Decision for Halton Borough Transport Ltd trading as Halton Transport (PC0001376)
Source: gov.uk (2025-02-20)

Written decision of the Deputy Traffic Commissioner in the North West of England for Halton Borough Transport Ltd trading as Halton Transport

DECISION OF THE DEPUTY TRAFFIC COMMISSIONER FOR THE NORTH WEST OF ENGLAND

In the matter of the Public Passenger Vehicles Act 1981 (the 1981 Act)

HALTON BOROUGH TRANSPORT Ltd trading as Halton Transport PC0001376

Public Inquiry at Golborne on 19 February 2020

Decision:

The operator’s licence for Halton Borough Transport Ltd is revoked with immediate effect in accordance with findings under Section 17 (3) (aa), (b), (c) and (e) of the Act. No disqualification is imposed on any director of the company. The repute of the Transport Managers is not lost.

Background

This decision notice records the outcomes of regulatory processes which have concerned the operator Halton Borough Transport Ltd trading as Halton Transport (hereafter HBT) (PC0001376), the holder of a Standard National Public Service Vehicle operator’s licence authorising the use of 76 vehicles. The licence was granted in 1995. It had ceased trading on 24 January 2020. The company entered voluntary liquidation on 17 February 2020.

The operator was a former municipal transport operator, which was transferred into the hands of a separate entity, on the coming into force of the Transport Act 1985. It was wholly owned by Halton Borough Council.

The calling-in to Public Inquiry

HBT’s executive operations director and TM, Brian Stevenson was called before me (alongside HBT) but had indicated he would not attend the Public Inquiry, although he did provide written representations. He was not legally represented.

HBT’s executive engineering director and TM, Colin Stafford was not called before me because it was accepted by me that in the circumstances of his health condition, this it was neither an appropriate, nor proportionate step to take. He has subsequently made some written representations, when offered the chance to do so.

The third member of the executive director team was HBT’s Chief Executive and finance director, Adele Jones. She was given notice of the proceedings but has not engaged in proceedings at any stage, nor provided any written representations. She had been absent for health reasons from the business.

The non-executive directors were also given notice. They are Councillors Keith Morley, Michael Wharton, Andrew MacManus and Weislaw Zygadllo. Represented by Beverley Bell, solicitor, written representations were provided on their behalf. Each was an elected member of the Halton Borough Council.

Finally, Halton Borough Council, itself is listed as a director of HBT. It is represented by Beverley Bell, solicitor, who provided written representations on its behalf.

Circumstances of the calling-in

The operator and its TMs were called to Public Inquiry principally to address the unsatisfactory outcome of DVSA’s maintenance inspection which took place in June 2019.

The calling-in letter for a hearing in February 2020, gave notice to the operator and its TMs that the Traffic Commissioner had concerns about licence undertakings not honoured, breaches of conditions attached the licence, prohibition notices issued to the company’s vehicles and material changes in the operator’s circumstances, since the grant of the licence. Matters raised were of such significance that the Traffic Commissioner was considering whether the operator continued to be of good repute, appropriate financial standing and was able to meet the requirements of professional competence.

TM Brian Stevenson was called-in alongside the operator because of concerns that he might not be exercising continuous and effective management the company’s transport activities, and therefore that his good repute was in question.

As indicated above, TM Colin Stafford was not called in respect of his good repute in that role because it was accepted that in the circumstances of his health condition, this was neither an appropriate, nor proportionate step to take.

Notice was served that in the event that the Traffic Commissioner determined to revoke the operator’s licence that he might exercise the powers to disqualify the company, or/and any of its individual directors from holding an operator’s licence. Similar notice was served upon the TM, Brian Stevenson to the effect that if his good repute were forfeit, he would in consequence be disqualified from acting in that role.

Developments since the calling in notice and brief for the Public Inquiry were issued

On 24 January 2020, HBT gave notice to my office that it had ceased trading; it surrendered the bus service registrations for all its routes. HBT notified it had engaged liquidators to take forward the company’s desire to place itself in voluntary liquidation. The operator’s licence itself and the discs were returned to my office a few days later.

Brian Stevenson simultaneously reported that he had resigned both as a director of HBT and from his role as TM. Upon medical advice, he had decided that he would not subject himself to attendance at Public Inquiry.

On 14 February 2020, Beverley Bell, solicitor, on behalf of Halton Borough Council (and the four non-executive directors listed above), filed notice that she would represent them at any Public Inquiry. Her instructions were limited in this fashion because of “a conflict of interest” between her clients and the executive directors of HBT. It was made clear that the non-executive directors would not propose to give evidence at any hearing.

