CM bows out

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Peter Jackson reports on a public inquiry involving CM Coaches Ltd of Exeter, in which the company lost its O-Licence and its Transport Manager was disqualified following a number of maintenance failings

CM Coaches Ltd, located in Marsh Barton, Exeter, was formed in August 2014. At the time of this public inquiry (PI), it had an international O Licence for 12 vehicles with four Transport Managers listed on it: Colin Holt, who was in the role from the O Licence being granted in February 2015 until 9 June 2017; Andrew Poole, who took over and was in the role until 21 March 2018; Michael Hazell, who was active from 25 April 2018 until 10 December 2018; and Alastair Gray, who was nominated on 29 December 2018.

CM Coaches
Four of the company’s vehicles in the Marsh Barton yard. BEN BEAVER

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Besides acting as Transport Manager at CM Coaches for an eight-month period, Michael was also named as a director of Carmel Coaches Ltd along with his father Anthony Hazell and sister Carolyn Alderton, and held a sole trader licence. Both his licence and that of Carmel Coaches were revoked at a PI in June 2014, with him and his father also losing their good repute and being disqualified from holding any transport manager roles for 18 months.

Carmel Coaches had been operating in Exeter since the 1970s, but the lending of licence discs from Michael’s sole trader licence to Carmel Coaches, Michael’s failing to perform his role as transport manager (even claiming he’d forgotten he was one) and, in the words of TC Kevin Rooney, ‘numerous and serious maintenance shortcomings’ – including a brake defect which had been reported eight times before something was done and a jammed emergency exit which had not been fixed when it was flagged up – led to the PI being called.

Despite the evidence against the family and their company, TC Sarah Bell’s decisions (bar the revocation of the sole trader licence) were appealed, but the appeal was rejected in November 2014. At the hearing, Anthony Hazell accepted that the company had expanded too fast, adding: “Although this marks the end of a family business that has served the Exeter and West Devon area for 30 years, we have to accept the decision made despite its severity.”


Spotted in Seaton, Marcopolo-bodied VDL FA07XEH. BEN BEAVER

Only two months on from the PI which would ultimately seal the fate of Carmel Coaches, an application was made for a new O Licence under the name ‘CM Coaches Ltd.’ The application immediately caught the eye of the TC due to its similarities to Carmel, so was called to a PI. The family proposed to lease the vehicles and equipment from Carmel Coaches, rent its operating centre and carry out maintenance and safety inspections at the workshop formerly used by Carmel. Carolyn Alderton was made the majority shareholder in the new business.

Satisfied that CM would not repeat the mistakes of Carmel, the TC granted the application for 15 vehicles (although 29 had been sought), also ensuring that Anthony and Michael Hazell were barred from being involved initially. Michael’s prohibition was lifted at a PI in August 2016, with Anthony’s following that December.

Two years of seemingly trouble-free operation followed, but the operator was brought to the attention of the DVSA once again in 2018 following reports of an undeclared fire on a bus carrying children. Vehicle Examiner Ian Hassett conducted a maintenance investigation in response on 13 June 2018, and concluded that the company’s practices were unsatisfactory. Ian noted the following issues:

• There was a 14-week gap in preventative maintenance inspections (PMIs) for two vehicles, 12 weeks for another pair and nine weeks for one vehicle. Not all roadworthiness declarations were signed and brake test figures weren’t always recorded;
• Out-of-date first aid equipment and fire extinguishers were observed, along with a defective tachograph and a vehicle with a suspension warning light on. None of these defects were reported at PMIs or during driver checks;
• Sixteen of 36 MOT tests had been failed, including five brake failures;
• Decelerometer calibration expired;
• No management staff were on-site, leaving Ian unable to confirm the Transport Manager’s professional development; and
• Maintenance was not carried out in-house as described on the licence, but at Carmel’s workshop over 30 miles away – there were no under-vehicle inspection facilities at the CM yard.

