2 Travel Group PLC (in liquidation) v Cardiff City Transport Services Ltd [2012] CAT 19 (5 July 2012) [2012] CAT 19

"(1) This section applies to – (a) any claim for damages, or (b) any other claim for a sum of money, which a person who has suffered loss or damage as a result of the infringement of a relevant provision may make in civil proceedings brought in any part of the United Kingdom. (2) In this section 'relevant prohibition' means any of the following: ... (b) the Chapter II prohibition; ... (6) The decisions which may be relied on for the purposes of proceedings under this section are – (a) a decision of the OFT that the Chapter I prohibition or the Chapter II prohibition has been infringed; ... (9) In determining a claim to which this section applies the Tribunal is bound by any decision mentioned in subsection (6) which establishes that the prohibition in question has been infringed."

"30. The jurisdiction of the Tribunal is therefore limited to determining what are commonly referred to as follow-on claims for damages based on a finding of infringement of the Chapter II prohibition or Article 82 which has been made by the OFT or one of the sectoral regulators such as the ORR who enjoy concurrent powers of enforcement in respect of the Chapter II prohibitions: see CA 1998 s.54 and Schedule 10. The existence of such a finding is not only a pre-condition to the making of a claim under s.47A(1). It also operates to determine and define the limits of that claim and the Tribunal's jurisdiction in respect of it. 31. For there to be such a claim (and, with it, the jurisdiction of the Tribunal to adjudicate upon it) the regulator must have made a decision of the kind described in s.47A(6). The use of the word "decision" makes it clear that s.47A is differentiating between findings of fact as to the conduct of the defendant made as part of the overall decision and a determination by the regulator that particular conduct amounts to an infringement of the Chapter II prohibition. It is not open to a claimant … to seek to recover damages through the medium of s.47A simply by identifying findings of fact which could arguably amount to such an infringement. No right of action exists unless the regulator has actually decided that such conduct constitutes an infringement of the relevant prohibition as defined. The corollary to this is that the Tribunal (whose jurisdiction depends upon the existence of such a decision) must satisfy itself that the regulator has made a relevant and definitive finding of infringement. The purpose of s.47A is to obviate the necessity for a trial of the question of infringement only where the regulator has in fact ruled on that very issue. We were not referred to any procedure for seeking clarification of any points of uncertainty from the decision-maker. The Tribunal ought therefore, in my judgment, to be astute to recognise and reject cases where there is no clearly identifiable finding of infringement and where they are in effect being asked to make their own judgment on that issue."

"160. ...the Claimant's claim can only be founded on the OFT's Decision and it is idle to attempt to pad it out by way of what the Claimant calls "causation narrative" as to matters on which the OFT made no findings. Accordingly, the claims that 2 Travel was caused loss by alleged intimidation of its drivers; by dangerous driving on the part of Cardiff Bus's drivers; or by them 'sandwiching' 2 Travel's buses; or why Cardiff Bus's white services operating in breach of their registrations have no part to play in the present proceedings. The attention of the Tribunal and the energies of the parties in this case should not be directed to debating the accuracy or otherwise of 2 Travel's factual assertions as to these matters or their claims about the consequential impact on 2 Travel. 2 Travel is attempting to have a third bite at the cherry, having failed to convince the OFT..."

"In all the circumstances, the OFT concludes that the evidence is sufficient to demonstrate that Cardiff Bus was reacting to 2 Travel's entry by attempting to force the entrant to retreat from the market. Cardiff Bus' white services were not, therefore, launched as a market test but were launched and operated simply for the purpose of driving out 2 Travel, rather than making profits for Cardiff Bus or fulfilling any other legitimate commercial strategy."

"206. As regards price fixing cases under the Chapter I prohibition, the Tribunal pointed out in Claymore Dairies that cartels are by their nature hidden and secret; little or nothing may be committed to writing. In our view even a single item of evidence, or wholly circumstantial evidence, depending on the particular context and the particular circumstances, may be sufficient to meet the required standard: see Claymore Dairies at [3] to [10]. See also, for example, the opinion of Judge Vesterdorf, acting as Advocate General, in Rhône-Poulenc v Commission [1991] ECR-II at p. 867; and Cimenteries , cited above, at paragraphs 1838 to 1839. As the Court of Justice said in Cases 204/00P etc. Aalborg Portland v Commission , judgment of 17 January 2004, not yet reported, at paragraphs 55 to 57: "55. Since the prohibition on participating in anti-competitive agreements and the penalties which offenders may incur are well known, it is normal for the activities which those practices and those agreements entail to take place in a clandestine fashion, for meetings to be held in secret, most frequently in a non-member country, and for the associated documentation to be reduced to a minimum. 56. Even if the Commission discovers evidence explicitly showing unlawful conduct between traders, such as the minutes of a meeting, it will normally be only fragmentary and sparse, so that it is often necessary to reconstitute certain details by deduction. 57. In most cases, the existence of an anti-competitive practice or agreement must be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules.""

"(1) Unless the court directs otherwise, an OFT's finding which is relevant to an issue arising in Part 1 proceedings is binding on the parties if – (a) the time for bringing an appeal in respect of the finding has expired and the relevant party has not brought an appeal under section 46 or 47; or (b) the decision of the Tribunal on such an appeal has confirmed the finding. (2) In this section – "an OFT's finding" means a finding of fact made by the OFT in the course of conducting an investigation; "

"In relation to findings of fact said to be binding under section 58, it seems to me that ... the party seeking to rely on a finding must be able to demonstrate that the regulator has made a clearly identifiable finding of fact to a given effect, and it is not enough to be able to point to passages in the decision from which a finding of fact might arguably be inferred."

"… It is not good enough for a party claiming damages in a follow-on claim to root around in the decision of the regulator to find stray phrases or sentences and say "look, here is a finding of fact, you cannot deny it."" (2) Secondly, it must be noted that, unless disapplied by the Tribunal, "

"7.231 2 Travel's no-frills services were only a part of its operation. For instance, in November 2004, its no-frills services represented approximately 25 per cent of 2 Travel's services in Cardiff, with the other approximately 75 per cent of its activities being either tendered or school services. 7.232 Furthermore, as detailed in paragraphs 2.40 onwards, the evidence indicates that shortly after the introduction of its four commercial bus services in direct competition with routes served by Cardiff Bus, 2 Travel was investigated by the Traffic Commissioner over concerns about its financial standing as a result of poor service levels in Neath, Llanelli, Carmarthenshire and Gwent. These problems did not appear to be related to 2 Travel's activities in Cardiff. Moreover, it appears from internal Cardiff Bus documents that Cardiff Bus was aware of the difficulties that 2 Travel had been encountering… 7.233 Given these developments, it may be the case that 2 Travel might eventually have exited the market even if Cardiff Bus had not engaged in predation against it. 7.234 However, given 2 Travel's weak financial position and its apparent difficulties in providing effective bus services in certain areas, the OFT considers it likely that 2 Travel was at particular risk of being forced to cease its Cardiff operations or prevented from gaining market share so as to become an effective competitor and improve its financial position. This is particularly so given 2 Travel's strategy to expand its no-frills services to a full-timetable, combined with its reliance on external sources of finance. Moreover, the fact that 2 Travel was experiencing such difficulties does not, in the OFT's view, provide any justification for Cardiff Bus to predate against it. 7.235 On this basis, whilst there may be a question as to 2 Travel's long term viability, the OFT considers that it is likely that Cardiff Bus' predatory conduct was a contributory factor in 2 Travel's exit from the market, potentially accelerating its exit. Given how little actual competition Cardiff Bus faced at the time and the fragmented nature of the competition…this would have reduced actual competition."

"The reason given by the OFT for not making any determination in relation to these matters was that it had insufficient evidence before it to reach a conclusion. It is noticeable that a large volume of the material disclosed by Cardiff Bus in the present case was not provided to the OFT by Cardiff Bus pursuant to the section 26 notice sent to it. In fact, if the OFT had all the material available to it which is now before this Tribunal, albeit following belated disclosure, it seems that more could have been said by the OFT in this regard."

"The first step in establishing causation is to eliminate irrelevant causes, and this is the purpose of the "but for" test. The courts are concerned, not to identify all of the possible causes of a particular incident, but with the effective cause of the resulting damage in order to assign responsibility for that damage. The "but for" test asks: would the damage of which the claimant complains have occurred "but for" the negligence (or other wrongdoing) of the defendant? Or to put it more accurately, can the claimant adduce evidence to show that it is more likely than not, more than 50 per cent probable, that "but for" the defendant's wrongdoing the relevant damage would not have occurred. In other words, if the damage would have occurred in any event the defendant's conduct is not a "but for" cause."

"So far as concerns the legal test of causation, Cardiff Bus's position is that the Tribunal should follow its own approach in the decision in Enron v EWS [2009] CAT 36 . It should compare the position in the 'real world' (in which the infringement occurred) with what the position would have been in the counterfactual or 'but-for' world (in which there was no infringement). To the extent that the Claimant is worse off in the real world than it would have been in the 'but-for' world, such losses are to be treated as having been caused by the infringement and are in principle recoverable (subject to issues such as remoteness and mitigation). By the same token, to the extent that a particular claimed loss would equally have been suffered in the 'but-for' world, such loss is not to be treated as having been caused by the infringement, and the Claimant has no claim for damages in respect of it..."

"2 Travel puts its case on the relevant law as to causation as follows: i) It is 2 Travel's case that the losses it claims were caused by the breaches of competition law by Cardiff Bus and that these losses can be shown to be so caused on a "but for" analysis. ii) The law does not, however, confine itself to a test of causation on a "but for" analysis. On a correct reading of the case law, a broader approach to causation should be taken in a case such as this and, again, on this broader approach the losses which are claimed by 2 Travel were caused by the infringement established in the decision. iii) The defendant remains liable for losses, even losses caused by the Claimant's own action where the Claimant was subject to the disability caused only or only partly by the tort or where the tort contributed substantially to the loss. The OFT has found that Cardiff Bus' predatory conduct was a contributing factor in 2 Travel's exit from the market and that is a sufficient finding upon which to conclude that Cardiff Bus is to be liable for all losses consequent upon that exit. iv) All losses which flow from Cardiff Bus' success in excluding 2 Travel from the market are recoverable by reason of (i) the nature of the tort committed by Cardiff Bus and (ii) Cardiff Bus intended that its predatory action should cause 2 Travel the damage, or damage of the type, that it has actually suffered."

"Q (Mr Smith) Just in terms of the articulation of your wider causation test, is your case articulated in para 91(iii) of your opening? Is that the test you contend we ought to apply? A (Mr Bowsher) That is a further broader way of putting it. If you look at the case law, and we go into it – that of course is a summary of what then follows on in our opening in some detail, which we have referred to. We do say that as part of the chain of causation that where part of the losses are caused by the disability then, yes, we suddenly sustain them. I am sorry, I am not making myself clear. That is not the only way we put it but yes, that is a limb of the way we put causation. Q (Mr Smith) You see, Mr Bowsher, I understand the "but for" test, and I understand you are saying that the causation test that should be applied is wider than "but for"

"To ensure that a company is operating in line with its projections, the need for a formal reporting structure with regular timetables for reporting is essential, and these will need to be introduced immediately. Whilst preparing the accounts, and during the audit, it has been apparent that the accounting records and standards have not been of the highest level, and whilst this should not be seen as a criticism of the existing staff, this is an area which will be addressed in the coming months, as new procedures and controls are introduced, and work tasks reallocated. … Whilst it is obvious that the company is making a profit, it is not certain from what operation within the business the money is being derived from. To ensure resources are best utilised it is essential that the accounting records are capable of measuring and monitoring all aspects of the company's operations. To do this properly there will need to be a culture change within the organisation so that the requirement for correct recording of all transactions is carried out. … With such rapid growth, the Company's finances have been 'stretched' over the last few years. To fund this rapid expansion, the Company has utilised all available sources of credit and in addition to very high Hire Purchase and Lease Finance borrowing, the business suppliers and other creditors (i.e. Inland revenue) have been used as sources of 'cash'… … To further enhance the availability of cash, a concerted effort must be made to clear the high proportion of money due to the Company. To facilitate this and prevent any future built up of debt, it is recommended that an experienced credit controller be employed. A policy of no pay, no bus, should also be enforced rigorously, even if this means upsetting some customers… One area of finance which has not been utilised by the business is Bank Borrowings, which since the start of the Company have been nonexistent. Since the early days of the operation the Company has factored the vast majority of it's [ sic ] credit sales, which, whilst helping cash flow, has proved a very expensive source of finance. … Since inception, Lease Finance and Hire Purchase have been used to fund nearly all vehicle acquisitions, often at high rates… … There can be no doubt that the Company has come a long way in a relatively short period. Now is the time for consolidation. Systems and procedures need to be introduced and this is not an overnight job if they are to be done properly. The Company has gone through the growing period of the early years and financially it has gone through the worst… … With this in mind and the work load required to catch up in terms of systems, management and staffing, now may not be the most opportune time to progress with the AIM flotation. The tidying up exercise required to meet the standards expected of a public company will take several months, during which period the Company's value should also be enhanced, providing an even more attractive proposition for potential investors if this indeed is the approach finally decided upon."

