Sister company licence is revoked and a separate application is refused, but time is granted to get the finances of one operation in order
At a Public Inquiry (PI) which considered two existing licences and an application for another, the licence of Mackenzie Bus No 2 Ltd has been revoked.
The Mackenzie Bus Ltd O-licence (separate from Mackenzie Bus No 2 Ltd) has been varied to change its operating centre. The licence has also been granted a period of grace until to November 30, 2017, in respect of the requirement to have continuing financial standing. If satisfactory evidence of continuing financial standing for the three months ending on that date is not delivered by midday on December 12, 2017, the licence will be revoked with effect from 2359hrs on December 19, 2017. [wlm_nonmember][…]
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The application by Coakley Brothers (Scotland) Ltd was refused, as the Traffic Commissioner (TC) for Scotland, Joan Aitken, was not satisfied that it had financial standing.
Background
A PI was called to consider the PSV O-licences held by Mackenzie Bus Ltd and Mackenzie Bus No 2 Ltd and variation applications relative thereto, along with an application by Coakley Brothers (Scotland) Ltd for the grant of a licence.
The PI was held in Edinburgh on March 23, 2017. Those present were Claire Coakley, Director of Mackenzie Bus Ltd and Mr Edward Constantine Coakley, Director of applicant company Coakley Brothers (Scotland) Ltd. There was no appearance by any director or instructed agent for Mackenzie Bus No 2 Ltd. Neither Claire nor Edward Coakley were current (or past) directors of that company, though Edward Coakley was a shareholder.
It emerged that Mackenzie Bus No 2 Ltd did not have financial standing and Mr Coakley gave the TC the licence and the discs, understanding that the licence would be revoked and the registered service terminated by that revocation.
Mackenzie Bus Ltd
The company with current name of Mackenzie Bus Ltd was incorporated as C.B.C.S. Ltd at Companies House on September 13, 2007, with registration number SC330913.
The operator’s standard national O-licence for six vehicles was granted on November 21, 2007, then as C.B.C.S. The director at time of application was Peter Canavan.
At the date of this Inquiry it appeared that Claire Coakley was sole director, but the company was owned by the Coakley siblings being her husband, Edward junior, his sister Louise Elliot and their brother Paul Robert Coakley.
Peter Canavan resigned on April 24, 2008 and wrote to say he had sold his shares to Stephen Coakley. At the PI Stephen Coakley described his involvement and led the TC to believe that he had become the controlling force behind the licence. However, there was no reference to him as a director in Companies House records.
Mackenzie Bus
(No 2) Ltd
The second Mackenzie Bus company was incorporated on June 4, 2010. It was previously called Mackenzie Bus and Coach Services (changed July 28, 2015).
The operator’s standard national O-licence was granted on February 8, 2011 and has authorisation for three vehicles. The director at the time of application was Kirstine Mackenzie, while Robert Mackenzie was transport manager.
On January 16, 2012, Kevin Morrow notified the TC’s office of the change of directors from Kirstine Mackenzie to himself and Paul Robert Coakley, and the change of operating centre to 19 Newhut Road, Motherwell.
On May 18 2012, Louise Elliot, signing as director, sought to vary the licence by an increase from three to 12 vehicles. Eddie Coakley of Eddie Coakley Transport gave parking consent on June 15, 2012. The application was changed to 10 vehicles.
By variation application dated January 19, 2016, Peter Coakley, signing as director, nominated James Gray as transport manager to replace John Higgins; notified removal of Whitehill Farm; and stipulated the operating centre at 19 Newhut Road, Braidhurst Industrial Estate, Motherwell for five vehicles. Edward Coakley junior, as executor of his father’s estate, gave permission to use the site. Various other variation applications were made.
On August 15, 2016, Peter Coakley of Peter Coakley Distribution Ltd gave a lease to the operator for five years to park four vehicles, noting that there was sufficient space for 25. DVSA undertook a maintenance investigation in 2013 and prohibitions were issued to the operator. Peter Coakley signed the five-year checklist on January 11, 2016, as director.
The late Mr Edward Coakley had to give an undertaking to the Secretary of State under the Company Directors Disqualification Act 2007, which he did in respect of the period of six years from November 26, 2007.
Coakley Brothers (Scotland) Ltd
This applicant company was incorporated on May 28, 2013, as Coakley Brothers (Motherwell) Ltd. The sole director is and has been Edward Constantine Coakley.
Companies House records show that Mr Coakley has been an officer of six other companies, all since dissolved (Coakley Bus Company Ltd, Central Bus Company
Ltd, Braidhurst Bus Company Ltd, YBF Leisure Ltd, A to B Recovery Ltd, Allied Coaches Ltd). He is the sole shareholder of the applicant company.
