Decision

Decision for New City Taxis Ltd (PC2029584)

Published 30 December 2020

In the North West of England

Note of Decision

1. Introduction

New City Taxis Limited (“NCT”) submitted an application for a standard national public service vehicle operator’s licence in December 2019.

The application was initially considered at a public inquiry on 11 March 2020 into the applicant company’s previous restricted PCV operator’s licence PC1125915. The presiding Traffic Commissioner initially indicated that he was prepared to grant the application, but this decision was not put into effect as the nominated Transport Manager withdrew within a week of the hearing.

The applicant was called back to a public inquiry at Golborne today so that the application could be considered afresh.

I heard evidence from Jane Frances Jones, one of NCT’s directors and the originally nominated Transport Manager, Andrew Wright. I also heard evidence from Milan Boevsky the currently nominated Transport Manager.

2. Background

There is a long history leading to the current application involve a number of previous licences and entities.

The business known as New City Taxis appears to have been founded around 20 years ago by James Beck. He was a director of NCT when this application was first submitted but resigned on 1 October 2020 before today’s hearing.

The business initially was involved in private hire/taxi work as indicated by the company name. In 2004 the current New City Taxis Limited company was incorporated with Mr Beck, Peter Rayton and Michelle Gowing as directors (Miss Gowing later resigned).

During the same period broadly, Mrs Jane Jones and her husband Walter Jones also started a private hire business trading as VIP Taxis.

In 2011 Mrs Jones was appointed as a director of New City Taxis Limited. She explained in her evidence that this was effectively a merger of NCT and VIP Taxis which had been funded by an investment from Peter Rayton. Mrs Jones said that Mr Rayton proposed that she should act as a director rather than her husband Walter Jones as he had greater faith in her ability to grow the business.

In 2012 Walter Jones was granted a restricted PCV operator’s licence PC1110751 with an operating centre at 41 Moor Lane, Preston, which is the base for NCT. Mrs Jones in her evidence today claimed that Mr Jones ran that business from their home address, but this was not consistent with the terms of the licence.

In 2014 NCT was also granted a restricted PCV operator’s licence PC1125915 with the same operating centre at 41 Moor Lane.

Mrs Jones referred to this licence as being “Mr Beck’s licence” but it was issued to NCT as a company and she was a director of that company throughout the duration of that licence. Mrs Jones said she was responsible for running the private hire aspect of the business and Mr Beck ran the PCV aspect.

In 2019 concern was raised about the management of Walter Jones’ sole trader licence. The issues included an unsatisfactory DVSA maintenance investigation and information suggesting that Mr Jones no longer met the “main occupation” requirement. Mr Jones was called up to a public inquiry in relation to those matters.

Information was then received from Lancashire County Council regarding Mr Jones’ operation of school contracts and in particular concerns that he may have been operating more vehicles than authorised by the licence and operating vehicles under the NCT licence.

Walter Jones attended the public inquiry on 16 December 2019 before Traffic Commissioner Simon Evans. The decision was made to revoke the sole trader licence PC1110751. TC Simon Evans in his decision noted that Mr Jones had accepted that his sole trader business (VIP Taxis) was merged with NCT in around 2009. It was also accepted that whilst Walter Jones was not a director of NCT, his role had “all the features of him being a “shadow director” of that company.”

TC Simon Evans further recorded that it was accepted before him that since the businesses have operated as though a single entity through NCT using 4 vehicles (in excess of the authority on each licence) on council contracts and therefore in breach of the terms of a restricted licence.

The decision also recorded that Mr Jones accepted that from the issue of his licence until March 2019 the requirements for compliance were dealt with by Mr Beck.

TC Simon Evans concluded that Walter Jones licence must be revoked. There had been a change of entity, there were serious concerns arising from the DVSA’s maintenance investigation and his confidence in Walter Jones as a licence holder had been undermined.

TC Simon Evans also decided that NCT should be called up to a public inquiry on its restricted licence PC1125915 in view of the issues raised about its compliance. That public inquiry was subsequently arranged for 11 March 2019.

On 30 December2019 an application was submitted for this new standard national PSV licence by NCT giving the name of Andrew Wright as Transport Manager.

At the time, Mr Wright was the sole director and Transport Manager of Andrew Wright Group Limited (“AWG”). This company was incorporated in October 2019 and was granted a standard national PSV operator’s licence PC2027705 on 12 December 2019. Its operating centre was about a mile away from NCT’s operating centre at 41 Moor Lane.

Although the new application was not formally called to public inquiry, it was considered when the hearing into NCT’s restricted licence was heard on 11 March 2020 before Deputy Traffic Commissioner Simon Evans.

Mr Beck and Mrs Jones attended the hearing and gave evidence. Mr Wright was not present.