"The Company floated on the Alternative Investment Market ("

"It is becoming obvious that the Company is currently incapable of generating enough cash to cover its current commitments. I would recommend therefore that an immediate ban is put on all non critical expenditure."

"As you can see the sums do not add up. I think we have to stop looking at everything through rose tinted eyes and recognise that things are not going to get better in the short term… … I am certain the board will start asking very serious questions shortly and I think we need to discuss all our options without any bias and through practical, realistic eyes rather than the misty, idealistic views of the last few months and forecast."

"Q (Mr West) And it's right, isn't it, that the forecasts in the flotation documents had proved to be over-optimistic, as Mr Waters was saying? A (Mr Fowles) They had, yes, but I think both Huw Francis and myself and probably the rest of the board, realised that there was a value underpinning the company, which was the value of the land."

"Dear Carl, Can't get hold of Bev as he is in a meeting. I know you said this is nothing to do with you but I have never had to put up with so much grief in the 4 years I have worked hear [ sic ]. I have so many companies chasing payment they are pulling out of work for October and we cant [ sic ] afford to loose [ sic ] these companies. I don't blame these companies for chasing as they are Overdue by far. I have never worked for Coach Travel like this, me and Christine have had the worst 4 weeks of working here ever. Please can you pass this onto Bev and get these payments sorted."

"Q (Mr West) So the position is that the result of the CTC passing into your ownership was that you stopped paying the creditors of CTC, just like you did with all of the other creditors of 2 Travel; is that right? A (Mr Fowles) No, that's not right at all. We were coming to terms with managing the Coach Travel Centre. The previous owner of Coach Travel Centre had operated it without very many systems. We were trying to implement our own systems into the place. Carl Waters was dealing with that. Quite clearly, papers had to come through Swansea to be verified and sent back before they could be paid. It just took a little bit of time."

" Effect of unpaid suppliers 1. They have stated they will not undertake future work unless they have written guarantee of payment on terms previously agreed. They are all aware that payment has been made by tour operators. As I explained to you we have coaches booked with them for October and will not be able to cover the work if they refuse to operate. They emphasise that they do the work at a competitive rate which is true. When these operators speak to other operators it wont [ sic ] take to [ sic ] long for word to spread that payment is not being made and then we shall be in the position whereby we wont [ sic ] be able to cover any jobs. 2. The tour operators will also get to know the situation and wont [ sic ] offer any work if they feel we have any problem with getting coaches. ... Whilst I understand that decisions taken on behalf of CTC is [ sic ] not my responsibility I still feel a great affinity towards the company and see it as a great pity it appears that the company is being put in the position of having is [ sic ] reputation spoilt which I find surprising."

"After joining the Company last year I was asked to prepare a short paper on what my initial views of the Company were, 10 months down the line I feel a quick update is probably needed. It is clear now that the Company's cost base is much too high. A company of this size cannot justify or support a management (director level) overhead of nearly £300k per annum, whilst going public has put a further £100k of costs into the company. At the operating level the contract base is totally underpriced and the commitment to guaranteeing 45 hours pay per week is killing any chance of improvement in the short term. We fire fight not plan. Whilst operating from several sites ha advantages I now feel that this is more of a hindrance than a help. The "dead" mileage costs are horrendous but to improve this will only lead to an even higher overhead as rental costs at the other (non Swansea) sites will have to increase, making them even more unprofitable. The fleet itself is probably entirely wrong for the market the Company wants to be in. Too many mid life coaches not capable of doing Tour work but too expensive for schools. The huge financing costs to be covered every month, which in cashflow terms the company cannot sustain do not help the position either. I do not believe that given the fleet mix, overhead costs, financing costs, diverse operating sites and current marketplace the Company can ever meet market expectations and the shareholders will try and force changes onto the Company in an attempt to maximise their return. A solution to this situation has however arisen. The potential development profits from the Swansea site (if Huw's estimates are correct) should raise enough funds to take the Company out of the public market, which given the current shareholder composition should get voted through. I would then recommend liquidating the Company and closing all operations which should then provide enough cash to settle all outstanding debts, although given the potential development proceeds, there should also be some cash left over to enable the founder directors to acquire further small businesses if they wished to continue in the industry…"

"Q (Mr West) Mr Waters' reaction to the possibility of development profits from the Swansea depot was that the land should be sold and the profits should be used to pay off the creditors and wind up the company. A (Mr Fowles) That's what he says. Q (Mr West) But, again, his advice wasn't taken about that at this stage? A (Mr Fowles) His advice wasn't taken at all."

"The profit of the past (if it existed) only arise [ sic ] through infill work and better vehicle utilisation. Our poor quality of service has destroyed the truth of this leaving our cost base exposed. We have dramatically increased our headcount and PVR [Peak Vehicle Requirement] but to no avail. On a weekly basis our factoring now does not even cover our net wages and this is not sustainable. I do not want to seem the eternal pessimist but this condition cannot be allowed to go on. We have made no attempt to seriously cut costs and we will be found out very shortly. The strive for turnover must end and some harsh decision [ sic ] over Company Structure and costs must be made immediately. The company was sold to the City on the basis that all standing costs were covered in the contracts and that other infill work was profit, this is blatantly now not true. We must urgently look at how the business runs and decide where we want the Company to be in the future."

"This has been a period of transition for the Company; a significant amount of work has been completed in developing this bus network and the Board remains optimistic for the future. The year has seen significant costs being incurred to grow and support the infrastructure of the business whilst the bus services are further developed. It is expected that further development will continue through the first half of the next financial year when the remaining 40 bus workings will come on stream. The full effect of the first phase of the Company's development plan will not be felt until the next financial year when it is expected that significant improvements in the financial results will be achieved."

"Following our meeting on Tuesday with yourself, Bev and for the last hour or so, Huw, you will be aware that there have been a number of issues that have arisen during our audit… … 5. We have raised concerns about the accounting for cash income and cash expenses within the company. In particular there was a significant problem at your Cardiff branch for the first six months of the year and we understand that you have now done some work to estimate that approximately £39,000 of cash income was received but not accounted for in that period and that you have identified approximately £30,000 of receipts for this work i.e. there is approximately £9,000 unaccounted for. We believe this was probably spent on fuel and both yourself and Bev have confirmed that no cash wages would have been paid out of this money. As you are aware this is an extremely serious matter which you confirm is not continuing and appropriate controls have been instituted. 6. Similarly in the Cwmbran branch for December 2002 there were monies drawn for cash from the bank and spent, we are told, on fuel and again for which no invoices are available. You confirmed that this occurred because of the very serious cash flow problems that the company had at that point. Again you confirmed that no cash wages would have been paid out of that money."

"15. There is a degree of uncertainty on the company's ability to continue as a going concern. We understand that since the year end hire purchase and insurance direct debits have not been honoured by the bank which again highlights the lack of cash within the business. In addition we have raised the point that if the insurance direct debit has not been honoured is the company still covered by insurance. You said you would come back to us on this matter. There is no evidence that the company can meet its liabilities as they fall due and therefore we will need to see evidence that the company has sufficient cash funds in place to be able to trade for twelve months after the date of our signing the accounts before we can consider signing them. I am sure the board will also wish to see such evidence."

"At the balance sheet date the Group had current liabilities in excess of its current assets. After making enquiries the directors have a reasonable expectation that the Group as a whole has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in the consolidated financial statements."

"Q (Mr West) It's a pretty serious position to be in, isn't it, for a bus company, if your net current liabilities exceed your current assets by over £1 million? A bus company of this size? A (Mr Fowles) Yes, it is. It was a known situation. I think we were somewhere in the region of between £450,000 and £600,000 worth of one off costs in that year. The valuation of the land wasn't at its true value, it didn't have its development potential, and…But I think Richard Needham, in his statement, alludes to that. Q (Mr West) So the company still had net positive assets when one took account of the value of the land? A (Mr Fowles) Yes."

"I am disappointed that, despite a wealth of correspondence during academic year 2001/2002, your Company's use of buses over the 20-year age limit on Home to School Transport Contracts appears to be continuing. Please note that the use of these vehicles on any school contract for the City and County of Swansea is unacceptable and therefore request that you cease this practice immediately… Please may I draw your attention to the Authority's Scheme of Deductions for Failure to Perform Agreed Services or Comply with Conditions of Contract. As a result of the use of a vehicle over 20 years old, I am left with no option but to deduct 50% of the daily contract price for each of the days when the School has confirmed its use…"

"…numerous complaints have been received with regards to the non-operation of various journeys…I note that you have sub-contracted the services to 2 Travel Group PLC. However, it is with your company that we have the contract with [ sic ] and I must therefore warn you that this Authority will not accept poor standards in the operation of it's [ sic ] Supported Bus Services and that the current level of service is unacceptable…"

"Please find attached copy of letter received from Vale of Glamorgan Council to Cardiff Bus regarding "their" operation of route number 88/89. As you can see they have been given a final warning as to their future operation on this contract. This typifies our problems in the Cardiff depot (and in some cases our company as a whole). However, the Cardiff depot in particular has: 1. No maintenance facility. 2. No spare parts/stock facility. 3. The oldest vehicle age profile of any depot in our company (pro rata). 4. No spare vehicle capacity. When you consider that the depot turns over approximately £1.8 million than it seems ludicrous that so little attention is paid to its needs. It is not an outstation though it is treated like one. Although a fitter is now sent up every day (except Tuesday because Warren attends College!) he has no parts with him of any description and is only able to undertake very minor running repairs. We have been active in Cardiff for almost a year and it has to be said that the company has not done a great deal to improve the situation at the depot. We are all agreed that the major growth area in the company is in Cardiff but we are unable to achieve our goals. We have already lost one school contract in the Cardiff area, not through poor operating procedures, but through mechanical failure and not having a spare vehicle to use in case of breakdown. Until the above problems are addressed then we will continue to tread a fine line with local authorities and perhaps lose work accordingly. I am sure that none of us would like that to happen."

"7.11 The largest individual contract, Gorseinen [ sic ] College, which was originally awarded for five years, is due for review in the summer of 2003. Turnover from this contract is expected to exceed £220k, generating £73k profit based on 33% estimated average margin. 7.12 Management are confident of being re-awarded the work because of Bev's relationship with the college and also because there are few operators in Swansea large enough to undertake a contract of this size and nature. The Company should also have a pricing advantage in that the area served adjoins other 2TC route scheduling."

"This is extremely disappointing for the first day of school. Your company failed to inform this department or any schools of any potential problems. In fact it was extremely difficult to contact your staff at your Wentloog depot to find out why buses failed to operate. I would insist that you provide a written explanation for these failures and confirm what action you will be taking to ensure that this does not happen again. No payment will be made for these journeys. Please accept this as a formal letter of warning."

"I am most concerned that this service ran late on four out of five school days, resulting in the Ysgol Glantaf school children having to wait for longer than necessary during inclement weather for the bus. The late running is also affecting the time at which these children arrive home on an already long journey, which is clearly unsatisfactory. Please accept this as a formal letter of warning. I intend to monitor this service closely to ensure the service operates to the scheduled timetable. Any further failures in the operation will result in non-payment and possible termination of the contract."

"If it's in writing, then yes, those journeys may not have operated. Bearing in mind they were operating other journeys during the day satisfactorily, if one journey failed to operate, as any bus operator will tell you, things do happen, thing go wrong. I don't know the circumstances of what happened on that day. But one failure to operate wouldn't seem to be a huge problem at the time."

"It is becoming increasingly difficult to meet our ongoing cash requirements and the position with Barclays is I believe at its limit. To summarise, any business must make a profit and generate cash, we are doing neither. Over £2 million of external funds have been invested in the company and the only tangible benefit I can see is we now own a potentially extremely valuable piece of land. The underlying business has not improved from where it was a year ago and in fact I believe has gone backwards. In several areas we have lost work due to poor performance caused by overstretch and a lack of resource. Trading unprofitably is not in itself a major issue if the depreciation charge is high and ensures operating cash generation is satisfactory and the company can meet its liabilities. We are not. I attach a schedule of 'big ticket' cash requirements which funds need to be available in the short term. The restructuring of some of the debt will help but the introduction of additional debt has eaten into the benefits of this. At the same time our single biggest creditor, The Inland Revenue, is seeing an ever increasing rise in the money owed to them; and I cannot see how much longer they will allow this to continue, particularly as I can see no way of us making payment to them of back debt or ongoing debt. Other trade creditors continue to suffer, and now the fuel companies have been messed around their credit to us will be reduced, further worsening our already overstretched cash position."

