West Midlands Traffic Commissioner Nick Denton revokes O-licence of North Warwickshire Travel Ltd, trading as People Movers and disqualifies Michael James as a Transport Manager
A failure to operate local bus services in accordance with the law was among the factors which led to the revocation of Midlands operator’s O-licence by Nick Denton, Traffic Commissioner (TC) for the West Midlands.
North Warwickshire Travel Ltd, trading as People Movers, which is based off Kisses Barn Lane, Warton, near Tamworth, holds a standard international passenger vehicle O- licence (PD1063541) for six vehicles. The licence was granted in August 2006, when the company’s name was D & DH Transport Services Ltd. The sole director of the company is Michael James, who is also the nominated Transport Manager (TM) on the licence.
According to Companies House records, D & DH Transport Services Ltd changed its name to North Warwickshire Travel Ltd on August 30, 2017. This information was communicated by the company to the Central Licensing Office (CLO) in Leeds on September 6, 2017.
Background
On July 17, 2017 the bus registration team in Leeds received three short notice applications from the operator to vary local Tamworth service 12 (Tamworth – Amington) and to cancel local services 15 (Tamworth – Hurley) and 66 (Tamworth – Dordon). The request was for the variation and cancellation to take effect the same day. The three services in question had been registered with effect from July 1, 2017. The reason for the short notice request was unforeseen staff shortages.[wlm_nonmember][…]
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Mr Denton stated: “I refused the short notice application as I considered that it was a basic function of an operator to ensure that it had the necessary staff to run its registered services. Routes 15 and 66 had only been registered 16 days previously (July 1) and service 12 had last been amended with effect from July 1. The operator should have made provision for sufficient staff to operate them.
“My decision to refuse the short notice applications was communicated to the operator by letters dated July 21, 2017. The letters made clear that the operator must not vary or cancel the services until September 11, 2017 – the date on which the full 56 days’ notice required would expire. Meanwhile, however, on July 14, 2017 my office received two complaints from members of the public that services 12, 15 and 66 had ceased to run. Indeed, the operator’s website stated that “due to excessive and unforeseen staff shortages” it had been forced to withdraw these services “with immediate effect.”
Mr Denton said that because the operator had clearly taken no notice of his decision to refuse its short notice application and had gone ahead with then proposed cancellations on the very day it submitted its applications to the TC’s office, he decided to call it to a Public Inquiry (PI).
The call-up letter was sent on September 12, 2017, citing Sections 14ZA and 17(1) and (3) of the Public Passenger Vehicles Act 1981 as well as Article 4.1(a) of Regulation EC 1071/2009 and Section 26 of the Transport Act 1985.
The letter was addressed to the directors of D & DH Transport Services Ltd, as that was the company name on the VOL database on that day. By letter of the same date, Michael James was called to the inquiry in his capacity as TM to consider his good repute.
In preparing for the PI, Mr Denton noted that Michael James had “considerable past involvement with passenger transport operations.”
He had been the director of Acorn Coach & Bus Ltd when its licence was revoked at a PI in February 2015. The company had previously been given a formal warning at a PI in December 2013. At the 2015 PI, there were significant maintenance shortcomings and the TC further found that the operator had both run services in contravention of Section 6 of the Transport Act 1985 and failed to operate a local service in accordance with the same Section. The TC found that Acorn lacked both professional competence and good repute, and disqualified Michael James from holding a licence for 12 months.
In addition, Mr James had been the director of Vals Coach & Bus Ltd when its licence was revoked at the same February 2015 PI for failing to satisfy financial standing requirements.
Mr James had also been the director of Tamworth Coach & Bus Ltd when its licence was revoked at a PI in December 2013 for failing to satisfy financial standing requirements. The TC removed Mr James’ good repute as a TM too at this PI (for his failures at Acorn) and disqualified him from acting as a TM again until he retook and passed the TM CPC examination (which he subsequently did in March 2015).
Mr Denton added: “I further noted that Michael James had been declared bankrupt in January 2011 and had been discharged in January 2012.
“I further noted that a payment to CLO by cheque from North Warwickshire Travel Ltd for an unrelated registration application on June 8, 2017 had been returned by the bank unpaid. This suggested that the company might be having financial problems.”
The Public Inquiry
The call-up letter stated that evidence of financial standing of £12,200 (the amount required for four vehicles) must be submitted to the Office of the TC in Birmingham by October 4, 2017, seven days before the PI was due to be held.
“The evidence should take the form of company accounts (if available), original bank statements and any overdraft facility, loan or factoring agreement,” explained Mr Denton.
“On October 9, 2017, my clerk received from Mr James a single sheet of paper headed ‘Annex 3: Finance Agreement.’ The agreement was between the operator and Polesworth Motor Finance Ltd, although the headed paper was that of a different company, Polesworth Garage Ltd. The details on the sheet, however, followed the template of a factoring agreement. They purported to show that there was £50,000 available to the operator. No bank statements were supplied.”
The PI was due to take place in Birmingham at 1000hrs on October 11, 2017. The call-up letter stated that the operator should arrive an hour in advance and bring various maintenance and drivers’ hours records for examination by the TC before the inquiry started.