The company removed its director and Transport Manager from the licence in December 2018, notifying the TC that it was being purchased by a third party and that they would be appointing replacements. That third party was Alastair Gray, formerly a director of Hookways Ltd (from 2006 until the company folded in 2011) and Hamilton Grays (Devon) Ltd (August to November 2011). The latter operator had its licence revoked at a PI in July 2018, while Alastair was Transport Manager. Outlining the reasons for the revocation, the TC described a “prolonged failure to meet the requirements of financial standing.” It is estimated the company still owes £660,000.

On 29 December 2018, CM proposed to appoint Alastair as Transport Manager and director of the company; all of the existing vehicles were also removed from the licence, replaced by six new vehicles – several of which the TC had previously spotted in Hamilton Gray livery. Finally, an application was made to change CM’s operating centre to the former Hamilton Gray site.

The TC received a letter from CPT Regional Manager John Burch in January this year, explaining the circumstances behind the O Licence changes.

Jonckheere Modulo-bodied Volvo B7R FN52HRO at Exeter coach station. BEN BEAVER

However, the TC thought it best to call the operator to a PI under the following terms:

• Under Section 17(1)(a) that the holder of the licence may no longer satisfy the requirements of Section 14ZA(2), namely that the licence holder no longer meets the requirement of:
– Section 14ZA(2)(a) to have an effective and stable establishment in Great Britain (as determined in accordance with Article 5 of the 2009 Regulation);
– Section 14ZA(2)(b) to be of good repute (as determined in accordance with paragraphs 1 to 5 of Schedule 3 of the Act);
– Section 14ZA(2)(c) to be of the appropriate financial standing (as determined in accordance with Article 7 of the 2009 Regulation); and
– Section 14ZA(2)(d) to be professionally competent (as determined in accordance with paragraphs 3 to 7 of Schedule 3 of the Act).
• Under Section 17(1)(b) of the Act and Section 14ZA(3) of the Act, that the nominated transport manager may not be exercising continuous and effective management of the transport operations;
• Under Section 17(3)(aa) of the 1981 Act, of the 1981 Act, that any undertaking recorded in the licence has not been fulfilled, specifically:
– That vehicles would be kept fit and serviceable; and
– That there would be effective driver defect reporting.

Colin Holt, Andrew Poole and Michael Hazell were also called to a PI to consider their good repute and professional competence as Transport Managers.

The public inquiry
First to give evidence at the PI on 4 March was DVSA Vehicle Examiner Ian Hassett. Although he’d had no further encounters with CM Coaches since conducting his maintenance inspection in June 2018, he said that their vehicle had been seen in service displaying the incorrect address on the legal lettering. He said that maintenance was conducted at the Northlew premises (owned by Carmel Coaches), with staff referring to separate branches of the company: Northlew (Carmel Coaches Ltd), Exeter (CM Coaches Ltd) and Bristol (sole trader Carolyn Alderton).

Anthony Hazell explained that inspections were carried out partly at Exeter, then completed at Northlew by a different member of staff – an approach which Ian found to be ‘flawed.’ The TC continued in his written decision: “An explanation that an MOT had taken place in lieu of a preventative maintenance inspection was also not acceptable. The operator’s explanation that new track rod ends had been fitted despite not having been identified as a defect was because MOT testers liked to see new components on a vehicle was also difficult to believe. In relation to the lack of brake test results on PMIs, the operator’s position was that this was due to a problem with the printer. Mr Hassett noted that the figures could still be recorded by hand and the sheets correctly completed.”

CM Coaches
T184AUA, a Van Hool Alizee-bodied DAF SB3000, travelling through Exeter. BEN BEAVER

Vehicle Examiner Ross Trott was next to provide evidence, outlining concerns relating to three vehicles in particular. FJ56KOH’s most recent decelerometer test was on 12 August 2018, at which point the mechanic noted that the calibration had expired. On 25 September, a brake defect was identified but no confirmatory brake test was conducted. YN08ZNP last had a PMI on 21 November 2018, and a roller brake test on 21 February 2019. The previous recorded brake test was on 30 May 2018. Finally, FA07XEH was taken into service before the wheels could be re-torqued, according to the mechanic; they were subsequently re-torqued three days later.