"Before proceeding too far into the new financial year we must recognize the problems we are in as I do not believe we can talk our way out of them. As an executive board we urgently need to discuss possible strategies so that at least we have some answers available when we are questioned as to how this position has been allowed to occur. The other issue will be the forthcoming audit when given all the above Bevan & Buckland may question our viability as a 'Growing [ sic ] Concern' which may lead to a qualified audit opinion and major issue with the stock exchange. I know a rabbit was pulled out of the hat last year but now we need another one, otherwise there may be a lot of egg on a lot of faces."

" 'Big Ticket' Cash Liabilities £'000 £'000 Eversheds 55 55 Solomon Hare 18 18 John Owen (CTC) 50 50 J Cleverly 100 100 Volvo VAT 45 45 Glan Harris 42 42 CFA 12 12 Downing Classic 16 16 Matrix 9 9 St Brides 2 2 Stock Exchange 7 7 Inland Revenue 500 500 Belmont Fee 10 10 866 866 In addition to the above I am aware we are now behind in some of our Finance Agreements and some of our Trade creditors are well overdue for payment. To get us back on an even keel we therefore need a cash injection now of over £1 million."

"Q (Mr West) Going back to paying for fuel in cash, that's pretty risky for a bus company, isn't it, because if you don't have sufficient on-board bus takings to pay for the fuel, you run the risk of running out of fuel whilst on the road, don't you? A (Mr Fowles) There's always that possibility. It was reasonably well controlled at the depot level. They made sure in most cases that they had sufficient fuel. Q (Mr West) But there were examples of 2 Travel buses running out of fuel whilst on service? A (Mr Fowles) I think there was one or two in the Llanelli depot where we introduced new vehicles and the tankage wasn't assessed properly."

"Q (Mr West) So wasn't it completely unrealistic to suggest that 2 Travel, at this stage, was in a position to spend £25 million purchasing other companies? A (Mr Fowles) We would have had to go back to the market. There had been other flotations since ours in the January. One fairly large London company had also floated. They had gone back to the market and acquired certain businesses. It was felt we could do the same."

"My involvement or my firm's involvement came first of all when I met Richard Needham, and that was in November, I think, towards the end of 2003. We then became involved and the report, that is – the first report, which was the February 2004 report, took a number of weeks. It's a long time ago and I'm going to preface a lot of what I'm going to say by saying this is from a memory point of view. It would have taken a number of weeks. The person involved in it was Nigel Ferrand, who was the senior manager who worked for me in the Cardiff office, and he undertook that work and … I would have thought it would have typically involved about three weeks of constant time doing that, of that sort of order."

"Q (Mr Smith) These figures on page 38, do they simply represent 2 Travel's expectations or were they in any way subject to due diligence by PwC? A (Mr Harrison) No, no, they were – we went through the exercise, as you would in any exercise of this nature. We went through it with the management and questioned them on it. Nigel Ferrand would have done that, and the judgment taken, based upon our view of Bev Fowles at the time – and it's throughout this, I have no reason to doubt his ability as understanding buses. He understood buses, he'd had a track record in the First Group, and therefore I believed his explanations behind these assumptions to be credible. Q (The Chairman) So it is all predicated on Mr Fowles giving you information that was not over-optimistic but was credible? A (Mr Harrison) I thought he was credible in his assessment of this. He had enough experience of this sector to be credible."

"The Financial Projections ("

" General • The dynamics of the new routes varies depending on whether they are commercial, tendered or infill. • Ticket income is assumed to increase over a six month period to its full potential. This is based on the profile of some Neath infill routes that commenced in late 2003. • As costs (fuel, tyres, additional labour costs, etc) are relatively fixed once the routes are operating, the services will incur losses during initial start up period. • Ticket revenues are based upon market research of the routes. This has identified current ticket prices and the number of passengers travelling on the routes. • It is assumed that the new service will attract 30% of all passengers using the corridors by month 6. Brand loyalty is minimal in this industry. Cardiff • The Cardiff routes are all infill. The gross margin is therefore higher than phase 1 or Llanelli as most of the fixed costs covered by the contracted school routes. • The routes are expected to incur losses until month 4."

"Q (Mr West) What does that reference to market research – what document does that refer to? A (Mr Fowles) It doesn't refer to any document, it's research that we did ourselves. Q (Mr West) So one can't find that written down anywhere? A (Mr Fowles) It would have been submitted to PwC at the time."

"? There is forecast to be little growth from the existing bus business. The growth is forecast to arise from the new routes described above. • During 2005 the 20 infill buses in Cardiff are expected to account for 50% of the growth."

"With reference to your memo of 12th June 2003 I would comment as follows: 1) The decision to set up Cardiff was taken over a year ago and the full implications should have been considered then. Even at that time a schools base of 14 vehicles was planned and the maintenance needs of the operation should have been considered and casted into tenders. 2) The current site was found and although totally inadequate a lease was entered into at not inconsiderable cost. We now have to get out of this site as quickly as possible (and explain to the plc board why we are doing this) and find an alternative and hopefully cheaper alternative. 3) Until an alternative premises can be found there is no solution to the no parts, no maintenance facility problem."

"I wrote to you all in February highlighting items that needed to be addressed in order for our new Cardiff commercial registration to be successful. To date not one point has been addressed. Our commercial registrations commence in approximately five weeks and we have nothing in place at the Cardiff depot. • Ticket Machines/Depot reader need to be purchased (at least 15 machines are needed) • Ticket rolls need to be purchased • Vehicles need to be purchased (approximately 10 are needed – examples of what is available are attached) • Said vehicles need to be painted • Destination/Number blinds need to be purchased The structure at the depot needs addressing: • There is no electricity or mains water at the new site • There is not enough office space at either the old or the new site • An additional controller needs to be appointed. I have spoken to one gentleman and he is interested in the post • The depot needs approximately 8 drivers. Gurkha's [ sic ] were promised but this has not yet materialised. I was intstructed [ sic ] to register these commercial routes as soon as possible. This was done and I am now being held back because of reasons beyond my control. Unless the problem is addressed quickly I will not accept any blame for the failure of these services to operate correctly in the future."

"I am still awaiting clearance to purchase ticket machines, destination blinds and vehicles and am further awaiting permission to install mains water and electric at the new depot. We are due to commence services on 19 th April 2004. The allows us approximately 18 working days in which to achieve an awful lot."

"I feel it my duty to inform you all in writing of the problems currently faced with our operation in Cardiff. I hope that you will all agree that with the resource that has been provided for the depot what has been achieved to date has been remarkable. However we have recently been given notice on one of the school contracts by Cardiff City Council and my fear is that we will start to lose one or two more if certain issues are not acted upon. You will be aware that, politically, we are not popular in the Cardiff area and the Local Authority is looking for the slightest mistake on our part to issue final warnings etc. Our main problem at the depot is lack of resource – both drivers and engineering. We were initially promised Gurkhas would be made available for the depot but this now looks increasingly unlikely despite housing being found for them at extremely competitive prices. Lack of drivers is a major barrier to increasing revenue at the depot as we are losing mileage on a daily basis. We do not have a coherent plan for going forward – we are still no nearer to getting a firm depot sorted out and until this is done we cannot move forward. I have been told to wait on getting water and electric into the depot due to high costs and cannot maintain vehicles effectively until this issue is resolved. This is leading to increased vehicle breakdowns (which was the reason for the termination of the above contract). If we wish the depot to become a success then firm and decisive action needs to be taken, and quickly – our actions to date, however, lead me to believe that we are not all pulling in the same direction for those depots east of Swansea."

"2 Travel Route No 250". (2) St Mellons to Cardiff City Centre (and back): "2 Travel Route No 245". (3) Pentrebane to Cardiff City Centre (and back): "2 Travel Route No 262". (4) Ely to Cardiff City Centre (and back): "2 Travel Route No 217". 2 Travel registered a fifth service with the Traffic Commissioner (Pentwyn to Cardiff City Centre: "2 Travel Route No 258"). Mr Fowles stated (Transcript Day 1, page 127) that "[i]t was always envisaged it would start as the others did. However, time constraints against us with bringing in driving staff meant that we had to notify the Traffic Commissioner that we wouldn't start it until November"

"White Service Route No 150". (2) St Mellons to Cardiff City Centre (and back): "

"White Service Route No 162". (4) Ely to Cardiff City Centre (and back): "

"Liveried Service Route Nos 49 and 50". (2) St Mellons to Cardiff City Centre (and back): "

"Liveried Service Route Nos 61 and 62". (4) Ely to Cardiff City Centre (and back): "

"…the four Cardiff routes partially overlap with other Cardiff Bus routes. Any particular bus route into Cardiff city centre overlaps with an increasing number of other bus routes into the city centre from other departure points, the closer to the city centre one is on the route..."

"The Traffic Commissioner has requested that you look into these allegations and advise us of your findings, as the Traffic Commissioner views anti-competitive issues seriously."

"2 Travel Group plc have complained to The Office of The Traffic Commissioner of experiencing anti-competitive behaviour from Cardiff Bus on routes that they both operate. As a result of a request from Traffic Area Office (TAO), monitoring exercises have been carried out on services operated by both 2 Travel and Cardiff Bus. These exercises were carried out over a 12 day period at various locations in Cardiff between 15.06.04 and 16.07.04. Monitoring reports consisting of 31 pages were completed and these are enclosed. [These reports were not, however, before the Tribunal.] They show all factual findings and results. A total of 760 departures were observed. Of these, 627 departures related to Cardiff Bus and 133 to 2 Travel. Of the 627 observations on Cardiff Bus services – 1 departure failed to operate. 1 departure operated late. Total punctuality 99.68% Of the 133 observations on 2 Travel services – 91 departures failed to operate (68.42%) . 24 departures operated late (18.05%) . 11 departures operated early (8.27%) . Total punctuality 5.26% In addition to these 133 observations, a further 34 were seen to be operating off their registered route."

"Also enclosed for your information are comparisons between departure times of 2 Travel and Cardiff Bus 'no frills' services on routes they both operate, i.e. Ely, Pentrebane and St Mellons. Although no anti-competitive behaviour was witnessed by ourselves, the comparisons have been compiled in order to show the closeness of the 'no frills' and 2 Travel services. All services departing within a minute of each other are highlighted in red on the reports. Prior to the monitoring exercises commencing we requested registered timetables from the TAO, in particular timetables referring to the Cardiff Bus 'no frills' services 117, 144 and 162. Timetables were forwarded to us, however no details were supplied specifically relating to the Cardiff Bus 'no frills' services 117, [144] and 162. Due to this we again contacted TAO and were then supplied with a copy of a letter between Cardiff Bus and Mr Michael Douglas of TAO dated 16.04.04, (annex 4) from which we concluded that there was no reason to suspect that the 'no frills' services were not registered and were in fact part of existing registrations."

"If you observe the figures as they are, yes, it would appear so. However, monitoring at that time was not a very precise science. It had only just been started by the Traffic Commissioners. Our vehicles were being predated by the white services. The white services hadn't been registered in any way with the Traffic Commissioner. We felt them to be not legal. They would follow our buses, am and pm, they would follow them all day. It was felt by a lot of our drivers, to start with, that it would be sorted. It wasn't sorted. June and July is almost three months after it had started. The Traffic Commissioner didn't decide to send anybody out to look at it for that length of time, by which time I think both companies were not adhering to some of the routes that they were supposed to. Drivers would drop short, they wouldn't complete the journey, in an attempt to get back on the next journey in front of the white bus, try and shake the white bus off. So I think it all depends where the monitors were standing, where their observations were made. I don't think they say where their observations were made. But, for instance, if they were made in Cardiff City centre, then quite clearly, if a bus was meant to come down St Mary's Street and on to Wood Street, the driver may have decided to come down and do the turn, ready to go – to go back, missed the last stop, particularly if he didn't have any passengers on board. I think by other means of measurement, and some of Cardiff's own disclosures, I believe, indicate that we were operating up to 70 per cent of our services."