Mr Denton continued: “At 1000hrs no one from the operator had appeared. My clerk phoned both the mobile and landline contact numbers. Neither was answered, so she left messages. I started the inquiry in the operator’s absence. At 1005hrs a woman from the company rang my office and said that Mr James was stuck in traffic and would be there in 15 minutes. I therefore decided to adjourn the inquiry until 1020 to see if Mr James turned up.
“At 1020hrs there was still no sign of Mr James. Given that he was supposed to have arrived at 0900hrs with various records and that we had not at any stage heard directly from him, I was not prepared to wait any longer and proceeded to continue the inquiry. There were seven or so observers in the public gallery, but as the operator itself was not present and was not represented in any way, I stated that I would base my decision on the written evidence as well as the operator’s failure to attend the inquiry. It was likely that I would revoke the licence and disqualify Mr James, both as operator and TM. A subsequent written decision would set out the reasons. I concluded the inquiry at 1025hrs.
“A few minutes later, my clerk informed me that Mr James had arrived at the entrance downstairs. She also told me that he was being extremely aggressive, shouting and swearing and demanding that the inquiry be reconvened. I concluded that the operator had had its chance to attend the inquiry at the due time and date and had failed to take it. I had already held the inquiry and concluded it.”
In refusing to re-open the concluded PI, Mr Denton noted: “Traffic conditions in Birmingham were not unusual this morning and there was nothing which would have prevented Mr James from arriving at a timely hour had he set off for the inquiry in time. Indeed, observers from Staffordshire and Warwickshire County Councils, Centrebus and Arriva had all managed to arrive for the PI well before 1000hrs.”
Findings
In the light of the evidence, the TC made the following findings:
- The operator lacks financial standing (Section 17(1)(a) of the 1981 Act refers). Incomplete evidence of financial standing has been provided. The details on the single sheet of paper are insufficient to establish the terms of the finance agreement (length of term, interest rates etc). The template used is that of an invoice finance (or factoring) agreement, yet given that the maximum available under the agreement is constant (which it would not be under an invoice finance agreement) it clearly is not an invoice finance agreement. The company’s failure to submit any bank statements makes it impossible to establish a true picture of its finances. There is likely to be some problem with cashflow which caused its cheque to CLO to bounce.
- The operator has operated in contravention of Section 6 of the Transport Act 1985. It cancelled and varied services on July 17, 2017, well before the date (September 11) on which these cancellations and variation were due to take effect;
- The operator, by failing to submit financial evidence on time and by failing to turn up to the PI an hour ahead of the start time (indeed until 30 minutes after the start time) has failed to co-operate with the PI;
- Because of the aforementioned second and third findings, the TC concluded that the operator has lost its good repute. Mr Denton said it has deliberately ignored the requirement to operate services until the due date.
The TC added: “I do not regard the excuse of unforeseen lack of staff as sufficient – if it lacked staff, it should not have registered the services in the first place. It could have brought in agency staff to man the services, or sub-contracted them to another operator. It did neither. By ceasing the services on the very day it applied for short notice variation/cancellation and without waiting for my decision, it showed its contempt for the registration and regulatory process. It then proceeded to treat the PI process with contempt as well, failing to submit the requested documentation and failing to appear at the due time and date. Such an operator cannot possibly retain its good repute.”
Decisions
In his decision, Mr Denton found: “Because the operator lacks financial standing and good repute, revocation of the licence is mandatory under Section 17(1)(a) of the 1981 Act. I am also revoking the licence under Section 17(3)(aa) of the 1981 Act, on the grounds that it has failed to fulfil its undertaking to operate services in accordance with the law.
“Michael James has a long history of non-compliant and/or inadequately funded operation in the passenger transport history (see above). In the light of this history and because of his disregard of the need to operate within the law and to respect the regulatory process, I am disqualifying him under Section 28 of the Transport Act 1985 from holding or obtaining an O-licence in the future and from being the director of a company holding or obtaining such a licence. Mr James has been so disqualified before and does not appear to have learnt any lessons from this. I conclude that he has now had more than enough chances to operate solvently and compliantly but that his history demonstrates that he is incapable of so doing. I am therefore disqualifying him indefinitely from holding a licence.”
Turning to Mr James’ repute as a TM, Mr Denton found: “As with the O-licence, it is difficult to see how a TM’s repute can survive a deliberate flouting of the TC’s decision to refuse the short notice requests (and therefore of the law). This was compounded by the failure to appear at the inquiry, which also prevented him from presenting any mitigating arguments. Michael James has already lost his repute as a TM once and been disqualified. I conclude that he has again lost his good repute. This time I am disqualifying him from acting as a TM for three years. While I cannot envisage that Mr James could ever in the future run a well-managed passenger transport operation as a licence holder or director, different considerations apply as a TM where, after a period of time and reflection, he might be capable of being a TM on a licence properly run by someone else.”
The TC concluded: “Because Michael James has lost his good repute as a transport manager, I am also revoking the licence under Section 17(1)(b) of the 1981 Act.”[/wlm_ismember]
