Allied 4 Vans | Mike Hourigan | Fake Invoice for Damage to Van

Keywords: Allied 4 Vans – van hire – Mike Hourigan – damage to van – bogus invoices.

Abstract:

In September 2017, a friend (‘R’) hired a van from Allied 4 Vans. The van had 36,000 miles on the clock at the start of the hire and the clutch failed after another 250 miles. Allied 4 Vans invoiced R £1,158 for a completely new clutch and made an unauthorised debit from his bank account. R sued Allied 4 Vans. He got all his money and court costs: the judge decided the evidence from Allied 4 Vans – and its director Mike Hourigan – was wholly unconvincing.


Allied 4 Vans premises in Castleford


1. Introduction

Allied 4 Vans (Hire) Ltd (company number 08807616) is based at 2 Lock Lane, Castleford, West Yorkshire, WF10 2JU. The directors and shareholders are Michael (Mike) Hourigan and Loretta Hourigan.

On 8 September 2017 my friend (‘R’) hired a Ford Transit van, registration number EA16 DVN for seven days. He paid £325 for the hire and £200 deposit. The van had over 36,000 miles on the clock when it was hired.

Three days into the hire period – after 252 miles – the van broke down. The clutch failed completely. The van was recovered by the AA to Allied 4 Vans’ premises in Castleford.

Allied 4 Vans issued R an invoice for £1,158. It kept R’s £200 deposit and made an unauthorised withdrawal of £848 from R’s bank account.

Mike Hourigan’s position was that ‘driver abuse’ by R and another named driver caused the clutch to fail and R should pay the full cost of a brand new clutch. R tried to negotiate but got nowhere. Hourigan was sure he was in the right and oblivious to reason. He could not grasp basic arguments, like: even if R had abused the clutch so as to cause it to fail, R should not have to pay the whole cost of a brand new clutch because it had done 36,000 miles already.

R tried to use the British Vehicle Rental and Leasing Association (BVRLA) conciliation service to resolve the dispute. The BVRLA were completely useless. You can read about R’s complaint to the BVRLA here. R issued a small claim against Allied 4 Vans. The trial was at his local county court in March 2018.

2. The Trial

The parties had to file evidence before the trial. There were a number of problems with the evidence submitted by Allied 4 Vans. The main one related to the dates on the invoices for the replacement of the clutch.

Allied 4 Vans’ invoice to R for the new clutch – including parts and labour – was for £1,158 including VAT and dated Monday 11 September 2017. The money was debited from R’s bank account within a few hours of the van being recovered on 11 September 2017.

The witness statement from the mechanic Allied 4 Vans paid to replace the clutch said that he examined the van on Thursday 14 September 2017 – three days after Allied 4 Vans had invoiced R for the parts and labour. The mechanic decided that the clutch needed replacing. His invoice to Allied 4 Vans for replacing the clutch was dated 14 September and for £1,158 with no VAT. Labour was £277.20 and parts were £888.80. There was no information about which parts had been replaced or an invoice showing which parts had been bought.

R got an independent mechanic to check the cost of parts needed to completely replace a clutch (clutch, dual mass flywheel, etc) using genuine Ford parts from the authorised Ford main dealer. The cost was £510.55 including VAT which is £378.25 cheaper than Allied 4 Vans’ mechanic charged.

At trial, the judge was puzzled – to say the least – as to how Allied 4 Vans could invoice for parts and labour for a replacement clutch on the Monday when the mechanic did not inspect the van and decide which parts needed replacing until following Thursday. And why did the mechanic charge £888.80 for parts which should have cost £510.55? And how come Allied 4 Vans (which was VAT registered) charged £1,158 including VAT when the mechanic had charged £1,158 with no VAT (he was not VAT registered)?

The answer, of course, is that the invoice created by Allied 4 Vans on Monday 11 September was fake: it was created to defraud R of £1,158. And, when R sued, Allied 4 Vans had to get their mechanic to produce a fake invoice which supported Allied 4 Vans’ invoice. But: because the mechanic was not VAT registered, he could not charge VAT. And he had to inflate the price of the parts to match Allied 4 Vans’ invoice.

Giving judgement, the judge said ‘I am wholly unconvinced by the defendant’s arguments put forward with regard to invoicing’ and ‘none of it fits together whatsoever.’

Part of the reason R won his claim was that Mike Hourigan was too stupid to see the problem with the invoices before the trial. He only realised the problem when the judge was asking questions to the mechanic – ‘How was it that Allied 4 Vans could issue an invoice on the Monday when you did not see the van until Thursday?’ When Hourigan realised the problem he panicked and tried to get the mechanic to change his evidence. He interrupted the judge and called out to the mechanic across the court: ‘No! Don’t you remember that you came to look at the van on the Monday!’ The look on the judge’s face when this happened was priceless.

My concern is that R might not have succeeded if it was not for Hourigan’s stupidity. If Allied 4 Vans waited a few days to issue its invoice, or got the mechanic to date his invoice to match Allied 4 Vans’ invoice, it would not have been obvious what had happened. And – although Hourigan was stupid this time – he is clever enough not to make the same mistake again. Next time he tries to deceive a customer, Hourigan will get the dates on the invoices to match. Someone else who hires a van with a dodgy clutch from Allied 4 Vans will find they get hit with an extortionate bill for damage they have not caused. And, if they sue, the dates on the fake invoices will tie-up nicely.

3. Mike Hourigan’s previous business

I was worried that suing Allied 4 Vans was a bad idea because a previous company run by Michael Hourigan and Loretta Hourigan had gone into liquidation owing significant amounts of money. R might win his claim and find there was no company to pay him damages.

Michael Hourigan and Loretta Hourigan were directors of a previous company called Allied 4 Vans Ltd (company number 05919420). The company seemed to be doing fine according to the accounts filed at Companies House in January 2013. It did not file accounts in January 2014, but instead was wound up. When it was liquidated, the company had no assets – absolutely nothing – and owed £66,000 to the new company (Allied 4 Vans (Hire) Ltd) and £35,000 in VAT to HMRC.

A fortnight before the decision to wind up the previous company on 23 December 2013, the new company Allied 4 Vans (Hire) Ltd was incorporated on 9 December 2013. The new company filed unaudited accounts in 2015 and 2016 and these accounts did not refer to any loans made to the company by directors. The new company was late filing accounts in 2017: they were due on 30 September 2017 but not filed until 30 November 2017. A failure to file accounts is sufficiently serious to be a criminal offence under section 441 of the Companies Act 2006. When the accounts were finally filed, they revealed – for the first time – outstanding loans made by the directors to the company of £1.2 million.

I got someone I know who is an expert on company accounts to look what happened and he had serious concerns: where did all the assets from the first company go? How did the first company manage to owe the second company £66,000 when there was only a fortnight between the winding up of the first company and the incorporation of the second company? Where did the assets of the second company come from? Why did the Hourigans put £1.5 million of their own money into the second company having just seen the first company fail? Why were the directors loans not declared before the third set of accounts of the new company?

I asked Hourigan about what had happened but he refused to discuss the matter. We asked Hourigan and Allied 4 Vans’ accountants to see the company records but never received a response. Hourigan was obviously not keen on me finding out what happened.