"Reading through the pack I am extremely concerned about the losses and the dire state of the balance sheet where debt levels have risen to £5.46m including creditors, many of which I am sure will be terribly overdue. Given that these figures were at 30 April and that you made a cash loss of over £100k in April I can only assume the position is now much worse. Could you please meet up urgently next week to discuss the position. I would like Graham Spooner to attend the meeting also. I think the time has now come for some tough decisions."

"I am very concerned about your cash position. You appear to have missed interest paid out of your cash flow figures and you have included the whole of your new overdraft facility in cash inflows the day you got the overdraft! You started the year with a £300k overdraft, you have spent further cash in the year of £540k and your stock and debtor position has worsened by £190k giving a total of £1.03 million of deficit as at 30 April. This has been financed by (yet again) increasing your creditors by £280k and loans secured on the property of £670k. It looks to me therefore that you have already used up you [ sic ] new bank facility and are now racking up the creditors to finance the business. There is no information in the pack showing the amount of the facility currently used or he [ sic ] amount unutilised. If the overdraft was used the day you got it this has serious implications and I would like to know how the business has been financed since then. Please could you let me have these figures as soon as possible and let me have your comments on my analysis."

"89. What the reference to the overdraft having been used on the day it was obtained appears to mean is that the increased funding provided by Barclays in exchange for the personal guarantees from Messrs Short and Francis, which had been intended to provide the working capital required for the development of the new routes as set out in the PWC report, had instead all been used up immediately in paying the outstanding creditors. Those loans could not therefore be used to provide the working capital which PWC had identified as being needed for the development of the new routes. 90. It is important to recognise that the infringement had no effect at all upon the company's financial position as discussed in these messages. The Cardiff in-fill services only started on 19 April 2004, whilst the figures under discussion are as at 30 April. Further, as explained above, under the PWC report, the Cardiff routes were expected to be loss-making for the first four months of their operation in any event. Thus, even if the routes had performed as expected, there would have been no profits from them at this date."

"Cheque Book payments not being properly recorded with stubs not being filled in. Payments being made without full supporting documents. Round sum payments being made with no allocations made. Payments being made by third parties with no records being kept or advised to accounts. Cash payments made with no advice to accounts department. Invoices not being received or passed to accounts department. Acceptance of "faxed" and "copy" invoices. High staff turnover in accounts department, lack of training and systems familiarisation. Staff shortages. No formal accounts procedures. Over reliance on "cash"

"Q (Mr West) Many of these problems had been identified by Mr Waters at the time he arrived at the company, hadn't they? A (Mr Fowles) Yes, certainly. Q (Mr West) Two years later, no progress appears to have been made? A (Mr Fowles) Most of them were under the remit of Mr Waters. Q (Mr West) Given these difficulties, it would be almost impossible for the company to keep reliable accounts? A (Mr Fowles) As he says in his next line, many of these can be addressed quite quickly. They were small systems failures. Chequebook payments not being properly recorded with stubs. I mean, it's a memo. It's his department."

"…But if you look at the nature of the report, the report in 2004 [referring to the June 2004 PwC Report] is marked as a draft. I'm not sure if it was finalised in those forms. But it also, it doesn't have the same degree of commentary and so on [as the February 2004 PwC Report]. This was to do with the preparation of a financial model in order to model financial projections for the business. So that was the purpose of that second report."

"The company, by the time we were talking about her involvement, was clearly under pressure, with backlogging creditors and creditor payments, so that's the feedback that we had at the time, that they were under financial pressure."

"Q (Mr West) So yet again, some projections for the future, which don't appear to relate in any way to the company's actual performance in the past? A (Mr Fowles) I disagree. We had been awarded quite a lot of contracts from the September and the bus revenues were expected to flow in, as we've said, after the initial four month period."

"On the basis of the assumptions used, the peak overdraft requirement is projected to be £927k in April 2005."

"Further to our discussions I am writing to confirm that Nigel Short and I are today making available to 2 Travel Group Plc "the Company" an unsecured loan (in the short term i.e. 28 days) in the sum of £937,000 in order to enable the Company to meet its anticipated working capital requirement as shown in the recent PWC working capital projection. The loan is being made on the condition that: 1) The company provides Nigel and myself with a legal charge over its property and depot at Upper Bank Swansea and any land acquired from the local authority for a new access such legal charge to be on normal commercial terms. 2) The company provides Nigel and myself with an option to acquire the property and depot at Upper Bank (referred to above) in addition to any land acquired from the local authority for a new access. The option price will be current market value as of today's date to be assessed by King Sterge [ sic ] (such value not to be less than £2m) plus 20% [of] any profit realised on a resale. This option will not be exercisable within 3 years 9 months of this letter unless an act of default occurs. 3) The company enters into the legal charge and option referred to in 1 and 2 above within 28 days of this letter. On the basis that this is agreed, our facility is available for draw down by the Company as from today in line with the PWC projections. We understand that City Financial Associates Limited will be referring to this letter in their forthcoming discussions with the AIM team."

"Mr Callaghan Just going back to the PAYE NI, the letter from Fordham Warren (?) shows a payment of £465,000. Can I ask where that money came from? Mr Francis Yes, it came from Mr Short and myself, sir. Mr Callaghan Is it an unsecured loan to the company at the moment? Mr Francis It is, which we've guaranteed on repayment date. Mr Callaghan So you actually put the cash into the Company? Mr Francis £150,000 was put in immediately, sir and £300,000 by way of a loan. Traffic Commissioner So the £165,000 you say was put in, was that a gift or...? Mr Francis No, Sir, no its a loan. Traffic Commissioner Sorry, I thought you said £300,000 was a loan. Mr Francis Yeah, it's all a loan, Sir. Traffic Commissioner It was all a loan. Mr Francis We have a charge against all of it."

"Directors' loan The Board of 2 Travel Group plc (the 'Company') announces that Huw Francis and Nigel Short, both Directors of the Company, have provided the Company with an unsecured loan of up to £937,000 for working capital purposes. The loan has been made on condition that security will be granted to Mr Francis and Mr Short over the Company's freehold property and depot at Upper Bank, Swansea, and that they are given an option to acquire this site from the Company on agreed terms. A further announcement will be made at the time that formal agreement on the terms of security and the option have been reached."

"Taking these two things together, the prohibitions and the non-display of the destinations, bearing in mind that the prohibitions are not at the serious end and trying to come to a conclusion that I believe is proportionate to what has gone wrong, my decision is to curtail the maximum number of vehicles for one month, at the month of September, from 110 to 100. I am aware that that is not likely to have much practical impact, but it does flag up the issues that they are not acceptable and that the Company have got to improve in both these regards to a very much higher standard and it is a marker for the future if you do not fail [ sic ] to put your house in order."

"18. Of the 573 services monitored by Mr Anderson, 109 (19.0%) failed to run at all, and 61 (10.6%) ran outside the limits – almost 30% non-compliant against the 5% which is acceptable. While Neath's services improved between the autumn and the spring, the very poor performance recorded in Llanelli is consistent with the County Council's reports. I am staggered by the Newport/Cwmbran situation, where services hadn't even started to run nearly two months after the company gave notice they were to start – in other words, 100% non-compliance! Whatever the perceived greater need for drivers elsewhere, such behaviour is against the spirit and letter of the law, and cannot be tolerated. The overall non-compliance including Newport/Cwmbran would be well-over 50%. Decision 19. I find that, under s26 of the Transport Act 1985, the company has without reasonable excuse failed to operate registered local services. I attach a condition to the licence that, for a period of 12 months from the date of this decision, the operator shall not use vehicles on any local services other than those registered at today's date. In regard to the Gwent Joint Passenger Transport Area (the unitary authorities of Blaenau Gwent, Torfaen, Monmouthshire and Newport), the period is extended to two years because of the unacceptability of the company's conduct. … 21. The Transport Act 2000, s155, entitles me to impose a financial penalty on an operator in addition to any action under s26 of the Transport Act 1985. Any penalty must be proportionate to the company's failures to operate local services. The company has told me (subsequent to the Public Inquiry) that about 52 vehicles are engaged on schooldays on local bus services. Under our guidelines, a 30% compliance failure normally attracts the maximum penalty of £550 per vehicle, which for the vehicles engaged in local services would be a total of £28,600. To achieve this, I impose a penalty of £260 per vehicle in respect of the 110 vehicles which the company is licensed to operate. The sum is payable by the company to the National Assembly for Wales."

"Dear Huw and Bev As you know we were astonished to learn yesterday afternoon that option and loan agreements had been entered into, albeit conditionally, prior to the company's lawyers having consulted with us and Graham Spooner who represents the Independent Board. I note that you (Huw) deny that they have been entered into although this contradicts the telephone conversation and e mail I have had from your lawyers. Bev spoke to me at 14:30 last Friday and did not tell me that he had been to the lawyers to sign the paperwork or that he was on his way there. Getting David Fowles to countersign when David is, as far as I know, not involved in the transaction, appears to me to have been done in order to avoid asking Graham Spooner who was leading the transaction for the Independent Board, as you would have know [ sic ] that Graham would have refused to sign the documents at this stage. It remains unclear why the documents needed to be entered into with such haste. Your solicitors state that it was done in order to alleviate the company's funding difficulties but you tell us that this was not the case and that your loan monies had been released to the company previously. Someone is not telling us the truth. I was also astonished to learn that despite all of our requests to be kept informed, the company had received a demand from the Inland Revenue 2 weeks ago for payment of a substantial sum (which I understood from our conversation last night to be £400k) and that this sum has been paid out by means of Huw passing over funds to Bev for him to make the payment. I do not understand this process and I do not know when or if the payment has been made. The only mitigating factor as far as I can see is a comment made by Richard Needham last night to the effect that the IR had reached agreement with you earlier in the year and you have spent the last 2 weeks negotiating with them to get them to stand by their original agreement. Without telling us you have also, apparently increased the amount of your and Nigel Short's loan to the company, you say to meet the shortfall in working capital arising from the increased payment to the IR. You say that you have checked the additional requirement by rerunning PWC's working capital model. You, as directors of an AIM quoted company, had a clear duty to report these matters to your fellow board members and to keep us in our capacity as your nominated adviser, fully informed. You are in clear breach of your obligations to us as set out in our nomad appointment letter."

"Further to my email to Robert yesterday and following the subsequent meeting of Independent Directors (myself and Sir Richard Needham) and 2TG's Nomad yesterday evening, there will be an announcement shortly which I will circulate when it is available as it provides a useful summary. It is intended that a circular will be despatched to shareholders early next week with an EGM scheduled for 29 October 2004 at Newport (Holiday Inn) in Wales which you may wish to attend (I will be there). 2TG's funding is being provided by Barclays (£2.2m, of which £1.625m is either being personally guaranteed by Messrs Short and Francis) plus loans/undertakings to 2TG totalling £300k from Messrs Francis Short and Bev Fowles, making total debt facilities (exclusive of vehicle and equipment finance and factoring) of £2.5m. The peak requirement in the PwC/Management Model is £2.367m in March 2005. This assumes that all debt is serviced (with £28k VCT interest paid in September 2004 and £12k quarterly thereafter). All arrears of fees (including Matrix, CFA and NxD's) [we assume this is a reference to the non-executive directors of the company] will be paid prior to the EGM on 29 October 2004. Messrs Short and Francis are being given the option (for 3 years from 5 October 2004) to buy the Swansea property for £2m plus a 20% enhancement in value for any planning consents obtained). The option cannot be exercised before May 2008 without 2TG's consent. King Sturge have valued the existing 4.7 acre site at £1m at present whilst Redrow have apparently made an indicative offer of £600k net per acre (with housing consents in place). In the circumstances, I would commend this deal to you as the alternative is insolvency. 2TG is currently losing c. £100k per month and shareholders funds have been reduced to c. £200k (before any impairment review) and the new management team have effectively been provided with the resources to turnaround this business which may still require (in due course) a debt-equity swap or deeply discounted underwritten rights issue to address its highly geared balance sheet."