It was then the turn of Michael Hazell to give evidence. He told the court that, since his prohibition was lifted in May 2016 – following the Carmel Coaches PI outlined earlier – he had been simply driving and carrying out administrative tasks in the business. It wasn’t until July 2017 that he became a director, and until March 2018 that he was named as Transport Manager. He’d decided that working in the industry was no longer something he wished to pursue, so was no longer competing for contracts and was beginning to wind down the business to focus on training to be an airline pilot.

He knew Alastair Gray though, and was aware he was looking to get back into the industry – and it would be easier for him to purchase a going concern. So he agreed to sell CM Coaches for a ‘small’ sum.

In terms of maintenance, he said there was evidence of several roller brake tests each year for every vehicle, although there had been issues with printing the decelerometer readings. He said that two PMI sheets were used: a white sheet for topside checks (which were sometimes conducted at Exeter, sometimes at Northlew), and a blue sheet for under-vehicle inspections, which took place at Northlew.

“I asked about the new track rod ends being replaced when not reported as defective on any PMI,” wrote the TC. “Mr Hazell told me that, with an MOT coming up, he wanted to show work having been done. Mr Hazell accepted that his decelerometer was very temperamental and was near end of life. He now also had an old-fashioned Tapley meter. The vehicles were now all back with Carmel. Mr Hazell told me that he had never had a prohibition since he was Transport Manager, although he also had never been checked.”

Plaxton Cheetah-bodied Mercedes-Benz 0816D, WK07AOJ. BEN BEAVER

The TC also elaborated on the relationship between Alastair and Michael in his written decision: “Mr Hazell told me that he had known him for years. At times, they had been quite friendly, at others they just got on with their own businesses. He was to be paid £20,000 for the company. The sale was for the business, goodwill and any existing work that Mr Gray wanted to keep. No physical assets had changed hands. Routes had gone to Carmel. There were First Rail Support and Babcock contracts in place. Mr Gray could go straight in to working for them. I asked whether the contracts had a requirement to notify change in control – Mr Hazell said “possibly.” There were no issues with Devon County Council.”

Colin Holt, who had been director and Transport Manager of CM Coaches from the date the licence began to 18 November 2016, told the TC at the inquiry that there had been a disagreement over taking on the X46/47 service. Christopher Hilditch, the other director at CM alongside Colin, wanted the business to change direction and had sourced vehicles and ticket machines for the route, but major shareholder Carolyn Alderton didn’t support the move. Colin also told the TC that Michael Hazell had been running another vehicle from a nearby location, which was cause for concern. He claimed to have been unaware that his login details to amend the firm’s O Licence were still being used after his resignation.

Alastair Gray then gave a statement, confirming what had previously been said that the value of CM Coaches lay in the contracts it had secured. He had spoken to Devon County Council and they had confirmed that the contracts could be continued in his ownership. “He had paid a small amount to Mr Hazell at what was termed the point of ‘exchange’ on 28 December,” wrote the TC, “likening the process to exchange of contracts in a house purchase. Everything was now on hold. They had not operated at all until two-three weeks before the hearing date. The vehicles put on the licence in December had been disposed of and there were now two vehicles which had come from another operator. Maintenance would be undertaken by Budlake Commercials, of which he is also director and is based at the operating centre.” Alastair added that he had been “gut-wrenched” by the TC’s decision to revoke the licence of his former company Hamilton Gray, and was unsure about continuing in the industry until the opportunity to purchase CM Coaches presented itself.

The TC dealt with the case on the basis that the sale of the business had not been completed, and focused on the status of the business prior to 29 December 2018.

He went on to explain his doubts over Michael’s claim that he had no influence over CM Coaches before his ‘ban’ was lifted: “Mr Hazell seeks to write-off any history that predates his role as Transport Manager or director. In relation to him personally, that is understandable, notwithstanding that the – unchallenged – evidence of Mr Poole is that he had influence earlier than that. I cite as an example Andrew Poole telling me that he had concerns over the split inspection process which began in February or March 2017 but was given assurance by Mr Hazell that it was in order.”