On 17 February 2020, HBT passed a special resolution to wind up the company on a voluntary basis and formally appointed liquidators. HBT is therefore in liquidation.

By email on 17 February 2020, Brian Stevenson, reiterated that he would not be present at the hearing but provided written representations in respect of matters to have been considered at the Public Inquiry.

On 18 February 2020, Halton Borough Council represented by Beverley Bell, solicitor provided full written representations in readiness for any hearing.

On 18 February 2020, in the light of the developments on 17 February 2020, I adjourned the Public Inquiry to a date to be fixed. I gave a direction in accordance with Section 57 (4) of the Act to the following effect – that the operator’s licence for Halton Borough Transport Ltd would not terminate in consequence of it entering liquidation, at this time, whilst regulatory action was under consideration.

I gave further notice (to be circulated to all parties) that I had vacated the hearing on 20 February 2020 and that no attendance by any party was required.

An indication was given that I would provide full reasons for so doing. I set out below for the sake of completeness the reasons and directions which were then provided, as they provide a suitable explanation of the context and narrative for this decision.

Reasons

This case concerns very serious findings of DVSA that triggered the Public Inquiry, where a licence could be brought to an end. The investigation in June 2019 exposed serious shortcomings in the maintenance regime at HBT. When 39 of HBT’s vehicles had been checked, this had led to the issue of 17 roadworthiness prohibitions, 9 of which were immediate.

As it happens, the licence will come to an end in any event, since this company is not trading and is being wound up, and by definition, is no longer able to meet the mandatory financial standing requirement.

It will be for a Traffic Commissioner to decide whether surrender of the licence, or its termination on the grounds of liquidation, or revocation of it, is appropriate.

In reaching conclusions in the event of licence revocation, it will fall to the Traffic Commissioner to decide whether the powers to disqualify any director should be exercised.

In reaching conclusions in the event of the loss of repute of the TM, it will fall to the Traffic Commissioner to decide the extent of any disqualification of any TM to be exercised.

Directions:

From the representations now before me, whilst it appears the DVSA findings are not in material dispute, there is conflict in the positions taken by Halton Borough Council, on the one hand, and Brian Stevenson, on the other. It is relatively rare in cases before Public Inquiry for there to be conflicting positions taken by the various directors of a licence-holding business: this however is one of those cases. The appropriate response in such cases, in fairness to the parties, is to allow each to express both their own position, and to comment on/question the position of the other.

This is a process which it is appropriate that I adopt in this case before reaching a conclusion about it.

In the first instance, I propose serving the following documents, (and any response to them) on the other parties listed below:

• The written representations of Halton Borough Council dated 18 February 2020, and

• The email representations of Brian Stevenson dated 17 February 2020.

Parties to be served:

• Beverley Bell, solicitor, on behalf of Halton Borough Council and the non-executive directors of HBT;

• Brian Stevenson,

• Colin Stafford and

• Adele Jones.

Both Beverley Bell, on behalf of the Council and Brian Stevenson will be asked first to indicate whether any redaction to their representation is necessary before service on other parties.

As far as I am aware, neither Colin Stafford, as company director and TM (who was not called the hearing in his capacity as TM for reasons already set out), nor Adele Jones (who has also been absent from work for a period of time) have had any opportunity to place on record any explanation of their position. I appreciate that there may be good reasons why neither would wish to engage in this process at this time, but fairness demands that I provide such an opportunity to them, especially in the light of the powers available to me.

Once that process is complete, I shall determine whether the holding the hearing is necessary, or if matters can be effectively disposed of without taking such a course.

Developments since February 2020 and the current position

The impact of the COVID-19 pandemic and circumstances of the subsequent lockdown in the UK have (of course) impacted upon the time taken to complete the regulatory process in this case. I express my personal regret to the parties that since the time when it has been possible to access our offices, after restrictions had been lifted and hearings had restarted, completion of some other urgent and more pressing matters may have led to further delay.

I have received representations from Colin Stafford, Brian Stevenson and a redacted version of the previous written representations on behalf of HBC and the non-executive directors. I have taken them into account. Whilst the receipt of representations has increased my understanding of what was going on at HBT, it was never likely that alone, they would enable me to make formal findings.

Consideration

Having had the opportunity to review the Public Inquiry statements of DVSA, the various written representations made and to delve into the maintenance materials containing in the series of large cardboard boxes provided for the operator. I have read the minutes of board meetings, such as they are, rarely fulsome in detail and often based on papers served only on the day.

Exceptionally however, I have determined that it is appropriate that I conclude these proceedings on the papers.