"Trading statement In our interim results for the 6 months ended 28 February 2004, we commented that the continued expansion of bus routes is having a positive effect even though the year had started slower than expected. Whilst we were successful in achieving our objective of registering a number of new routes in key expansion areas, shortages of working capital, drivers and suitable vehicles meant that we were unable to operate the services at the intended levels. Our shortcomings were highlighted in a report of the Traffic Commissioner issued on 25 August and we committed to the Commissioner that we would operate all registered services in Gwent from 6 September onwards, which we have done, and improve performance in Llanelli and Neath also. These operational improvements have become possible given that we have located the vehicles we require at suitable prices, recruited additional drivers, and the further working capital facility announced on 13 August. … Against this background the Company's performance for the year to 31 August 2004, although not finally determined, was disappointing. In addition to not being able to expand the bus network as planned, we, in common with others in the transport sector, suffered from rising fuel, insurance and wages costs. Direct costs in the last 3 months of the year were almost half of costs in the first 9 months. On 30 September we announced the appointment of Hugh Jenkins as our new Finance Director. Hugh's first task is to review and strengthen the financial reporting systems and controls. PricewaterhouseCoopers has been appointed as auditors and its audit will follow completion of Hugh's review. … Related party transactions On 13 August 2004 the Company announced that Huw Francis and Nigel Short, both Directors of the Company, had provided the Company with an unsecured loan of up to £937,000 for working capital purposes. In fact, the facility that was provided to the company by Huw Francis and Nigel Short was in the aggregate amount of £975,000 and comprised guarantees in respect of monies advanced to the Company by the Company's principal bankers. This facility was made on condition that security would be granted to Mr Francis and Mr Short over certain property and assets, including the Company's freehold site and depot at Upper Bank, Swansea and that they would be given an option to acquire the site from the Company. A recent update of the earlier working capital review revealed that the facility referred to above would not be sufficient for the Company's requirements. As part of agreeing the security agreement and option agreement with Huw Francis and Nigel Short, they have agreed to facilitate the Company's revised requirements by giving an undertaking, direct loans, and also by agreeing to make available guarantees in respect of part of the Company's indebtedness to its principal bankers, such guarantees in aggregate amounting to £1.625 million inclusive of the previous guarantee commitments made by them. These agreements are classified under the AIM Rules as a Related Party Transaction and require the approval of shareholders under the Companies Act. Accordingly, a circular outlining these agreements will shortly be sent to shareholders together with notification of an Extraordinary General Meeting. … The Independent Directors, comprising Sir Richard Needham, Bev Fowles, David Fowles and Mentor UK Limited, after consulting City Financial Associates Limited, the Company's Nominated Adviser, believe that the terms of the Related Party Transaction are fair and reasonable insofar as the shareholders are concerned. … Board changes 2 Travel Group Plc also announces today that Martin Cook, aged 49, will be joining the Board of the Company as Managing Director with immediate effect. Mr Cook is a highly experienced commercial Managing Director and is currently the Managing Director of Betws Anthracite Limited, a position that he has held since 1993. Bev Fowles is stepping down as Chief Executive with immediate effect, but Bev will remain on the Board as Director of Bus Operations. They will form a strong executive team along with, Hugh Jenkins (the new Finance Director) and David Fowles."

"It transpires that £300k of the Bank's facilities to 2TG were due for repayment on 31 October 2004. This was not reflected in the PwC model..."

"25 …Either an operator has sufficient funds to satisfy the requirement, or he hasn't. There is no discretion for me to exercise if I find there are insufficient funds. I have been more than patient in this case in awaiting evidence of what money is available. Based on documents provided over the months since the call-up letter, it appears that, not only is there too little money available for 110 vehicles, there is not enough for 50 or even 10. 26. The latest letter from Backhouses contains no evidence of finance, just more general statements to the effect that they have money available. While funds may be available or promised, they are of no value to financial standing until held by the company. 27. If I revoke the licence without disqualification of the company or directors, they will be free to apply for a new licence. Given that the company will be structured very differently from now on, it seems to me preferable that they should follow this course, and I will be able to consider all matters, including finance, afresh in the new circumstances. I believe this is the pragmatic, and indeed the right, solution in all the circumstances. 28. If as is likely this involves a pause in their operation, this will enable them to "take stock" and plan properly for what, if the application is granted, will need to be a very much better service than in the past. Decision 29. I find the company no longer satisfies the requirement to be of appropriate financial standing, and revoke the licence with effect from 2359 hours on 22 January 2005…"

"Q (Mr West) You'll remember that under the terms of the option it couldn't be exercised before May 2008, without the company's written consent? A (Mr Fowles) Mm-hm. Q (Mr West) So this presumably also counts as the company's written consent for those purposes, does it? A (Mr Fowles) Yes, I would think so. Q (Mr West) It also couldn't be exercised before the grant of planning permission. And I see in the second paragraph there at the end: "

"1. Cardiff Bus' predation: (a) diverted passengers, and hence the revenue from such passengers, away from 2 Travel (and to Cardiff Bus instead); (b) (and intimidatory tactics) caused driver shortages which: (i) prevented 2 Travel from operating the full number of planned services; (ii) prevented 2 Travel from operating the 258 service from November 2004 (as agreed with the Traffic Commissioner); (iii) had consequential effects for 2 Travel's services in Swansea, Llanelli and Cwmbran due to drivers being diverted to Cardiff; and (c) prevented 2 Travel's infill services from growing in line with 2 Travel's previous experiences in Neath and achieving optimal route realisation, which, together, caused 2 Travel to suffer reduced revenues. 2. The reduced revenues caused: (a) 2 Travel to suffer losses (both on the infill routes and by the 2 Travel business as a whole) rather than the anticipated profits; and (b) a negative effect on 2 Travel's cash flow and working capital requirement. 3. From the commencement of the predation to the insolvency of 2 Travel, 2 Travel's management and staff were diverted from their normal revenue generating duties by having to deal with the predation, causing significant disruption to the 2 Travel business, thereby exacerbating the impact of Cardiff Bus' predation on 2 Travel's cash flow and working capital requirement. 4. The impact on 2 Travel's cash flow and working capital requirement caused 2 Travel to: (a) abandon its expansion plans; (b) grant security over and an option to purchase the Swansea Depot in return for an increase in its working capital requirements; and (c) close the Cardiff depot (and the Cwmbran depot) and retreat to Swansea and Llanelli. 5. Unable to recover from the losses caused by Cardiff Bus and the consequential impact on 2 Travel's cash flow and working capital requirement, 2 Travel entered insolvency, thereby causing 2 Travel to: (a) suffer the loss of future profits; (b) suffer the loss of a capital asset (the business of 2 Travel as a going concern); (c) lose the commercial opportunity to grow the 2 Travel business; and (d) lose the commercial opportunity to develop the Swansea Depot."

"92. The vast majority of our drivers, almost all of them, were employed on a full-time basis… 93. We historically had very little casual absenteeism. When a driver was absent he was either genuinely ill, which wasn't very often, or he wasn't coming back. We had experienced driver shortages in 2001 in the Swansea area, but the reason for this was that 2 Travel was growing and acquiring businesses and some of the drivers did not come over with the acquired business. If there was a driver shortage it would have been 2 or 3, nothing serious as such and nothing that managers couldn't cover."

"Whilst there was a national shortage of bus drivers, we didn't suffer more than anyone else. We used innovative methods of coping with this national shortage. We hit upon the idea that armed forces personnel were finishing in their droves, and there were big transport sections in the RAF and the Army. Somebody just happened to mention that the transport section of the Army is largely operated by British Army Ghurkhas. So we embarked upon recruiting Ghurkas."

"Alun to shedule [ sic ] in advance for November & December so as to organise excess drivers who will be required, also to organise drivers times to collate Park & Ride with scheduled runs. Alun expressed concern to going ahead with 4 new contracts until we can be assured that we can get enough to [ sic ] drivers. It was suggested that we employ 17/18 yr old apprentices in the workshop who can be used on buses in peak periods." (2) The minutes of a 2 Travel meeting held on 12 September 2002 record: "

" Engineering Staff used for Driving School/Contracts This is detrimental to our own discipline, as the scheduled maintenance is well in arrears and not completed to the standard required."

"At the time the infill services commenced, we had 18 drivers in the Cardiff depot. At the start of the infill services operating, the four routes we were operating had three buses on each of them, so we had 12 drivers on the infill services. We had two drivers working all day on the 98 and 99 services, which meant we had four drivers spare, when they were not otherwise engaged on school contracts."

"As well as the 2 drivers who failed to turn up at the start of the infill services, a further driver left in the second week. The hard core stayed right the way through, but I would say there was 20% that probably left within 3 months. Some were replaced, but not all. Others would come in and not stay long, they just didn't like these White Buses, it was intimidation and they didn't like it, they couldn't handle it. I don't know many people that could."

"5.1.1 The staffing position, particularly with regards to driving staff, had improved considerably in the month with no leavers. 5.1.2 Since the end of the reporting period the Company had successfully recruited and introduced 20 Gurkha Transport Regiment soldiers into the Swansea and Llanelli depots. The Company Secretary stated that the progress made by the Company in this recruitment was unique and that the Gurkhas work ethic was beyond reproach. They had settled to their tasks very quickly."

"Driver availability for new services was discussed. Estimated that over 30 drivers are needed across all depots to achieve PVR. CEO told CAW [Mr Waters] that Cwmbran had sufficient drivers. This is not the case. Estimated that 16 drivers are needed at Swansea (just for Local Bus Services), seven at Cwmbran and five at Cardiff. CEO told CAW [Mr Waters] to tell meeting that Cwmbran services to commence Monday 5 th July. DRF [Mr Fowles Jnr] concerned where resource would come from."

"5.1.1 The Staffing position continues to improve with a significant reduction in staff leaving. 5.1.2 The Ghurka training has now finished and all 21 are now in full time employment in Llanelli and Swansea depots."

"It has been some time since I last kept you updated on the situation in Cardiff. Competition Cardiff Bus are still operating illegally and unfairly along routes served by 2TG. Evidence suggests that approximately 6 pax per journey are being carried by these white "battle buses"

"There are currently no planned interviews or new starters waiting to join the Company in Cardiff. It is interesting to note that there appears to be a number of current employees who are researching the job market. Feedback indicates a frustration at the lack of progress by the authorities in curbing Cardiff Bus and the tactics adopted against 2 Travel."

"Following the loss of N857 clutch whilst away on tour over the weekend I decided to spend half an hour with the offending driver to firstly explain in monetary terms the loss incurred and also the operationally disruptive nature that his abuse of the vehicle caused. The driver concerned is a nice enough guy who I am absolutely convinced did not burn this clutch out deliberately. Gary and myself then took the driver on a short driving assessment and within a minute of driving it became apparent that whilst the drivers [ sic ] road awareness and vehicle positioning skills were adequate his use of the clutch pedal was appalling."

"It is clear from the witness statements and the oral evidence that the predation severely distracted 2 Travel's management and staff from carrying out their proper functions and that a considerable amount of time was wasted dealing with matters that arose as a result of the predation. It is, however, difficult to specifically quantify the sum owed to 2 Travel for this loss and 2 Travel accepts that the Tribunal may not be able to award a significant sum under this head of loss as a consequence."

"You have to understand at the time, we didn't fully understand, I suppose, the level of the predation. Certainly, the management resources in the business, the executive management resources had become increasingly swamped by dealing with the issues. It became all consuming really, for the management by the end, even to the detriment of other aspects of the business."

"We agree that it is for the Tribunal to determine whether there is sufficient evidence that 2 Travel experienced any wasted staff and management time in dealing with any problems related to the running of the White Services. We agree that we have not seen contemporaneous documentary evidence of this. Mr Good notes that this issue is addressed in the statement of 2 Travel's witnesses of fact."

"The resolution is in my view to take a capital value of the hypothetical business at the time at which it became clear that it could not proceed, that is, when it was lost. That is the best reflection of what UYB...[has] been deprived of. That value should be based on the value which the business would have fetched in the open market at that date. That figure will reflect the fact that the new purchaser would be running the business and taking the risks in the place of UYB. It would reflect the market view of the value. It will carry appropriate interest at the date of the valuation."

"The position in respect of the headings is as follows: 1. Adult – This relates to all adult classified tickets including single, day return or unlimited day travel tickets purchased on a bus. 2. All – This relates to any passengers boarding with a pre-purchased pass. The duration of the pass could be daily, weekly, monthly or annual as well as for the period of an educational term. This category does not include return tickets or 12 journey child tickets, which are covered by 'Use' (see below). 3. Child – This relates to all child classified tickets including single, day return or unlimited day travel tickets and also a 12 journey ticket purchased on a bus. 4. Cycle – This relates to any passenger boarding with a bike. This applies only to the Sunday Brecon service and is not applicable to the white service. 5. Family – This relates to a day ticket for a family purchased on a bus. 6. Swift – This relates to any passenger boarding with a smartcard containing a monthly ticket. This category is therefore analogous to 'All'. 7. Use – This relates to any passenger boarding with a return ticket or a school child using a 12 journey ticket. In both cases, the driver would use the punch on the ticket to punch a hole in the ticket. 8. Welsh Conc – This relates to any passenger boarding with an all Wales concessionary pass entitling them to free travel."