Along with Vehicle Examiner Hassett, the TC was concerned that the white sheets used for topside vehicle checks were never intended to be seen by the DVSA, and that the blue sheets (used for under-vehicle inspections) painted a far more positive picture of the state of the company’s vehicles. One white sheet, which was presented as evidence to the TC for the PI, noted 16 defects with FA07XEH – eight of which weren’t dealt with. “The broken door glass and the handbrake chambers wound off, absent of any explanation, would appear to identify significant failures in maintenance systems,” the TC wrote.

“There are at least six defects that are driver-reportable. All this on an inspection sheet that the operator has decided to provide to me in evidence. The identification of the handbrake chamber wound off and the worn threads is inconsistent with the explanation that the white sheet is topside only (although the parking brake was presumably obvious from the vehicle not staying where it was put). Eight items are left unrectified but they are not recorded on the blue sheet dated two days later. Neither inspector troubles themselves with recording tyre tread depths. All in all, this paints an appalling picture.”

Pictured on the X46 service is Plaxton Cheetah 2-bodied Mercedes-Benz 0816D YN08ZNP. BEN BEAVER

The TC added that it was ‘of great concern’ that the company had chosen to discard its pre-MOT inspection reports. “Was this because of the number of defects reported?” he asked. “There is no sensible reason to discard the document. Mr Hassett’s report identifies further examples of gross inconsistency between the two inspections.

“I have never before come across an operator who undertakes part of a preventative maintenance inspection at one location on one day and then completes it at another location 30 miles away on another day,” he continued. “DVSA’s Guide to Maintaining Roadworthiness is clear that the content of an inspection is that of the relevant MOT. It now appears that the content of the inspection recorded in each of Mr Hazell’s records is far from that and I am asked to believe that the two inspections be aggregated in some way to form a single full inspection. If that is the case, how can FA07XEH be signed off as roadworthy by T Hazell on 9 March when 8 defects identified on 7 March have not been rectified? The whole approach is a nonsense and shows an entirely reckless approach by the operator CM Coaches Ltd and the Transport Manager Michael Hazell.”

Analysis by Vehicle Examiner Trott suggests that the company failed to meet the minimum frequency required by the DVSA for roller brake tests by a ‘long way.’ The TC added that Michael Hazell’s explanation that this apparent lack of testing was due to a printer malfunction (meaning records couldn’t be kept) was an ‘appalling excuse,’ due to the low cost of a replacement printer.

“So there is poor driver defect reporting, disjointed, at best, and poorly recorded vehicle inspections resulting in, amongst other things, a very poor MOT pass rate of 70%,” the TC continued. “All this points to a complete lack of management control by the operator and Transport Manager, and that is without going back to the earlier performance prior to summer 2017. Mr Hazell’s response to having this pointed out to him is to seek to blame others. My response is to find that his good repute as a Transport Manager is lost.”

He also questioned Alastair Gray’s reasons for purchasing CM, given that all of its registered services had been cancelled and the operating centre, staff members and vehicles didn’t transfer. “I conclude that the only real value in the purchase of CM Coaches Ltd lay in its operator’s licence,” the TC said. “By buying the company, and the licence, Mr Gray has side-stepped the scrutiny that applies to new applicants.” With all of this in mind, the TC found that CM Coaches Ltd has lost its good repute.

The final decisions reached were as follows:
• Pursuant to findings under Section 17(3)(e) of the Act, material change, in that virtually nothing remains the same, and Section 17(1)(a), good repute, the licence is revoked with effect from 23:59, 27 April 2019.
• Pursuant to findings under Schedule 3 of the Act and Article 2 of EU Regulation 1071/2009, Michael Hazell has lost his good repute as transport manager and is disqualified from acting as such in any member state for a period of three years.
• On a finding of loss of professional competence, I propose to revoke licence PH1140601, Michael James Hazell.