DTC Simon Evans recorded a finding that there had been impropriety in relation the NCT restricted licence and that there was no genuine separation between the Walter Jones and NCT businesses.

The DTC added, “I am not persuaded that New City Taxis Ltd failures here represent any concerted attempt to obtain any competitive advantage or to undermine the regulatory regime. The multiple errors are the result of negligence, lack of competence and experience. Neither director had any thorough understanding of the expectation of a restricted licence holder.”

The DTC decided that the restricted licence should be revoked with effect from 25 March 2020. Whilst the new application for a Standard National PSV licence was not strictly before him, the DTC decided to consider it, noting the clear benefit of the requirement for the operator to have professional competence in the form of a Transport Manager. The standard national licence was granted but limited to 3 vehicles.

An undertaking was accepted for Mr Beck and Mrs Jones to attend an operator licencing awareness training course by 30 June 2020. A statement of intent was also recorded that Walter Jones would not play any part in the business beyond driving private hire taxi cars.

On 16 March 2020 (before the final fees had been paid and the licence issued) my office received an email from Andrew Wright indicating he was no longer willing to act as Transport Manager for NCT. He then raised a number of matters about his relationship with NCT which were explored in evidence today. The issue of the licence was set aside, and a decision subsequently made that NCT should appear at a further public inquiry so that the application could be considered afresh.

NCT subsequently nominated an alternative Transport Manager named [REDACTED] but he also withdrew before the public inquiry. In October 2020 NCT nominated Milen Boevsky as its latest Transport Manager.

Mrs Jones also informed my office of the resignation of Mr Beck as director of NCT on 1 October 2020.

3. Evidence

I heard evidence first from Mr Wright.

Mr Wright stated that although he was aware of the NCT business he had not had any contact with the company until he was approached by Mr Beck in early December 2019. Mr Beck asked about the possibility of him acting as Transport Manager for NCT. Mr Wright said that he subsequently had several meetings with Mr Beck, Mrs Jones, and Walter Jones. He understood that all three persons were directors of NCT, and that Mr and Mrs Jones appeared to take an equal part in decision making. Mr Wright was clear that Walter Jones was present at all the meetings he held with NCT although he also said that his negotiations were predominantly with Jane Jones.

Mr Wright then claimed that he identified an opportunity to develop both businesses by entering into what he described as a “partnership”. On further examination it became clear that this proposal was effectively for AWG to take over NCT’s PSV operations with Jane Jones becoming a director and shareholder of AWG. That latter company had a margin on its licence to allow this proposal. It was agreed that £[REDACTED] would be invested in AWG to finance this development with [REDACTED] to be contributed by Mr Wright and [REDACTED] by Mrs Jones. This investment was never made.

Mr Wright said the intention was that the school contracts held by NCT for PSV work would be “novated” across to AWG.

In furtherance of this agreement, Mrs Jones was appointed a director of AWG on 1 February 2020 and remained on the Companies House register until her removal in June 2020. Neither Mr Wright nor Mrs Jones could provide a satisfactory explanation why her appointment as director of AWG was never notified to my office.

Mr Wright also registered on the AWG licence, the two minibuses previously record on the NCT restricted licence. He also changed the trading name of AWG on the online licensing system on 17 February 2020 to “New City Minibuses”.

Mr Wright explained he had met Walter and Jane Jones at a McDonald’s for further discussion. During that meeting, Walter Jones had stipulated that the trading name should include “minibuses” and it was decided the “New City” name should also be adopted.

I asked Mr Wright who was operating the vehicles after they were specified on AWG licence on 17 February 2020. Mr Wright said they were operated by AWG as he was paying the drivers and for fuel. I then asked him to explain how AWG were able to undertake the schools when that was contracted to NCT and sub-contracting was not permitted. Mr Wright then sought o claim that NCT continued to operate the schools work but he appeared very confused about the matter.

Mr Wright said he then became aware the school’s contracts could not be transferred to AWG so he decided not to press ahead with the proposed arrangement. He said he informed Mrs Jones but was initially prepared to continue to act as transport manager. Mr Wright accepted he had transferred the minibuses back to the NCT restricted licence on 9 March 2020 and amended the trading name of AWG back to “Wright Way to Travel”.

Mr Wright said he subsequently changed his mind about the Transport Manager role after hearing of the public inquiry outcome and decided to withdraw. He has no links to NCT any longer but accepted that Mr Beck now works for him as a driver.

I offered Mrs Jones the opportunity to question Mr Wright, but she chose not to do so. She then gave her evidence. In advance of the hearing, NCT had submitted copies of its bank statements for October 2020 which I had considered. These demonstrated an adequate level of financial standing for the 2-vehicle authority now sought but I queried some of the transactions shown.

