hearing. At my direction, the licence of XP Scaffolding Ltd OC2008565 was revoked on 2 April 2024.

A liquidator’s report disclosed that XP Scaffolding Ltd owed its creditors a total of £120,743, including £52,787 owed to HMRC and the bounce bank loan of £45,000.

In correspondence with my office, the applicant company apologised for the failure to disclose the insolvency claiming the directors believed the administrators were responsible for that notification.

These matters prompted the concern about the fitness of the applicant company and its sufficiency of financial resources that led to the decision to examine the application at a public inquiry.

Other than the matters referred to above, I was not made aware of any other public inquires or referrals to a Traffic Commissioner involving the applicant company or its directors.

5. The Call to Public Inquiry

The applicant company was called up to public inquiry by letter dated 12 February 2024.

The call up letter gave notice that the specific requirements of Sections 13B and 13D of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”) were to be considered.

6. The Public Inquiry

The Public Inquiry was heard at Golborne today. The applicant company was represented by its directors Stephen Procter and David Barson.

7. Evidence

In advance of the hearing, I was provided with recent financial evidence on behalf of the applicant company. This showed availability sufficient available financial resources to meet the statutory requirement in Section 13D for this application.

I was also provided with written representations submitted by Mr Barson on 4 April 2024. These contained a further explanation for the insolvency of XP Scaffolding Ltd. Mr Barson repeated that they were unaware that they were required to surrender the previous licences. Mr Barson said that he had now booked on that day (4 April 2024) for Mr Procter and himself to attend an operator licence awareness course. I was provided with some generic examples of compliance documents that the applicant claimed it would adopt. I was not provided with any evidence of past compliance for the previous licence.

I also received evidence from DVSA disclosing 241 ANPR sightings of a vehicle GF62 NHO that was previously on the XP Scaffolding Ltd licence. The sightings were consistent throughout the period between the company entering liquidation on 5 October 2023 and 31 March 2024 and suggested the vehicle remained in use.

In evidence today Mr Barson said that the previous company named Xtreme Scaffolding Services Ltd had been dormant since he joined Mr Procter in the business of XP Scaffolding Ltd in the spring of 2018. It had not operated vehicles since that date. Mr Barson said he subsequently asked his accountant to dissolve the company in 2021. He did not inform my office of these changes as he overlooked the requirement to do so. This as despite the fact that he was aware that the linked licence of XP Scaffolding Ltd was under scrutiny by the Traffic Commissioner at the time Xtreme stopped operating. That did not prompt Mr Barson to consider notifying my office of the change in circumstances.

Both Mr Procter and Mr Barson insisted that it was a coincidence that the latter was appointed director of XP Scaffolding on the same day the licence was granted. Mr Procter admitted that he had not mentioned Mr Barson’s proposed involvement in the company to the Traffic Commissioner at the public inquiry or elsewhere during the application process.

I was told that XP Scaffolding’s demise started when the bank froze its bank accounts in around September 2023. Both Mr Procter and Mr Barson claimed they were unaware that they were required to notify such material changes to my office.

It was conceded that the applicant company applied for its licence in order to be able to continue the scaffolding business of XP Scaffolding.

The directors confirmed that it had bought the two goods vehicles previously on XP Scaffolding’s licence. Mr Procter then volunteered that they had started to use the vehicles again knowing they had no lawful authority to do so. He said they felt forced to do that as their customers were complaining about the level of service and they feared losing more staff.

The ANPR evidence for GF62 NHO was accepted. Mr Procter said the use was not daily but conceded the vehicle had been used on at least 50 separate days since October 2023. The use only ceased last week when the ANPR evidence was disclosed to the applicant company.

Mr Procter also admitted that a second goods vehicle MX55 NSJ had also been used regularly by the applicant company since October 2023. That is even more of a concern as records show its last MoT expired on 30 June 2023 and it has not been presented for test since. Mr Procter insisted that the vehicle had a valid test but was unable to produce evidence of that assertion despite being allowed time to do so.

Mr Barson and Mr Procter said they were yet to book attendance at an OLAT course despite the assurance given in the email dated 4 April 2024. That correspondence was apparently drafted by a Transport Consultant. They blamed the consultant for failing to submit their evidence 14 days before the hearing in accordance contrary to the directions contained in the call up letter.

In their closing submissions, both directors apologised for the unauthorised use of the vehicles and stressed that their business would not be able to continue without being able to operate goods vehicles.

8. Determination

The concern about the application and the fitness of the applicant company and its directors was initially focussed on the failure to notify the Traffic Commissioner of material changes to the previous licences that were held by companies with Mr Barson and Mr Procter as directors. Most seriously this related to the failure to notify my office of the serious financial difficulties faced by XP Scaffolding Ltd and its ultimate liquidation.

I remain troubled by the quick succession of events between the liquidation of XP Scaffolding and the new application made by Xtreme Scaffolding Services Ltd. The arrangements as described appear to bear many of the hallmarks of the unacceptable business practice referred to as use of “Phoenix” arrangements to avoid previous liabilities.

During the hearing, a further serious issue has come to light namely the admitted unlawful and unauthorised use of two goods vehicles whilst this application was pending. The directors clearly knew that they should not have operated those vehicles without authority, and it only ceased when they realised the ANPR evidence had caught them in the act.   The use of the vehicles has been consistent since XP Scaffolding entered liquidation in October 2023 with Mr Procter conceding it involved at least 50 separate days of use.  

The decision of the Upper Tribunal 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. The Senior Traffic Commissioner’s Statutory Document Number 1 also guides that,

“Traffic commissioners are entitled to conclude that a person does not have the required repute where they have decided to operate without authorisation … particularly in the face of warnings not to”

and refers to the Upper Tribunal’s previous clear decisions on such matters in cases such as West Mix Limited 2005/537 and Duncan Brodie (t/a Duncan Brodie Transport) 2002/027.

The position here is aggravated by the response sent to my office on behalf of the operator on 19 December 2023 claiming that only a 3.5ton vehicle was being used for the transport needs of the business. I note the call up letter on 12 February 2024 contained a further prominent warning that there was no authority to use a goods vehicle until the licence had been granted.

The position is further aggravated by the fact that one of the vehicles used without authority has not been submitted for an annual test since 2022 and its MoT certificate expired in June 2023.

Having made these findings of fact, I turn to consider what confidence I can have in the applicant company’s ability to be compliant in future under the control of Mr Procter and Mr Barson. The directors sought to blame their past shortcomings on a lack of knowledge, but they have taken no steps to begin to address that issue. Despite having 2 months’ notice of this public inquiry, they have not even taken the basic step of booking an operator license awareness training course.

In view of all these findings, I must inevitably find the applicant company has failed to demonstrate it meets the requirement in Section 13B of the Act not to be unfit and the application is refused.

The applicant company and its directors have the right to make another application in future. However, tangible evidence will need to be provided if Mr Procter and Mr Barson are to regain the trust of a Traffic Commissioner. The bare minimum would be completion of a formal OLAT course supported by evidence of continuing support from a transport consultant or similar.

Gerallt Evans
Deputy Traffic Commissioner

10 April 2024