As director of the company and by application, dated July 20, 2016, he sought a licence to operate two vehicles with maintenance by Mr Coakley himself at 19 Newhut Road, Braidhurst Industrial Estate, Motherwell. Three convictions were declared and there was no declaration of involvement with any other licences.
James Gray was nominated as an internal transport manager (declaring his appointments on the other two licences). He gave a trading name for the company of ARG Travel. During the course of scrutiny of the application, the operating centre was changed from his home to Evans Business Centre at Bellshill. Bank statements were produced.
A maintenance agreement between the applicant company and 911 Commercial Services of Bothwell for four weekly inspections was produced to the TC’s Office. Mr Coakley also produced email correspondence between himself and Transport Scotland relative to his late father’s business.
The evidence and submissions at the Inquiry
Given the links to a materially non-compliant operator and the numerous changes in directorship, shareholdings, and outstanding variations which needed to be addressed, the two licences and application were called to PI.
The TC noted: “The PI was amicable in tone, though some of my queries did cause concern and worry to Mr and Mrs Coakley. I was grateful to James Mulgrew, representing, for his very constructive interventions to clarify matters. I gained the impression that Mr and Mrs Coakley wished to be trusted by me.”
At the start of the PI, Mr Mulgrew put on the record that he was not instructed by Mackenzie Bus No 2 Ltd and his understanding was that no director would appear. Mr Coakley was a shareholder and the repercussions of non-attendance by the company were accepted.
Mr Mulgrew was aware that the PI knew of the Coakley family and especially Mr Coakley senior. He hoped to convey and was instructed that the ethos had changed and the context was very different. He said the application for the new licence did away with any contention of fronting by or for Edward Coakley.
Edward Coakley’s evidence
Edward Coakley junior (EC) described some of the background to the ‘Coakley’ licences. Stephen Coakley was involved with the Braidhurst licence, which was liquidated. Edward Coakley senior was the shareholder in that company.
Mackenzie Bus started as C.B.S. in 2011, beginning operating services 107/109 with Kevin Morrow as director. Kevin Morrow was a family friend and in a relationship with EC’s youngest sister, Frances Coakley. In 2011, EC was not involved as he was working as a coach driver for Hire Society, East Kilbride. Archie Brown got him that job as he was unemployed.
EC said he had a difficult relationship with his father. He went back to work for Airbles Bus Co. to help with the administration of the concessionary fares and BSOG, the Almex machines and other administrative jobs. He could not give exact dates, but it was after Kevin Morrow’s time. His wife, Claire, who had a degree in HR, came on as a director – he decided it was better she was the director given her qualifications. She is the sole director of Mackenzie Bus Ltd.
EC had not put any money into the business, but was allocated shares because of the effort he put in. Mackenzie Bus is owned by his brother Paul, sister Louise and himself. He said he deals with concessionary travel, Abellio invoicing and liaising with Jim Gray, and is on a service contract and is not full-time.
Brother Paul, married to Andrea, has lived in Canada with his family since January 2014. Before that, he was with Stagecoach in Aberdeen. He holds shares but takes no operational role.
Sister Louise (married to Dominic Elliot) has nothing to do with the company. She was a director to 2013/14. There was a big family issue in May 2015, and EC said he doesn’t have contact with his family and has tried to meet and discuss through solicitors.
EC said he is not a director because of the relationship with his brother and sister, who have the majority of the shares. That is why he has applied for his own licence as Coakley Brothers (Scotland) Ltd so that he can be director and shareholder. He would offer the Mackenzie shares back to the family.
The trading name ARG Travel he had picked for Coakley Brothers (Scotland) Ltd came from their daughter’s’ initials. The use of ‘Brothers’ in the company name came from a time when he was hoping that he and Paul would operate it, but Paul went to Canada. He said he would rather not continue to trade with the Coakley name and wanted a fresh start.
EC said he is seeking two vehicles and wants to concentrate on rail replacement and private hire work, not local services. He has been studying for the CPC – passing one part in 2012 and having sat the other exam in March 2016.
On the licence application form, he declared a conviction for assault. This had arisen from him drinking at a Bellshill nightclub and resisting the police. He pled guilty.
Initially, he had been appointed as his late father’s executor and was trying to get everything in order, including with Transport Scotland. His father owed both companies money.
His brother and sister considered there was a conflict of interest, so he was not confirmed as executor. He produced the Transport Scotland emails in support of his claim for repute. He said he would try and build a rapport with DVSA, and had studied for the CPC to help the business and be responsible. He had a maintenance agreement signed with 911 Commercials Ltd.
EC said the two ‘Mackenzie’ companies were separate. He said each had their own payroll and drivers, and Claire did not deal with ‘No 2.’ The discs for the licence were handed over to the TC.
