Decision for Celtic Minibus Limited (PG2076562)
Source: gov.uk (2025-03-04)

Written decision of the Traffic Commissioner for Wales for Celtic Minibus Limited

IN THE WELSH TRAFFIC AREA

DECISION OF THE TRAFFIC COMMISSIONER FOR WALES

Public Inquiry held on 13th February 2025 at Pontypridd

Public Passenger Vehicles Act 1981 (“The Act”)

In the matter of Celtic Minibus Limited PG2076562

Decision

On the basis of the applicant’s failure to satisfy me as to the statutory requirements under sections 14ZA(2)(b) and (2)(d) and 14ZC(1)(a) of the Act, the application for a standard international licence authorising the use of four vehicles is refused.

Background

This decision relates to an application for a standard international public service vehicle operator’s licence made by Celtic Minibus Limited on 31 August 2024. The sole director of the applicant company is Brian Davis and the proposed transport manager on the licence is Paul Watkins. Brian Davis previously held licence PG1050735, trading as Celtic Minibuses, from 2005 until 2019 when it was revoked due to a change of legal entity.

Upon receipt of the application, OTC staff noticed that the email correspondence address given by the applicant was that of Brian Davis’ wife, Tracey Davis. On 8 August 2024 Tracey Davis had been called to a joint Public Inquiry with Ian Davis (their son), following which both of their operator’s licences (PG1063828 and PG109162) were revoked and they were disqualified from holding or obtaining an operator’s licence and from being a partner or director of a licence holding entity. In his written Decision, the Deputy Traffic Commissioner made a number of serious adverse findings, including that Tracey Davis and Ian Davis had lent their licences to Celtic Minibus Ltd, the applicant, to allow the applicant to fulfil contracts it held with Monmouthshire County Council for school transport. Adverse findings were also made about the poor maintenance arrangements in respect of the vehicles operated by Tracey Davis which were being maintained not by the named contractor on her licence, but by her husband, Brian Davis, the sole director of the applicant company. Maintenance was found to be highly unsatisfactory with incomplete or non-existent maintenance inspection records, no daily driver defect reports, and no evidence of rolling road brake tests.

Brian Davis was questioned by OTC staff about the use of Tracey Davis’ email address for correspondence and responded to the effect that he was using her address because his own address would put important correspondence into “spam”. He stated that she would have no involvement with the operator’s licence if the application were granted. Concerns were also raised about the nominated transport manager, Paul Watkins, because the contract supplied by the applicant between the company and Mr Watkins referred to the operation of Goods Vehicles, rather than PSVs, and was unsigned. Concerns were also raised about Mr Watkins’ ability to manage continuously and effectively as transport manager on the licence applied for, given that he held his own operator’s licence authorising 7 vehicles.

By letter of 18 November 2024, I proposed to refuse the application because I was not satisfied that the statutory requirements were met. Specifically, the applicant was advised in that letter that it had not satisfied me of its good repute with reference to its involvement with the linked revoked licences previously held by the director’s wife and son, and his own revoked licence. The applicant was also advised that it had not shown that it meets the professional competence requirement, with reference to the unsigned contract which referred to Goods Vehicles, rather than PSVs and the fact that, whilst Mr Watkins had indicated his intention to return some of his own licence discs, he had not applied to reduce his vehicle authority down from 7 vehicles. Finally, the applicant was advised that it had not shown that proper maintenance arrangements were in place, noting Brian Davis’ close links with the revoked licences of his wife and son and his own involvement with maintaining the vehicles on those licences.

The applicant requested a Public Inquiry in response to that propose to refuse letter and was called to attend a Public Inquiry hearing at Pontypridd on 13 February 2025, by a call-up letter dated 17 December 2024.

In advance of the hearing, I received a bundle from the applicant which included a 3-page letter of representation from Brian Davis; evidence of financial standing; a maintenance contract dated 1 February 2025 with A&A Tyres and MOT centre, Beaufort; sample driver defect report sheet, PMI sheet and vehicle mileage record and driver log.

Brian Davis, sole director of the applicant company attended the hearing, unrepresented. Paul Watkins, the nominated transport manager also attended the hearing. I heard evidence from both and reserved my Decision.

Findings on the evidence

Adverse findings have already been made in respect of the unlawful licence lending arrangement between the applicant company and both Tracey Davis and Ian Davis. The Deputy Traffic Commissioner’s Decision setting out his findings is included in the Public Inquiry Brief (pages 83-89) and those findings are highly relevant to this Decision. Brian Davis accepted what had occurred was a very serious breach of the operator licensing rules. He also accepted that adverse findings had been made about the poor maintenance arrangements for the vehicles operated under Tracey Davis’ licence, vehicles which were being used to fulfil school transport contracts with his company, and that he had been maintaining the vehicles, not the contractor named on the licence.

When asked if he was familiar with the expression “fronting”, Brian Davis said that he was not. Having regard to the case of Utopia Traction Ltd (2011/34), I explained what I meant when using that expression by reference to that Decision and explained what was said in that case:

“In the context of vehicle operator’s licensing “fronting” means that a person, partnership or company, which does not have an operator’s licence, uses the operator’s licence held by another entity to conceal the fact that they are behaving in a way which requires them to have an operator’s licence of their own. In other words it deprives the Traffic Commissioner of the right to control an ”operator”, when Parliament has said that such an entity should be within his or her jurisdiction.”