"A (Mr Good) …All I had for white bus was the total number of passengers per month and the revenue for each of the five different types, whether it's full fare, concession, et cetera. And so, in order to work out the passenger numbers, I had to work back from the revenue to passenger numbers by type of passenger. Q (Mr Smith) I see. So just to go through your various revenue heads. "

"...There are two aspects of customer conduct. First, some customers commit to a particular operator by purchasing a single-operator multi-journey ticket. Second, customers place a high value on time saved and certainty, relative to other factors such as price or quality. This means that customers who are not already committed to an operator prefer to catch the first available bus when at the bus stop and to minimize waiting time (regardless of any differences in relative fares and service quality between operators)."

"Well, friendly drivers isn't the exclusive province of any one bus company. I wouldn't think that whether the drivers are friendly or not is a major factor. It's certainly in the list that I talked about, after reliability and frequency. It's a nice to have, rather than a major driver of demand."

"Q (Mr Smith) ...clearly frequency of service must affect the extent to which a passenger pre-plans his journey? A (Mr Brown) Yes. Q (Mr Smith) In the sense that if your bus stop is served by buses coming along every couple of minutes, you don't have to pre-plan. A (Mr Brown) Yes. Q (Mr Smith) Whereas if you have a bus stop which perhaps has two buses stopping an hour, you will plan ahead. A (Mr Brown) Yes. Q (Mr Smith) I get the sense from your answers that the factors that will determine choice of carrier are different, according to whether you are looking at a very frequently stopped bus stop or infrequently stopped bus stop? A (Mr Brown) Yes. I think that's basically right. We talk about frequent services at every 15 minutes and every 10 minutes. At 15 minutes they are on the cusp of becoming a frequent service. At 10 minutes, we describe it as a turn up and go service, and the reason for that is 10 minutes is believed to be an acceptable waiting time. If you miss your bus, it's somewhere between 0 and 10 minutes to go. If it's less frequent than that, then you do tend to plan your journey. There are many factors in how you might plan your journey and the most – the one I'm on, at best, an infrequent service, it's every half an hour, and I tend to look at when I'm trying to get to work and then you work back from that to find out the time of the bus that will get me to work for that time. That's probably the main – it's different for me, of course, but in general, people will look at the bus that will get them to where they want to go at the time. Q (The Chairman) So you do go to work by bus, do you? A (Mr Brown) I do both, but I frequently do, yes… So yes, I think generally it's about finding the convenience of the bus that will get you where you want to on time. Outside of that, if you're totally indifferent as to when you travel, then there may be other factors that come into it. Q (Mr Smith) And those other factors will be things like reliability and quality of service? You put reliability as the first key factor? A (Mr Brown) Yes. Reliability, followed by frequency. Q (Mr Smith) It just struck me, if you've got a frequently served bus stop, just how important is reliability? Will you surely not just get on to the next bus? Or will you say: I'm not going to get on this bus because I'm worried about reliability? A (Mr Brown) In those situations, I think the frequency trumps reliability because, effectively, it's overcome that problem, because even if the bus service is a little bit unreliable, you've still got a bus every 2 or 3 minutes on a frequent corridor."

"This goes to the PwC report, 30 per cent market share estimate, and re-works some calculations of Dr Niels in a way that was not put to Dr Niels at trial. We say this approach is simply unacceptable. This is inadmissible new evidence, unsupported by an expert's report and not put to our expert for comment. That sort of approach again should form no part of the Tribunal's conclusions in this matter. The Tribunal's task is, if I may say, a difficult one possibly, but making sense of the evidence that was given at trial, and not subsequent attempts to re-jig it."

"...Cardiff Bus says that the counterfactual additional revenues are not recoverable by 2 Travel in these proceedings. In the first place, 2 Travel's claim in these proceedings is for lost profits ...Since the Cardiff in-fill services would not have been profitable, there would never have been any such profits. More fundamentally, however, it does not amount to a valid claim for damages for a Claimant to say that, although the part of its business which was affected by the infringement would always have been loss-making even if there had been no infringement, by reason of the infringement it was even more loss-making than it would otherwise have been. Such a claim founders at the causation stage, because all of the losses would have been avoided if the Claimant had not operated an unprofitable line of business in the first place. Furthermore, by continuing to run a line of business which was never going to be profitable, the Claimant failed to mitigate its loss."

"... if, but only if , the sum [awarded as compensation] is inadequate to punish [the defendant] for his outrageous conduct." (Emphasis added.)

"In the court below Mr Symons [counsel for the defendant] had conceded that the defendants' servants might be within the first category. However, before us he sought and was granted leave to withdraw the concession. At the time of these events the defendants were a nationalised body set up under statute for a commercial purpose, namely the supply of water. They have since been privatised, but carry on essentially the same functions. Although it is conceivable that governmental functions could be delegated or entrusted to a nationalised industry with appropriate powers to carry out such functions, perhaps for example with powers of entry and search, I do not think it can possibly be argued that the defendant's servants or agents were performing such a function in this case. A serious mishap had occurred in the course of the defendants' commercial operations, their reaction to it was open to serious criticism if the allegations in the statement of claim are true, as they must be assumed to be for the purpose of this case. But their conduct was not an exercise of executive power derived from government, central or local and no amount of rhetoric describing it as arbitrary, oppressive, unconstitutional or high-handed makes it so. It would have been no different if the defendants had already been privatised and their servants were answerable to a board of directors and the shareholders rather than a board set up under statute."

"If the defendants' conduct was as pleaded, as we must for present purposes assume, it was highly reprehensible, but the conduct complained of was quite unlike the abuses of power which Lord Devlin had in mind and I cannot regard the defendants, for any purposes relevant to these claims, as wielding executive or governmental power. They were a publicly owned utility acting as monopoly supplier of a necessary commodity, enjoying certain statutory powers and subject to certain obligations, but they were not acting as an instrument or agent of government."

"In Rookes v Barnard [1964] AC 1129 , 1226, Lord Devlin drew a distinction between oppressive acts by government officials and similar acts by companies or individuals. He considered that exemplary damages should not be available in the case of non-governmental oppression or bullying. Whatever may have been the position 40 years ago, I am respectfully inclined to doubt the soundness of this distinction today. National and international companies can exercise enormous power. So do some individuals. I am not sure it would be right to draw a hard-and-fast line which would always exclude such companies and persons from the reach of exemplary damages."

"Where a defendant with a cynical disregard for a plaintiff's rights has calculated that the money to be made out of his wrongdoing will probably exceed the damages at risk..." (Emphasis added.)

"...either knowing it to be untrue or quite reckless whether it is true or not, and with full knowledge that it is going to hurt somebody, but he published that statement after a cold and cynical calculation of profit and loss..."

"...the defendant, at the time that he committed the tortious act, knew that it was unlawful or suspecting it be unlawful deliberately refrained from taking obvious steps which, if taken, would have turned suspicion into certainty. While, of course, it is not necessary to prove that the defendant made an arithmetical calculation of the pecuniary profit he would make from the tortious act..., it must be a reasonable inference from the evidence that he did direct his mind to the material advantages to be gained by committing the tort and came to the conclusion that they were worth the risk of having to compensate the plaintiff if he should bring an action."

"…(i) knowledge that what is proposed to be done is against the law or a reckless disregard whether what is proposed to be done is illegal or legal, and (ii) a decision to carry on doing it because the prospects of material advantage outweigh the prospects of material loss."

"An ill disposed person could not infrequently deliberately commit a tort in contumelious disregard of another's rights in order to obtain an advantage which would outweigh any compensatory damages likely to be obtained by his victim."

"On occasion conscious wrongdoin g by a defendant is so outrageous, his disregard of the plaintiff's rights so contumelious, that something more [than compensatory damages] is needed to show that the law will not tolerate such behaviour..."

"...the essence of the conduct constituting the court's discretionary jurisdiction to award exemplary damages is conduct which was an outrageous disregard of the plaintiff's rights ..."

"The minimum threshold is that the defendant has been subjectively reckless – to use criminal law terminology. The notion of 'outrage' imports the element of judicial discretion that we believe is inevitable, and essential, in this area. Factors that will no doubt be relevant in deciding whether conduct is not merely reckless but outrageous will include whether the wrong was intentionally committed, the extent and type of the potential harm to the plaintiff, and the motives of the defendant." (Emphasis added.)

"...frequently the situation is neither clearly white nor clearly black… Instead there is a gradually darkening spectrum which can be described with labels such as clearly authorised, probably authorised, possibly authorised, wholly unclear, probably authorised and, finally, clearly unauthorised."

"I do not accept this submission. The Commission decided in principle that fines should be imposed on the Aventis companies. It is true that by the application of the Leniency Notice, those fines were commuted to zero as a result of Aventis' conduct as whistleblower; but the starting point of the application of the Leniency Notice was the finding of unlawful conduct coupled with the imposition, in principle, of a fine. The application of the Leniency Notice serves the important policy aim that it is of even more importance to encourage whistleblowers than to punish participants in a cartel. In my judgment the national court should not undermine that policy by an award of exemplary damages against a person who has had his fine commuted as a result of the application of the Leniency Notice."

"8.6 Sections 40(3) and (4) of the Act provide that a person is immune from the effect of section 36(2) if his conduct is conduct of minor significance. The OFT may withdraw that immunity if as a result of its investigation the OFT considers that the conduct is likely to infringe the Chapter II prohibition. Conduct of minor significance is defined, pursuant to section 40(1) of the Act and Regulation 4 of the Competition Act 1998 (Small Agreements and Conduct of Minor Significance) Regulations 2000 (the Regulations), as conduct by an undertaking the applicable turnover of which for the business year ending in the calendar year preceding the one during which the infringement occurred does not exceed £50 million. 8.7 Applying the provisions of the Regulations and, through section 60 of the Act, applying the meaning of the term 'undertaking' under EC law, the OFT considers that the applicable turnover of Cardiff Bus does not exceed £50 million. Accordingly, Cardiff Bus benefits from immunity provided for in section 40(3) of the Act. The OFT can decide to withdraw the immunity from financial penalties in circumstances where it considers that it would be appropriate to do so. The OFT does not propose to do so in this case."

" Competition ... The meeting noted that 2 Travel Ltd have recently obtained an increase in its operator licence provision at Wentloog to 45 vehicles. A numbers [ sic ] of actions were being taken to address the potential for a competitive attack in the run up to Christmas, including the retention of surplus vehicles."

"This way we can really do what we like without registering specific competing services."

"If you wish to be considered for a driving role protecting your Company's status, reputation and profitability, in a highly professional manner, on routes shortly to be facing competition please apply in writing to Dave Cole, Assistant Operations Manager by Friday 19 th March 2004."

"We are about to encounter a dose of heavy competition in Cardiff. I attach a draft of an article that will appear in our internal house magazine entitled "

"The Swansea/Cwmbran based AIM (Alternative Investment Market) Company 2 Travel has now registered competitive local bus routes from Ely, Pentrebane, St Mellons, Llanrumney and Pontprennau to start operating Monday 19 th April. This follows 2 Travel's expansion in to local services in Swansea, Llanelli, Neath and other areas. It is in line with this Company's aggressive business plan. The competition is likely to be low grade using a mixture of second hand double and old single decks vehicles. Details of the timetable are known to link the new local bus operation to school contracts awarded to 2 Travel by Cardiff Council. Said Alan Kreppel, Managing Director "this operation to cream off revenue from Cardiff Bus was anticipated. As usual the competitor will only be operating during the working day and leaving Cardiff Bus to operate at times of low demand such as early mornings, late evenings and Sundays. The operation is entirely geared to provide cashflow to 2 Travel which is struggling to meet its business targets". 2 Travel lost nearly £1m last year according to their latest published accounts. You can rest assured however that the Cardiff Bus response will be robust" said Alan Kreppel. "

" As promised , this is to summarise my advice on the Competition Act implications of your response to the arrival of 2 Travel. (As it is legally privileged it will not be read by a competition authority, such as the OFT). Since you are likely to be dominant in your market the risk is one of a complaint based on alleged abuse of a dominant position (sometimes known as an infringement of Chapter II), which could trigger an OFT investigation, which, if it leads to a finding of infringement, could lead to directions to cease doing something, or even a fine (up to 10% of relevant turnover). If there is such a finding an affected party could also, independently, seek damages for loss suffered. (None of this is quick – investigations take months if not years to produce results. Any findings of infringement are also appealable). However, as I mentioned , I have not been able to find any recent examples of the OFT issuing findings of infringement in similar cases. One possibility is that, where there have been complaints, they have not been able to establish sufficient evidence in what is a difficult area of competition law; another is that they may not have resources; another is that the parties have sorted out their differences between them, and an investigation has been abandoned. There is, however, a 1993 case involving the dominant bus company Mid & West Kent (I'll send you the summary) suggesting that particular areas to watch out for are: 1. Running additional services where the long term profitability is doubtful; 2. Targetting the response to the new entrant in such a way as to appear retaliatory, or to exclude it from the market. On the other hand, generally improving the level of services you supply, in response to increased competition, is a rational response to a new entrant, and it would be difficult for the OFT to base an abuse case on that. I hope this is helpful. As and when matters progress do let me know if you need further help." (Emphasis supplied.)