Claire Coakley’s evidence
Claire said she had been asked to be director of Mackenzie Bus as she was family and had a HR degree and the HR side of the business needed looking at. She said she runs the company and contracts work out to Edward Coakley and Jim Gray.
Claire said she has a young family and her background was in recruitment, not buses. Apart from Edward Coakley, she has no contact with the shareholders. She said that this is the only bus company in which she is involved, though for a short time she was a director of Mackenzie Bus No 2.
She realised she was responsible for the licence undertakings. Edward Coakley was not a director as he felt his name was an issue; she was not sure. Mr Gray was transport manager and John Higgins has no role and is off the scene.
The licence has six discs and six vehicles and the vehicles are kept at 35 Evans Business Centre. They had given up the previous addresses. She said maintenance is in-house. They operate one local service – 107 Circle – which is commercial. They also do rail replacement work for Abellio.
Claire added that she had not considered surrendering the licence, as they are continuing the best they can.
Submissions
Mr Mulgrew submitted that this was a difficult context with the issues from the executory and the relationship of the two siblings. There were ongoing commitments to the business and creditors.
He stated that Edward Coakley was doing his best to ensure creditors are not inconvenienced, and understands repute and financial standing. Prior to this, his involvement with his late father’s companies had been administrative. He’s now taken his CPC and broadened his ability to operate compliantly.
The TC was asked to grant a period of grace to Mackenzie Bus and to consider it as an ongoing business. He said the 2016 accounts show an ongoing successful business, so there is hope if the problems of the bank account can be resolved.
Mr Mulgrew submitted that Edward Coakley was not the same man as his father. He argued that he is trying to involve himself in the industry reputationally and from perspective of compliance. He asked that the TC grant the Coakley Brothers’ application and give a period of grace to Mackenzie Bus.
He submitted that the applicant company had shown an effective and stable establishment in Great Britain; good repute; financial standing; a transport manager of good repute and professional competence and undertaking to comply with the law.
The yard at Unit 356, Evans Business Centre, Bellshill, had sufficient space and a lease. Peter Coakley has been sequestrated but it was understood that his partner, Margot Jarvis, was heading the company. No rent has been paid yet; Mr Mulgrew had visited the premises with his client and Mr Gray and seen the vehicles operating there.
In respect of repute, Mr Mulgrew directed the TC’s attention to the Senior Traffic Commissioner Guidance on good repute and discretion. Mr Coakley had convictions, but not serious as defined in Schedule 1 of the Act. He claimed there was no evidence of wrongdoing on the part of Edward Coakley and that he had answered questions about previous businesses and the emails to Mr Nyguist of Transport Scotland and with DVSA, which showed himself as pro-active. His hope of gaining his CPC supports good repute, and no issue had been raised agains
t the good repute and professional competence of Mr Gray, who has the appropriate certificate.
In respect of Mackenzie Bus, Mr Mulgrew confirmed that the only variation which required to be granted was that from August 15, 2016 to change the operating centre to Unit 35.
Consideration of the evidence and decision
Considering the evidence, the TC said: “As an additional matter I can record that in the period between the conclusion of the oral PI and my finalising this decision, I received a copy of Mr Coakley’s CPC in Passenger Transport, dated April 20, 2017. I congratulate him on that examination success.
“From the evidence and submissions, it became apparent that Mackenzie No 2 has not had self-sufficient financial standing. The sole director, Mr Le Blond, brother of Claire Coakley, resigned and the shareholders had not replaced him. This material change by itself served to imperil the licence. Shareholder Edward Coakley brought three discs to the PI and recognised that the formal absence of the company from the PI and lack of financial standing made revocation unavoidable and immediate.
“The same persons who are shareholders of Mackenzie No 2 are shareholders of Mackenzie Bus Company Ltd. Claire Coakley is director.
“With some hesitation, for I am not enamoured about the pattern of ownership and control of the Mackenzie Bus Company since 2011 and Mackenzie No 2 since 2012, I grant a period of grace to Mackenzie Bus Company Ltd for the period ending on November 30, 2017. If proper and satisfactory evidence of continuing financial standing for the three months ending on that date is not delivered to Edinburgh by noon on December 12, 2017, the licence will be revoked with effect from 2359 on December 19, 2017. There will be no further period of grace.
“From the call to this PI and from the Statutory Guidance Document No 2 on finance, the operator is well aware of the stipulations for financial standing in this jurisdiction and how that must be evidenced.
“I now turn to the application by Coakley Brothers (Scotland) Ltd. where the onus is on the applicant company. I have a concern about repute given the evidence I heard about the other two licences but I am just about prepared to consider that Mr Coakley junior is one who wishes to bring a better ethos and co-operation than was ever exhibited by his late father. However, the company’s application fails on finance.
“This refusal does not preclude a further application.”[/wlm_ismember]