Brian Davis accepted that was what had been happening when Tracey Davis and Ian Davis had lent their operator’s licences to Celtic Minibus Ltd to enable the applicant company to fulfil the school contracts it held with Monmouthshire County Council. This was a “fronting” arrangement which had persisted for a prolonged period, from 2019 (when Brian Davis’ sole trader licence was revoked) until the end of August 2024, when Tracey and Ian Davis’ licences were revoked. As Deputy Traffic Commissioner Seculer found, these were operations that were “shrouded in deceit as to the real operator, payments and the contracts being undertaken.”

In his evidence, Brian Davis repeatedly referred to having made mistakes. He maintained that he did not know that the licence lending and fronting arrangement was wrong until after this was highlighted by the DVSA officers who conducted investigations into the licences held by Tracey Davis and Ian Davis. He could not explain why he did not apply for an operator’s licence in the name of Celtic Minibus Ltd when he began operating as a limited company and following the revocation of his previously held sole trader licence. That licence was revoked as part of a “bulk revocation” because it was not renewed by him. I do not accept that Brian Davis did not realise that Celtic Minibus Ltd was required to hold an operator’s licence to operate public service vehicles. That is the basic and fundamental requirement which underpins the whole regulatory regime – a regime which he had been subject to as a sole trader licensed PSV operator over many years. The arrangement the applicant had with two operators who have now had their licences revoked and who have been disqualified from operating cannot be excused as a “mistake”. It was a longstanding arrangement that clearly involved deception and conduct which seriously undermines the effectiveness of the regulatory regime. On the balance of probabilities, I find that Brian Davis could not have thought that the fronting arrangement was lawful. As the Upper Tribunal said in the case of Silvertree Ltd (2012/071): “…once a Traffic Commissioner is satisfied that the evidence establishes that fronting has taken place he or she is entitled to take a serious view of such conduct. Those concerned must understand that such a finding puts the good repute of those involved in jeopardy. The reason is that fronting involves deception.”

Brian Davis stated that, if the licence were to be granted, the vehicles would be maintained by an external maintenance provider – A&A Tyres and MOT centre, Beaufort. He did not intend to do any work himself. In response to my concern that I needed to be satisfied that he would use the maintenance provider specified and not do it himself, in breach of licence conditions, as had happened on his wife’s licence, with serious concerns raised about vehicle maintenance arrangements, he stated that was all in the past. However, the provider he intends to use for periodic inspections does not have a roller brake test facility and nor can it carry out PSV MOTs. When asked about proposed arrangements for brake testing, Brian Davis seemed unsure about the best practice requirements in the Guide to Maintaining Roadworthiness, which concerned me – particularly given that he had been responsible for carrying out maintenance for Tracey Davis and adverse findings were made about the lack of roller brake testing, which were still not addressed despite assurances given to the DVSA. Brian Davis’ past involvement in unsatisfactory maintenance investigations and his evidence at inquiry did not satisfy me that he has the knowledge or commitment to ensure that proper maintenance arrangements are in place.

I have no grounds for doubting the integrity or repute of Paul Watkins, the nominated transport manager. However, as at the date of the public inquiry, there was still no signed transport manager contract in place, despite this having been requested by OTC staff and having been given as a reason for proposing to refuse the application. I heard oral evidence from Mr Watkins that there was no binding contract in place between him and the applicant. He had not signed anything and what had been provided to OTC was “the sort of contract that he would have entered into”, albeit he acknowledged that it referred to HGVs not PSVs, which was incorrect. His evidence was that he intended to enter into a contract with Celtic Minibus Ltd if the licence were granted. He had now reduced the vehicle authorisation on his own operator’s licence to 4 vehicles.

I heard evidence from Paul Watkins that he had not previously acted as a transport manager on any licence other than his own, that he had known the Davis family for around 8 years and realised that what had happened was serious. He saw his role as being there to support and he had gone through maintenance and drivers’ hours requirements with Brian Davis.

On the evidence before me, particularly the lack of any tangible contract for services between the parties to satisfy me of the terms under which Paul Watkins would be engaged, including details that were requested as to invoicing and payment arrangements and all services to be provided, particularly those specified in the letter at page 56 of the Brief, I was not satisfied that the professional competence requirement was met.

Determination and reasons

The burden of proof is on the applicant to satisfy me that the statutory requirements of the Act are met. I have also reminded myself of the Upper Tribunal’s words in the case of Aspey Trucks Ltd (2010/049):

“In a case such as this, the Deputy Traffic Commissioner was not looking at putting someone out of business. Rather, he was deciding whether or not to give his official seal of approval to a person seeking to join an industry where those licensed to operate on a Standard National or Standard International basis must, by virtue of s.13(3), prove upon entry to it that they are of good repute. In this respect, Traffic Commissioners are the gatekeepers to the industry – and those permitted to join the industry will not blemish or undermine its good name or abuse the privileges it bestows. What does “repute” mean if it does not refer to the reasonable opinions of other properly interested right-thinking people, be they members of the public or law-abiding participants in the industry?”

Having regard to the information set out in the Public Inquiry Brief and call up letter, and the evidence presented on behalf of the applicant at the public inquiry hearing, I am not satisfied that the requirements of sections 14ZA(2)(b), 14ZA(2)(d) and 14ZC(1)(a) of the Act are met.

On the basis of the applicant’s failure to satisfy me as to the statutory requirements as to good repute, professional competence and that there will be adequate facilities or arrangements for maintaining vehicles in a fit and serviceable condition, the application for a standard international licence authorising the use of four vehicles is refused.

Victoria Davies

Traffic Commissioner for Wales

24 February 2025