"DMH [Mr Harrison] called Alan Kreppel, and explained the completion [ sic ] law implications of the proposed course of action, as summarised in DMH's mail of 8 March to Alan Kreppel. In discussion, AK mentioned that he thought there was one investigation of behaviour by a dominant bus company in Edinburgh currently underway (? First). He thought that in this case 2Travel were very unlikely to complain to the OFT, since their activities were by no means respectable. AK said they were going to prepare a competitive response to the arrival of 2Travel, and DMH might well need to be on call as matters are unfolded. AK said he would like to see the 1993 Kent case, and DMH said he would send him a copy of the case summary as it was very useful."

"...[t]he original press release (12th March) was issued internally...but apparently not copied in to you and does not appear to have been issued externally. I have revised it to todays [ sic ] date (13th April) as discussed to take out the reference to school holidays in para 4 which was wrong – PLEASE USE THIS VERSION! Please can you now put this into external format with appropriate headers and quotations. My view is that the quotations should be in my name, but I am checking with the Chairman and will get back to you if he wants it in his name instead. Next stage is for a revised version to be sent to me for approval."

"2 Travel the relatively new AIM listed company, which has already started to operate competitive services in Swansea and Llanelli, has now registered a network of thirteen vehicles on five of the company's key services, due to commence on Monday 19 th April 2004. This company is a low cost, low-grade operator and intends to use twenty to twenty-five year old double deck vehicles in competition with this Company's services on Ely, Pentrebane, Pentwyn, Llanrumney and St Mellons. Services will only operate Monday to Friday and will operate in between school contract commitments. During the peaks, the vehicles will be operating on Cardiff school contracts. Cardiff Bus will need to make an immediate and positive commercial response details of which will be diarised at the meeting. With this competition our financial position will have an effect on the Company's finances [ sic – but it is easy to see what Mr Kreppel meant] and may affect our ability to make a substantial contribution to "socially" necessary services. It may therefore be necessary in the middle of the Summer to review some of the little used services. ... The Board needs to be aware that if this competition is successful there is likely to be a second tranche of registrations, which has already happened in the South West Wales area."

" 791 Managing Director's Report (ii) Financial … (c) The budget proposals for the financial year commencing 1 st April 2004 were considered and reviewed in some detail. Councillor Sheppard raised a number of issues which were discussed in some depth. It was noted that the recent advent of competition had effectively invalidated the budget as it stood. Options for addressing the situation were discussed, with the meeting agreeing that the budget should be implemented on a "without competition" basis, and then updated early in the New Year when the competitive situation had become clearer. This was compatible with the process adopted in previous years of updating the budget once approved with one or two revised forecasts to ensure that the company's financial planning was up to date and sound. Councillor Sheppard expressed his concerns over approving a budget without receipt of a formal Business Plan. The Chairman made reference to arrangements in previous years which had been deemed to be satisfactory, and expressed some concern that the divide between the role of the Executive and non Executive Director was in danger of becoming blurred. Following discussion the Board did however agree that a Business Plan to support the budget was an advisable requirement, and it was therefore agreed that the budget be approved subject to receipt of an acceptable Business Plan. Given that it was inadvisable to start the new financial year without an agreed budget, a special Board Meeting was arranged for Friday 26 th March, 2004, and the Executive Directors were asked to prepare their Business Plan and circulate it in time for it to be reviewed at this meeting with a view to the existing budget being confirmed. (d) Predicted cash flow figures were reviewed, and Councillor Sheppard pointed out that the cash projections made no allowance for sale and lease back moving forward. The Financial Director [ie Mr Brown] pointed out that the cash flow forecast was a working document that would be updated in relation to the company's ongoing trading performance and future plans. Leasing facilities had traditionally been reviewed on an annual basis, and whilst the forecast did not include any lease facilities, this did not preclude the use of lease facilities as part of the company's ongoing cash management programme. It was agreed that this point would be considered further in relation to the company's Business Plan. … (iv) Competition The Board were advised of competitive registrations, and the company's reaction to this. It was expected that this competition would significantly damage the company's profitability, and the extent of this financial effect was reviewed. The company was preparing to make a commercial response, details of which were given to Board Members. The Chairman led a wide ranging debate on the potential impact of these competitive registrations, and the company's commercial response, with the Managing Director confirming that the company's response would be in accordance with the Traffic Commissioner's guidelines and legal requirements, and in accordance with competition legislation. … (viii) Driver Shortages and Reliability The current driver/staff establishment was complete, with reliability having been good in recent months. The position would need to be reviewed in the light of the company's competitive commercial response, and the effects of the holiday season."

"Accordingly, whether or not the Competition Policy document was formally adopted by Cardiff Bus' Board of Directors, that document was plainly prepared at the senior executive level within the company and, in the OFT's view, is demonstrative of exclusionary intent. Further, the fact that Cardiff Bus' conduct on the market closely resembled that proposed in the document strongly suggests that the policy was substantially implemented and that the intent behind that conduct was itself exclusionary."

"The meeting also considered their obligations under Competition Law, with the Managing Director confirming that he was satisfied that the company's current activities were legally compliant in this regard."

"We are currently facing a potentially very damaging period of trading for the company, with the introduction of significant competition from April 19 th . Our initial estimates are that this will cost us some £½M in lost profit in the current financial year, affecting our investment plans and forcing us to look at economy measures. In West Wales the company concerned, 2 Travel, has taken up to 40% of the market in some instances, and if anything like this were to be repeated in Cardiff it would certainly result in very significant job losses, and potentially put in jeopardy the current ownership arrangements. All our efforts are therefore currently targeted at minimising the impact of the competition, with the strategy designed to persuade the competition that there is no profitable future for them in Cardiff. We have the very fullest support of our TGWU and Unison partners in our strategy, who have indicated their willingness to be particularly flexible at this difficult time. Clearly I would hope to receive similar support from AMICUS, and look forward at our meeting to receiving similar reassurances."

"As I indicated to you with a new Managing Director taking over, there will be changes in the structure of the organisation in the short term. As also indicated to you, you are likely to start as a Market Research & Planning Assistant working with Peter Heath. This will be confirmed by David Brown the new MD, who would like to see you within the next four weeks or so, prior to your starting to confirm full details. As you are aware we face competition from 2 Travel from 19 th April 2004, and it is highly likely we will want you to over-see the Company's programme to ensure this competition is met on a fully effective basis."

"Please note that from Monday 19 th April, we will start operating journeys on certain bus services in the Cardiff area on a low cost "no frills" basis, to test the commercial viability of this type of operation as a means on [ sic ] growing the public transport market. These services will operate at cheaper fares with a lower standard of vehicle and at lower frequencies compared to our normal operations. These journeys will be operated as part of our existing registrations, but to permit the public to differentiate between a normal services and "no frills" journey we will be adding 100 to the service number of a "no frills" journey."

"Though I'd check to see if all is well. As I understand it, the 2 Travel services begin next week?"

"These fares will be altered once the market level of cheaper fares has been determined. Normal Cardiff zonal fare stages will be used. All competitive services will give change. Drivers must therefore carry a float, but will not be required to issue a change ticket. On competitive services, only single and return tickets will be issued, but the full range of Cardiff Bus fares and tickets will be accepted on competitive services. 2 Travel tickets will not be accepted. Lower price return tickets issued on competitive services are valid on normal Cardiff Bus services."

"The view here is that we cannot simply ignore the Echo – and it is better to keep in control of things. Inevitably Phil Nifield will be phoning me to ask for details of how many vehicles and the fares charged – I think I will have no choice other than to tell him, as he will be able to work out the details himself if we do not supply the information. PLEASE NOT [ sic ] THAT ALL COMPETITION PRESS RELEASES ARE FOR THE ECHO ONLY AND SHOULD NOT BE CIRCULATED ANY FURTHER. If other media pick up on the story then we will deal with that on a case by case basis."

"If we only operate the 157/158 service between Coed-y-Gores and Panasonic factory between approx 0900 and 1500, we can provide the 6 journeys per hour over this section of route for most of the day. This achieves a saving of 2 buses and means two duties Z009 and Z013 are on reserve all day. Suggest we decide tomorrow. Meanwhile, can you warn Greg/Allocations that there will be another set of alterations to duties from Monday – live work becoming reserve."

"Agreed as the best option, it will be boring for the 1 driver but saves 2 others and retains this registration should 2 travel start running. This will mean a duty board for this change."

"On Alan's return could you please pass him the following message? The OFT have on 29 April issued an interesting decision that First Edinburgh Ltd has not infringed the Competition Act in the Greater Edinburgh area, after a complaint by a rival bus company Lothian Buses. Lothian complained that First Edinburgh was abusing a dominant position by predatory pricing and increasing services, and also cross-subsidising routes. The OFT investigation seems to have found some conflicting evidence on pricing, but no intent to drive Lothian out of the market. The balance of evidence suggested that for First to reduce fairs [ sic ] or increase services was a reasonable commercial strategy, from which passengers benefited, rather than an unlawful attempt to push Lothian out of the market. It seems also that Lothian was in fact the larger operator in part of the area in question. For the present only a summary of the decision is available. I will however attempt to obtain a full version."

"Thanks for the info. Just to let you know that I have taken over as MD designate – Alan is leaving at the end of May. This is a live issue so all information is very welcome. Please could you also copy in Peter Heath on all information…"

"Just to report that the OFT are not yet sure when the full Edinburgh decision will be available. On past form, I would expect it to take them a few days to remove business secrets etc. We will keep in touch. The decision may well provide useful guidance on current thinking about predatory practices in the bus sector. (I sent Alan a rather old 1993 decision in March). In the meantime, my advice would be to continue to ensure that your response to 2Travel is presented in terms of improving services to customers rather than retaliating against a new arrival. (If there is uncertainty about the economics of pricing a service the competition authorities may take into account evidence of intent)."

"Many thanks. I look forward to seeing the details when they become available."

"5. Competition Competitive services commenced on the 19 th April, 2004, and the company made a positive commercial response. … Whilst the company response has been professionally executed, the 2 Travel Service has been ragged and unreliable. The full service proposed has not been run due to driver shortage, and the services that remain have kept neither to timetable nor to route. The vehicles involved breach a number of legal requirements. Early indications are that patronage has been poor, with no clear demand emerging for a "no frills" service at this early stage, although the market will of course develop. We are advised that 2 Travel may have complained both to the Traffic Commissioner and the Office of Fair Trading about Cardiff Bus' commercial response which has been alleged to be uncompetitive. Whilst these matters are of course always open to interpretation, our view remains that our response is reasonable, appropriate and legal. At the present time we have not heard from either the Traffic Commissioner or the OFT, but are prepared to deal with any feedback in a positive and robust manner. … 13. Drivers Shortage and Reliability The company has enjoyed an extended period of full staffing, which together with effective management has meant minimal loss of mileage arising from staff shortages. With the additional staff requirements resulting from competition, combined with the main summer holiday period, the situation will become more difficult in the months ahead. The company is currently actively recruiting to meet this requirement."

"(v) Competition The meeting discussed the additional services launched by 2 Travel, and the extremely poor quality of service that had been introduced. The company's commercial response was reviewed, and the company had received no external feedback."

"As you may be aware we have been dealing with David Harrison in relation to competition advice, but the early issues being raised appear to relate more to traffic law, and area where you of course are the expert. I enclose copies of correspondence between Solicitors acting for 2 Travel and ourselves, which are largely self-explanatory. Although this exchange has now taken place, I should be grateful for any additional comments you may have. I also enclose correspondence with Cardiff County Council, again which is self-explanatory. At this stage we feel it to be inadvisable to contact the Traffic Commissioner ourselves direct, and are hopeful that Cardiff County Council will now wish to contact the Traffic Commissioner in its own right as representing the broader interests of Cardiff. Clearly this is a developing matter, and one where we may wish to seek your advice at short notice."

"…our policy seems to be to run to scheduled time. You need to look at this as they are all over the shop and occasionally are getting a reasonable load. We need to consider running with them, given the fact that most of our mileage is registered 'frequent' – please discuss with David [Brown] and Peter [Heath]."

