Decision for PHS Group SW Ltd (OH2077200)
Source: gov.uk (2025-03-04)

Written decision of the Traffic Commissioner for the West of England for PHS Group SW Ltd

WESTERN TRAFFIC AREA

PHS GROUP SW LTD OH2077200

AT A PUBLIC INQUIRY IN BRISTOL 6 February 2024

DECISION OF THE TRAFFIC COMMISSIONER

Decision

The applicant fails to meet the mandatory requirement of fitness to hold a restricted goods vehicle operator’s licence. Section 13B is not satisfied.

The application is refused.

Licence OH2027911 was surrendered unlawfully. That surrender is set aside and I propose to revoke that licence, pursuant to Section 27(1), lack of financial standing and professional competence.

BACKGROUND

This is an application for fifteen vehicles on a restricted licence for a tool and plant hire company. It was submitted on 27 September 2024, but was incomplete at that point. The applicant director at that time was Ms Carmel Anne Parker. No operator licensing history nor insolvency history was declared on the application form. Noting that this was an application for a relatively large authority for a new start business, the applicant was asked for an explanation on 4 October 2024. Ms Parker responded on 10 October: “this is because we are taking over the business and operation of a local company with a number of depots. We will be employing a Transport Advisor who has previously been a Transport Manager for a similar operation”.

Licensing staff then noted what appeared to be links to licence OH2027911 Purple Hire Solutions Ltd which was surrendered on 7 November 2024 the surrender having been submitted by the director Ashley Parker:

• Similar number of vehicles authorised 13 vehicles on the old licence and 15 vehicles on the new licence

• Same nature of business

• Same registered address

• Same correspondence address

• Same contact number xx-xxxx-xxxx

• Same last name of the director on this application (Carmel Parker) and one of the listed directors (Ashley Parker)

• Same 5 operating centre addresses listed.

• Same tachograph analysis external contractor

• Same safety inspectors

• The name of the company’s “PHS Group SW Ltd” and “Purple Hire Solutions Limited”

The applicant was asked for an explanation of these apparent links by letter dated 29 November in the following terms:

• Please provide details of any links between this application, the company (PHS Group SW Ltd) and yourself (Carmel Parker) with OH2027911 PURPLE HIRE SOLUTIONS LTD, Mr. Ashley Parker and Mr. Stephen Smith.

Ms Parker responded the same day:

PHS Group SW Ltd was established as part of a business restructure whereupon it purchased the assets and goodwill of Purple Hire Solutions Ltd from FRP Advisory who act as Administrators.

FRP Advisory offered the business of Purple Hire Solutions Ltd for open market sale and a number of interested parties placed bids. Ultimately PHS Group SW Ltd were the successful bidder.

I was not a director of Purple Hire Solutions Ltd but did hold a minority share. My husband Ashley Parker was a Director (no shareholding) alongside Stephen Smith who was the majority shareholder.

Stephen is neither a shareholder, nor director, of PHS Group SW Ltd nor does he have any role or capacity within the business going forward.

The application was referred to me. The caseworker noted from the Notice of Administrators Proposals on Companies House that the applicant had bought the assets of Purple Hire Solutions Ltd for £155,000 and those assets had been valued at £396,000. I was reminded that Purple Hire Solutions Ltd was itself granted at a hearing following the insolvency of YHC Hire Services Ltd with a deficiency of £7.3 Million. Of that, £5.2 Million was expected to be novated to Purple Hire Solutions Ltd leaving a deficiency of £2.1 Million of which £680,000 was owed to the public purse.

I decided to determine the application at public inquiry. I requested ANPR evidence for the vehicles previously operated. There was no evidence of any unlawful use.

THE PUBLIC INQUIRY

Carmel Parker, Ashley Parker and Elka Palmer attended represented by Paul Atkinson, transport consultant. Mr Atkinson told me that the requested authority had reduced to nine vehicles with an upgrade to a standard licence. As fitness is not materially different from repute (see T/2018/10 C Ingram t/as T.I.P. Skips), I decided to continue with the hearing; any upgrade could be dealt with subsequently. I was further told that Ashley Parker was to be added as a director.