Mrs Jones’ evidence confirming the background to the licences as outlined above. She explained Mr Rayton was absent from the hearing as he was effectively a “silent partner” and played no role in the management of the NCT business despite being the majority shareholder.

Mrs Jones insisted her role at NCT until this year had solely been to run the private hire aspect and that Mr Beck was responsible for the PCV aspect. She said the restricted licence had been in Mr Beck’s name and that the intention was for the new standard licence to be in her name. She appeared surprised when I pointed out to her that both the previous licence and the new application were in the name of the limited company. As she had been a director since the restricted licence was first granted, she had responsibility for both.

Mrs Jones said Mr Beck had advised that a transport manager would assist to put matters in order at NCT. She claimed it was then Mr Wright that had suggested NCT applied for the standard licence.

Mrs Jones confirmed that an agreement had been reached for Mr Wright and her to collaborate on PSV operations. She said she understood this was to be by forming a new company and not under the guise of AWG. She accepted that she was aware that she had been appointed as director of AWG and that AWG had registered the vehicles on its licence in February 2020. Mrs Jones referred to one vehicle as being owned by Mr Beck and the other by a driver named [REDACTED]. This was despite the V5 documents for both vehicles produced by Mrs Jones recording the keeper as New City Taxis (or New City VIP Taxis). As stated previously Mrs Jones could not explain why she was not recorded as a director of AWG on the vehicle licensing system.

Mrs Jones insisted that Walter Jones did not play any part in the management of the business and was purely a private hire driver. She denied he had been at all of the meetings with Mr Wright saying she only recalled his presence at the meeting in McDonald’s and meetings at their home. She sought to deny that Mr Jones had participated in the McDonald’s meeting but accepted that it was her husband who had suggested the “new “business should be described as “minibuses” in the trading name.

In written submissions before the hearing, Mrs Jones had sought to dispute Mr Wright’s allegations claiming he was maliciously motivated to disadvantage NCT so that he could pick up their school contract work. However, the most relevant aspect of Mr Wright’s evidence namely the fact of his negotiations with Mrs Jones and NCT about establishing some form of joint venture was not disputed.

Mrs Jones was asked about the statements which showed that Mr Jones had been paid a total of £[REDACTED] in a 4-week period in October alone There was no evidence that any other 65 drivers working for the operator received payments of any such level. Mrs Jones response to that point was that Mr Jones did more driving than anyone else.

I also drew Mrs Jones’ attention to NCT’s website and in particular an entry under the tab for “The Team”. A section headed “The Great Boss(es)” contains a reference to the leadership of husband and wide team Walter and Jane Jones. Mrs Jones admitted this was NCT’s website but claimed the content had been drafted by a third party some years previously. She conceded the website was still active as it has an online booking facility which is in use and could not explain why that entry had not been amended if it was incorrect.

I asked Mrs Jones to explain the large amounts of cash transactions shown on the statements. Between 5 October 2020 and 30 October 2020, £[REDACTED] was withdrawn in 41 separate transactions. This involved between 2 and 4 visits to cash machines on an almost daily basis. Mrs Jones said this was to withdraw cash to pay private hire drivers. She claimed the transactions were documented but could not produce the records today.

Mrs Jones confirmed that she had attended an OLAT course but said she felt she did not know much about running a PSV operation and she recognised that she would need assistance from a Transport Manager.

She insisted that although running the private hire businesses was very demanding she would ensure she devoted sufficient time to monitoring the PSV licence if granted. Mrs Jones repeated her willingness to offer a statement of intent that Walter Jones would not be involved in running the business.

I asked Mrs Jones why the transcript of the public inquiry on 11 March 2020 made no reference to the arrangement she had agreed with Mr Wright other than for him to act as Transport Manager. Mrs Jones first claimed she had mainly attended the hearing as an observer and Mr Beck had given most of the evidence. When challenged on this recollection, she could only respond that she had not been asked any questions about Mr Wright.

Mrs Jones accepted that if the arrangement with Mr Wright had continued, the intention would have been to retain any new licence obtained by NCT as a safety net and that such a licence would effectively have been dormant.

Finally I heard evidence from Mr Boevsky. He attained his CPC qualification in April 2020 and has not previously acted as a transport manager. However he is a director of a company which has held a standard national PSV licence for a number of years. He has not previous links with NCT and its directors. He proposes to spend 3 hours per week on his Transport Manager duties if the NCT application was granted.

4. Consideration

I found neither Mrs Jones not Mr Wright to be especially convincing witnesses and there was a degree of self-interest evidence in the way they both chose to frame their evidence.