It is clear that a formal hearing would not (in any event) be one carried out in the presence of all the relevant parties. There remain a series of disputes about the circumstances which led the financial failure of the company and about the root causes of the adverse outcome of the DVSA’s investigation. Satisfactory resolution of each particular dispute is very unlikely to be possible and is a process that might not be necessary in reaching appropriate outcomes in this matter. Further, I am aware other legal claims made by executive directors (probably not directly relevant in this context) are yet to be considered by other tribunals. Conducting a full hearing would be likely to be wholly disproportionate in terms of tribunal time and cost for all parties engaging in it.

Further, for reasons set out below, revocation of the licence is (in my view) inevitable, at least on the matters alleged to be breaches of Section 17 (3) of the Act. Practically speaking therefore, a hearing would be focused on whether good repute had been lost by the company under Section 17 (1). It would also allow closer consideration of whether powers to disqualify individual directors from holding licences in some form or other would be appropriate. Helpfully, such representations as are before me have sought to address disqualification.

Decisions and reasons

The operator - Halton Borough Transport Ltd:

In this case I find there is no substantial argument that the operator’s licence for HBT should not be brought to an end. The undisputed findings of DVSA are such that even though this was a company with no significant regulatory history, a direction for its revocation by me is the only proportionate step that may be taken. Patently there has been material change and financial standing cannot be satisfied as a result of liquidation. Allowing surrender of an operator’s licence where such a large proportion of the vehicle fleet was found to be in prohibitable condition, would be an affront to the regime. Notwithstanding that the FTA (as it then was called) carried out an audit with a positive outcome in 2019, undertakings entered into and statements of intent made have been breached. It is clear that the safety of the travelling public and others was prejudiced in an entirely unacceptable manner. It would appear concentration on the most basic requirements of ensuring only a fit and serviceable fleet was deployed for public use, had been lost in a short period. Loss of key staff and sickness of others might provide explanation but does not account the failures of remaining managers in effectively filling in the gaps left in the business and the lack of the sort of effective directorial (executive and non-executive) oversight envisaged by the code that sets out the duties and responsibilities of directors.

The company is in liquidation with a deficit exceeding £2.5 million. A range of circumstances clearly changed in the landscape within which this operator was offering its services to the public in Merseyside and the adjoining unitary authority area of Halton. The company was unable to make the internal changes and control external factors in a fashion which might have allowed it to survive in the new environment in which it found itself. The company is in liquidation and will be dissolved in due course.

I make findings under Section 17 (3) (aa), (b), (c) and (e) of the Act. Vehicles were neither fit nor serviceable, the driver defecting regime was inadequate and relevant changes/notifications affecting repute and professional competence were not made.

I determine not to make a finding that the repute of the company is lost. No hearing has taken place.

Exercise of powers to disqualify:

A discretionary power to disqualify arises upon my decision to revoke this operator’s licence.

As far as the non-executive directors of this company are concerned, I find that their disqualification is not a necessary step for me to take in ensuring that the purposes of the legislation are enforced. I have assessed in particular the degree of risk which would be posed if these councillors were free to hold office in respect of any other licence. I did not consider such risk to be more than minimal. They held office in a non-executive role as representatives of the interests of the shareholder and beneficial owner, HBT. It is however apt that I direct that should any of them: Keith Morley, Michael Wharton, Andrew MacManus and Weislaw Zygadllo make an application as a sole trader, partner in a business, or as a director (of any sort) that any such application will be heard at a Public Inquiry.

As far as Halton Borough Council itself is concerned (as a director of HBT), I do not find that disqualification is appropriate or necessary in its case either. The Council is a licence holder in its own right and has not been source of concern in regulatory terms.

As far as the executive directors (and TMs) are concerned, their position as professionals appointed in a transport business is different in nature to the others. Colin Stafford’s ill health is such that he is not before me, although I note his representations. Brian Stevenson has made his own representations to me. Both have been involved in the industry for many years. Whether they would want to to continue their careers after their experience at HBT is of course a matter uniquely in their hands. The decision about whether they ought to be excluded from so doing is mine. On balance, I have concluded that having considered the degree of risk associated with leaving either of them free to seek to return in some role, that such risk is low. Should any application for a licence involve them in any fashion, it will be necessary to examine by receiving and considering evidence about their role at HBT at a Public Inquiry whether they meet the statutory requirements. The same would apply in the event that Adele Jones made such application.

On the same basis, I make no direction in respect of the repute of the Transport Managers. I do so on my assessment that it is unlikely that either will offer themselves in that role in the future.

Simon Evans

Deputy Traffic Commissioner for the North West of England

28 September 2020