Proceedings were recorded and a transcript can be made available on request. I record here only that which is relevant to my decision.

The evidence of Carmel Parker

Ms Parker told me that she had been a 23.5% shareholder of Purple Hire. Her role had been credit control, HR and customer service. That had broadened and she now spoke with drivers and depot managers every day. Transolva (a transport consultancy) had assisted with the application which had been made quickly. Ashley had not wanted to be a director as he did not want to give a personal guarantee but the funders had insisted. Their home was now up as collateral.

Her knowledge of operator licensing had increased through attending an operator licence awareness course. She had met with the maintenance provider and involved Elka in that. She and Elka had joined a women’s transport manager forum.

PHS did not have the debt burden that had come across from YHC to Purple Hire. Family members had lost around £140,000 in Purple. They were spending about £7,000 a month on transport. Outside transport was not sufficiently flexible to respond to customer needs.

Noting the 23.5% shareholding in Purple, I took Ms Parker to question 10(4) in the application form: “Has anyone you’ve named ever been involved with a business that has gone or is going in to administration or a Company Voluntary Arrangement?” to which she had answered “NO”. I reminded her that she had confirmed on the application form that she was “aware that [the applicant] must tell the Traffic Commissioner immediately of any insolvency proceedings that occur between the submission of application and a decision being made”. Ms Parker could not explain other than to say that the application had been compiled by Transolva at a very stressful time.

The evidence of Ashley Parker

Steven Smith’s role in Purple had only been as a turnaround consultant. He was dealing with the administrator. Mr Parker had hoped that only Carmel would be a director on PHS but the funders insisted they both were and that both gave personal guarantees. That put their home at risk which he had not wanted. The funding had novated across from Purple to PHS and guarantees had now novated too.

Purple had suffered from the pandemic and had not been trading long enough to benefit from any Covid loans. It had also been hit by “phosphate issues” (which had impacted housebuilding locally). They had tried to work out a repayment plan for HMRC but failed. If the company closed, thirty-seven people would lose their jobs. Mr Parker accepted that the Crown had suffered a combined £1.3 Million shortfall as a result of the two sequential insolvencies.

I asked about the surrender of Purple’s operator’s licence. He had been told by Transolva that surrender was easy. He hadn’t been aware of the Regulation 31 procedure for the administrators. I noted that the company had entered administration prior to his submission of the surrender so it was not valid.

The future relied upon the operator’s licence. External transport was too expensive, 3.5 tonne vans too small. Somerset Council had agreed phosphate neutrality plans so housebuilding could start again.

Closing submissions

Mr Atkinson referred me to the letter in the bundle from Steven Smith and the 4-page document setting out the history of Purple Hire. There was every likelihood that the business would succeed in the future. Carmel Parker was keen to get the transport right and had really taken on-board what she had learned from the course. Their home was on the line. Pre-pack administrations happened all the time.

FINDINGS OF FACT

Positive findings

ANPR evidence showed minimal use of the vehicle fleet following surrender of the licence of Purple Hire Solutions Ltd. What use there was is consistent with attendance at maintenance providers or other legitimate reasons to move the vehicles. I am content that there has been no unauthorised use of heavy goods vehicles.

There are no concerns with the recent compliance of Purple Hire Solutions Ltd nor with the proposed transport manager (for the upgraded licence) Elka Palmer.

I find from the letter submitted by Steven Smith that it is likely that efforts were made to make time-to-pay arrangements with HMRC. I can make no stronger finding as there is no supporting evidence.

The company suffered from the Covid pandemic as did many others, but the impact was heightened due to its recent start-up. As it had, essentially, continued the business of YHC, less the Crown and some other debt, it had many of the liabilities of an established undertaking without the relevant government support.

Negative findings

It emerges from the letter of support from Steven Smith that the company preferred some creditors to others. Mr Smith says “Trading conditions weakened in 2024 and the Company had to conserve its cash to meet payroll and critical suppliers. As a result liabilities to HMRC grew”. That was a clear decision to default on Crown liabilities in preference to paying suppliers on whom the business relied, and no doubt continues to rely.