It is however not disputed that in December 2019, Mr Wright entered into discussion with representatives of NCT about becoming its Transport Manager. These discussions then clearly developed into a proposal to establish some form of joint enterprise involving Mr Wright and Jane Jones.

I am satisfied on the balance of probabilities that NCT were represented in these discussions mainly by Mrs Jones, but that Mr Beck and Walter Jones also actively participated. For example, I am satisfied that the change of AWG’s trading name to “New City Minibuses” was at the instigation of Walter Jones personally and indicates the extent of his true influence. Mrs Jones’ attempt to depict her husband at the relevant meeting as eating his McDonalds meal quietly in the background whilst she discussed business with Mr Wright is simply not plausible.

Whilst I do not believe that Jane Jones and NCT are acting wholly as a front for Walter Jones, I am satisfied that it is more likely than not that he is participating in the management and decision-making processes of the applicant company alongside his wife. This is supported by the evidence of the regular payments made to him from the company’s bank account, the description of him as the boss on the company website and the evidence that was heard at the previous public inquires and today of his involvement.

Walter Jones has deservedly lost his fitness to hold a licence as a result of his wholesale lack of compliance in relation to his own sole trader licence. I cannot have confidence in the ability of any other entity to be compliant with the requirements of operator licensing if Walter Jones has influence in its management. This is especially so when I find that Jane Jones has deliberately sought to minimise his involvement and has not been frank with me today or DTC Simon Evans at the previous hearing about that matter.

I am also satisfied that had the DTC been made aware of the true extent of Mrs Jones’ negotiations with Mr Wright, an indication would not have been given that the new licence could be granted.

The view I have formed from all the evidence is that once Walter Jones had been called to public inquiry in relation to his sole trader licence, the parties involved in the management of NCT realised its own licence was also at risk of revocation. This explains why plans started to be made at the start of December 2020 for NCT to apply for a standard national licence.

The decision at Walter Jones’ public inquiry on 16 December 2019 will have confirmed those fears. I am satisfied on the balance of probabilities that the applicant with the assistance of Mr Wright then developed a further contingency plan to allow NCT to continue operating PSV vehicles under the cloak of AWG’s licence if both its restricted licence was revoked and they failed to gain a standard licence.

Had the DTC been aware of that plan at the public inquiry on 11 March 2020, I am not sure he would have concluded that there had not been any concerted attempt to undermine the regulatory regime.

Mrs Jones’ evidence today continued to display a lack of knowledge of the importance of the licensed entity and the licensed entity alone operating under the authority of a licence. She was not clearly able to explain the basis on which vehicles were operated between 17 February 2020 and 9 March 2020 when they had been transferred to AWG’s licence but were continuing to work on NCT contracts.

It is also apparent from Mrs Jones’ evidence and the bank statements that steps have not been taken to distinguish between the private hire and PSV operation despite this being flagged up as desirable at the previous public inquiry. I have not been reassured that if the PSV licence was granted there would be sufficient distinction made between the two aspects of the business with the risk that the much larger private hire aspect would distract from the compliance requirements of the PSV licence.

I find that the lessons of NCT’s (and Walter Jones’) difficulties managing their previous licences and the revocations that followed, have not been learnt.

I do not have any confidence that if New City Taxis Limited were to be granted a new licence that its statutory directors (and any other person exercising influence over its management) could be trusted to manage the licence in a manner that complied with the regulatory regime.

For that reason, I do not grant the application for a standard national public service operator’s licence.

I direct that any future application for an operator’s licence by NCT or involving its directors Jane Jones, Peter Rayton, its former director James Beck or Walter Jones is referred to a Traffic Commissioner for consideration. I note that at the public inquiry on 16 December 2019 consideration of disqualifying Walter Jones was deferred until after the public inquiry into NCT. Mr Jones has not in fact been called back for consideration of disqualification and due to the passage of time I do not prose to take further formal action on that at present.

I have concerns about Mr Wright’s involvement in the efforts to preserve NCT’s operations that took place between December 2019 and March 2020 but resile from making a finding that his repute is lost. I accept that it was his action in withdrawing his name as Transport Manager and reporting on his account of events that led to the review of the decision to grant NCT a standard licence and I give him credit for that. Nevertheless I issue Mr Wright with a warning about his future conduct as a Transport Manager. He will wish to ensure that he delivers strict compliance with the regulatory regime in relation to his duties as director and Transport Manager of AWG’s own licence. Mr Wright should be in no doubt that should the AWG licence come to a Traffic Commissioner’s attention in future, it will be the subject of careful scrutiny.

I do not find any evidence that the latest nominated Milen Boevsky was party to any of the matters referred to above and he has only recently become involved with NCT. His repute remains intact and unaffected by his limited association with this application.

Gerallt Evans

Traffic Commissioner for the North West of England

14 December 2020