"Is this one for the competition group? Should we have a meeting this week given that [Chris Dexter] and myself are away next week?"

"The T.G.W.U. is becoming increasingly concerned with the operation of the [competitive vehicle roster]. We are concerned that the drivers on this roster are being used as nothing more than scapegoats for the inability of the company to operate in competition with 2 Travel. The supervisor for this roster and the manager who is in charge of this roster are continually altering the rules so much so that the drivers are no longer sure of where they are and which rules they are under. One minute they are working to the pad the next minute they are being told to fight the competition, Yesterday Alun Kreppel told me that he had instructed the supervisor to tell the drivers not to run to the pad and to start competing against 2 travel. We really need to let the drivers either compete against them or if we are not going to do this I suggest we remove our buses and save ourselves the revenue we are wasting…"

"[G]entlemen, I have just spent some time this morning observing operations in Ely. Our competitive services are nothing short of a joke. We are successfully competing with ourselves and allowing 2 Travel a completely free rein. Our only saving grace is that many passengers will not travel with them. If this is typical and carries on then 2 Travel will gain a firm foothold just as they have in Swansea but we will have thrown around £500,000 p.a. down the drain. [T]he TGWU is partially correct except I have not instructed anyone to do the sensible thing (for reason [ sic ] which are obvious). That is to ensure our white vehicles shadow 2 Travels' rather than run to our notional timetables on services that are for the most part registered 'regular'. The current nonsense needs to stop now and we need to start competing with the competition rather than ourselves – I suggest we get on with it urgently before it is too late."

"Thanks for your note. I fully understand your frustrations but feel that perhaps you are not seeing the full picture. The competiton [ sic ] battle is being fought on many fronts, and not just the white bus competetive [ sic ] response. 2 Travels activities in a range of areas leave them wide open to challenge – for example by the Traffic Commissioner, VOSA, and potentially by a number of other statutory bodies. We believe that they are setting themselves up to be architects of their own fall, and part of our behind the scenes work is to ensure that the relevant authorities become aware of 2 Travel activities. For example, whilst we would in any event not have been able to cover the Park and Ride, we were ready and waiting with our 'spotters' to observe 2 Travels activities. As expected a bus arrived without an O licence, and we were able not only to draw this to the attention of the Council official who was there, but also explain that the vehicle was illegal and could not be moved! The impact of that one incident was critical to our wider campaign, and is we now understand being followed up on. However for our campaign to be successful we have to be 110% safe, and legal, and we do not wish to get involved in any activities that would compromise that position. Having said that there is perhaps scope to alter timings on some routes and we will explore that option further. For the sake of clarification Peter Heath is coordinating our competitive strategy, and chairs a group comprising of myself, DBW, CD and KSS that meets weekly to discuss developments and agree any strategic changes. I have asked Peter to meet with you to explain things in a little more detail, and to discuss whether there is any scope for fine tuning. Together with CD they can also discuss the issues of inconsistency to which you refer."

"David The OFT (finally) released the full 35 page version of their First Edinburgh/Lothian competition law bus decision earlier today. Looking through the decision the facts of the Edinburgh case are a little different, in that both First Edinburgh and Lothian (who complained to the OFT) were sizeable firms, and each probably dominant in different geographic areas. There was in fact no prospect of First Edinburgh driving Lothian out of the Greater Edinburgh area, where the alleged predatory behaviour (price cutting and increasing services) took place. The decision is nonetheless useful, because it shows the current reasoning that lies behind applying competition law to a 'bus war', involving fares reduction and increasing the number and frequency of services in response to a competitor (in this case over a period of over two years). What the OFT did, briefly, was to consider all the allegations of fare reduction (by route, and by day or weekly tickets), increased frequency of routes and/or introducing new routes, and cross-subsidising of loss-making services from profitable parts of the business, as aspects of potential predatory behaviour by First Edinburgh. The OFT said that predation infringes the Competition Act 1998 Chapter II prohibition (on abuse of a dominant position), and that it comprises 'strategic behaviour whereby a dominant undertaking deliberately incurs losses in order to eliminate a competitor, or deter market entry by potential competitors, so as to be able to charge excessive prices in the future.' … I should add that this decision slightly tweaks the case law, which says, normally, that any prices below average variable costs will be predatory, and that only where prices are above average variable costs, but below average total costs, should evidence of the intention of the dominant firm be taken into account). (Variable costs are those which vary directly with the amount of output produced). If you would like to discuss, or me to give further detail about this decision and its implications, please let me know."

"The phrase "directing mind and will" comes of course from the celebrated speech of Viscount Haldane L.C. in Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. [1915] A.C. 705, 713. But their Lordships think that there has been some misunderstanding of the true principle upon which that case was decided. It may be helpful to start by stating the nature of the problem in a case like this and then come back to Lennard's case later. Any proposition about a company necessarily involves a reference to a set of rules. A company exists because there is a rule (usually in a statute) which says that a persona ficta shall be deemed to exist and to have certain of the powers, rights and duties of a natural person. But there would be little sense in deeming such a persona ficta to exist unless there were also rules to tell one what acts were to count as acts of the company. It is therefore a necessary part of corporate personality that there should be rules by which acts are attributed to the company. These may be called "the rules of attribution."

" see Multinational Gas and Petrochemical Co. v. Multinational Gas and Petrochemical Services Ltd. [1983] Ch. 258. These primary rules of attribution are obviously not enough to enable a company to go out into the world and do business. Not every act on behalf of the company could be expected to be the subject of a resolution of the board or a unanimous decision of the shareholders. The company therefore builds upon the primary rules of attribution by using general rules of attribution which are equally available to natural persons, namely, the principles of agency. It will appoint servants and agents whose acts, by a combination of the general principles of agency and the company's primary rules of attribution, count as the acts of the company. And having done so, it will also make itself subject to the general rules by which liability for the acts of others can be attributed to natural persons, such as estoppel or ostensible authority in contract and vicarious liability in tort. It is worth pausing at this stage to make what may seem an obvious point. Any statement about what a company has or has not done, or can or cannot do, is necessarily a reference to the rules of attribution (primary and general) as they apply to that company. Judges sometimes say that a company "as such" cannot do anything; it must act by servants or agents. This may seem an unexceptionable, even banal remark. And of course the meaning is usually perfectly clear. But a reference to a company "as such" might suggest that there is something out there called the company of which one can meaningfully say that it can or cannot do something. There is in fact no such thing as the company as such, no ding an sich , only the applicable rules. To say that a company cannot do something means only that there is no one whose doing of that act would, under the applicable rules of attribution, count as an act of the company. The company's primary rules of attribution together with the general principles of agency, vicarious liability and so forth are usually sufficient to enable one to determine its rights and obligations. In exceptional cases, however, they will not provide an answer. This will be the case when a rule of law, either expressly or by implication, excludes attribution on the basis of the general principles of agency or vicarious liability. For example, a rule may be stated in language primarily applicable to a natural person and require some act or state of mind on the part of that person "himself," as opposed to his servants or agents. This is generally true of rules of the criminal law, which ordinarily impose liability only for the actus reus and mens rea of the defendant himself. How is such a rule to be applied to a company? One possibility is that the court may come to the conclusion that the rule was not intended to apply to companies at all; for example, a law which created an offence for which the only penalty was community service. Another possibility is that the court might interpret the law as meaning that it could apply to a company only on the basis of its primary rules of attribution, i.e. if the act giving rise to liability was specifically authorised by a resolution of the board or an unanimous agreement of the shareholders. But there will be many cases in which neither of these solutions is satisfactory; in which the court considers that the law was intended to apply to companies and that, although it excludes ordinary vicarious liability, insistence on the primary rules of attribution would in practice defeat that intention. In such a case, the court must fashion a special rule of attribution for the particular substantive rule. This is always a matter of interpretation: given that it was intended to apply to a company, how was it intended to apply? Whose act (or knowledge, or state of mind) was for this purpose intended to count as the act etc. of the company? One finds the answer to this question by applying the usual canons of interpretation, taking into account the language of the rule (if it is a statute) and its content and policy. The fact that the rule of attribution is a matter of interpretation or construction of the relevant substantive rule is shown by the contrast between two decisions of the House of Lords, Tesco Supermarkets Ltd. v. Nattrass [1972] AC 153 and In re Supply of Ready Mixed Concrete (No. 2) [1995] 1 A.C. 456..."

"49. Although I took on the role of Managing Director designate from 1 April 2004, I had no involvement in considering the potential impact of the Infill Services on the company and the subsequent decision to operate the White Services. This was a matter dealt with exclusively by my predecessor, Alan Kreppel. In his role as Managing Director, Mr Kreppel had exclusive responsibility for operational matters and the planning of Cardiff Bus' competitive response therefore fell to him. As I mentioned above, the management structure at that time was departmental in nature and so it was not unusual for the particular details on matters that Mr Kreppel was dealing with not to be shared with me."

"Q (Mr Bowsher) You were involved in the initiation of this commercial response, were you not? A (Mr Brown) No, I took over when I took over as managing director designate at the beginning of April. So this planning, I wasn't aware of this planning in March, when it was going on, other than in terms of what I knew as a board member. It was the previous managing director's project."

"We note that 2 Travel believes that there is a market for what can perhaps best be described as a "no frills" operation – limited frequency, older vehicles, basic standards and lower fares. Experience in the past has indicated that such services are generally unsustainable in the longer term, even when cherry picking key routes and times of day. We do not believe that these are the future of public transport in a modern European Capital City. On a commercial basis however we are bound to retest the market, to see whether a demand has emerged for this type of service. On an experimental basis we are therefore introducing a limited number of unbranded vehicles, on a "no frills" basis, to test demand, and will keep the situation under close review."

"Q (The Chairman) What were you trying to achieve at this time in relation to 2 Travel? A (Mr Brown) Well, my understanding – and I appreciate the OFT finding is different from this – was based around the principle of differentiated competition, and I think in my original press release, I set out that as being what we were doing. Effectively, I think we talked about if Cardiff Bus were Sainsburys or Marks & Spencers and they had set up a Lidl, this was an Aldi. We talked about British Airways, who set up a low cost subsidiary, Go, and Stagecoach in Manchester, with Magic Bus. So that the idea of a differentiated market, I think I said that – I may even have said that we'd experimented with it in the past - Q (The Chairman) If you look at the very negative press release about 2 Travel, you were not saying in that press release: this is a legitimate differentiated market in which we believe our product is better. You were saying: this is a rubbish company which runs awful buses and is going to the wall. A (Mr Brown) Certainly we said that. I thought in that press release, I thought we'd said the other part as well. Certainly, in one of the press releases it does talk about the concept of Sainsburys, Aldi and Lidl. Q (The Chairman) But what did your board want to happen to 2 Travel? A (Mr Brown) We were clearly trying to protect our market. Q (The Chairman) What did your board want to happen to 2 Travel, or had that not been a question that was asked at board? A (Mr Brown) As I said, I don't recollect the full discussion, but I think it's clear that certainly we were looking to protect the market in terms of them getting a foothold, and I think it is reasonable to say that we would not have been upset if they had left Cardiff. Q (The Chairman) So you wanted to put them out of business? Is that too direct a way of putting it? A (Mr Brown) No. Well, we're talking about Cardiff? Q (The Chairman) Yes, of course we're talking about Cardiff. A (Mr Brown) It was a competitive situation. We were seeking to stop them getting a foothold in Cardiff. Q (The Chairman) You're being asked a lot of very legitimate questions by Mr Bowsher, but if the answer is "

"Q (Mr Bowsher) But at the time, is there any indication, other than that press release [i.e. the press release quoted at paragraph 578 above], that you were testing the market? A (Mr Brown) It was my understanding of what we were doing. I subsequently now understand, being able to see the full picture, that the OFT took a different view and why they took that different view."

"In my opinion travel are making a last ditch attempt to earn some cash, on tuesday they operated 7 buses at one stage into the west of the city. At this time it is imperative we do not give them any opportunities to gain a foothold. We will not regulate any bus during the day on its inbound journey on any competition route, if there are any problems of any kind on competative [ sic ] routes inform greg john who may be able to assist with his staff. Your cooperation will assist in their demise."

"Q (Mr Bowsher) So he's completely wrong, is he, Mr Cole, when he says "

"We were reassured by the managing director that this was in compliance with all relevant laws, including competition law. I can't remember the detail of the discussion but I was satisfied that what we were doing was legal and correct. I have no reason to doubt that. The board had discussed it and it's there in the minutes."

“I can confirm that Cardiff Bus did not seek or obtain any legal advice in respect of the launch and running of the White Services”