That is not the first time that some suppliers have been preferred over the taxpayer. From the applicant’s potted history, I note that, following the insolvency of YHC, the, then new business, Purple Hire, “had pledged to pay the previous business trade suppliers £450K “supplier legacy debt””. No such attempt to repay the £680,000 owed to the public purse was made.

From the Statement of Affairs for Purple Hire, I note that the company had a shortfall to HMRC of £818,253. In six years, the business exploits of the Parker family have cost the UK taxpayer £1.5 Million.

Carmel Parker made, or allowed to be made on her behalf, false statements on the application form in relation to her involvement, as a 23.5% shareholder, in a company that entered administration. She made a similarly false statement that the applicant company had not bought the assets of a company entering liquidation. Those false statements sought to hide the link to the family business entering insolvency. The timing of the application was such that it could have been expected to have been granted before the existing business entered insolvency. It was only down to the tenacity of the licensing staff to identify the links that the plan failed.

The assets of Purple Hire were acquired by the applicant at significantly less than their market value.

Ashley Parker is now a statutory director and his history becomes relevant. He failed to declare the changes in the financial position of Purple Hire when he had known about them for some considerable time. Given the period of time that money had failed to be paid to HMRC when due, I find conservatively that Purple Hire could not meet the financial standing requirement for its standard licence for, as a minimum, one year. I take that from the statement in the letter of support from Steven Smith which says “After being unable to meet HMRC payments in late 2023, HMRC formally cancelled the latest time to pay agreement and the Company tried but was unable to reach a new agreement.” From that point, any money in the bank account was not available to satisfy financial standing but owed to the public purse.

Neutral findings

Ashley Parker signed surrender for the licence of Purple Hire Services Ltd after he had ceased to have authority to do so. There was no benefit to him in doing that (whether he thought there might be, I do not know). It had the effect of bringing the old licence to a prompt end and prevented unlawful use of the fleet.

Ashley Parker was neither a director nor shareholder of the applicant company at the time the application was made.

DETERMINATION

In Aspey Trucks Ltd 2010 – 49, the Upper Tribunal comments on the difference between finding a loss of repute in an existing haulier and whether or not a new applicant to the industry met the standard to be of good repute:

“In a case such as this, the Deputy Traffic Commissioner was not looking at putting someone out of business. Rather, he was deciding whether or not to give his official seal of approval to a person seeking to join an industry where those licensed to operate on a Standard National or Standard International basis must, by virtue of S.13(3), prove upon entry to it that they are of good repute. In this respect, Traffic Commissioners are the gatekeepers to the industry - and the public, other operators, and customers and competitors alike, all expect that those permitted to join the industry will not blemish or undermine its good name, or abuse the privileges that it bestows. What does “Repute” mean if it does not refer to the reasonable opinions of other properly interested right-thinking people, be they members of the public or law-abiding participants in the industry?”

The same principle clearly applies to fitness in relation to an application for a restricted licence.

Ashley Parker failed to notify of the obvious lack of financial standing. In T.2008/41 Brian Hill Waste Management Ltd, the Transport Tribunal found that directors are likely to be on notice of the failure to meet the mandatory requirement of financial standing before administrators are engaged. I found above that financial standing was not met from the point that the arrangement with HMRC failed in 2023. That is a significant negative feature in considering this application now that Ashley Parker is a statutory director.

The Parker family business has gained liquidity to the sum of £1.5 Million at the expense of the UK tax-payer. That is clear unfair competition and makes the applicant unfit to hold a restricted goods vehicle operator’s licence. For the avoidance of doubt, it would also fail to establish good repute.

The family businesses have, on two occasions, preferred to make payments to “critical suppliers” rather than meet their tax liabilities. That is unfair competition and means that the applicant company, now constituted of two family members, is unfit to hold an operator’s licence.

Section 13B, fitness, fails to be satisfied. The application is refused.

Licence OH2027911 was surrendered unlawfully. That surrender is set aside and I propose to revoke that licence, pursuant to Section 27(1), lack of financial standing and professional competence.

Kevin Rooney

Traffic Commissioner

14 February 2025