WATERMAN HITS OUT OVER PEAK RAIL LEGAL ACTION
New Peak Rail plc president says days of ‘gentleman’s agreements’ are over, but confirms the railway still plans to extend northwards.
IN OUR VIEW, THE WASTING OF TIME, ENERGY AND MONEY TO FIGHT UNWINNABLE BATTLES MAY LEAD TO COMPANY INSOLVENCY PEAK RAIL ACTION GROUP
Newly appointed Peak Rail president Pete Waterman has criticised both the recently formed Peak Rail Action Group (PRAG) and one of the railway’s former directors who brought legal action against the line. A letter to Peak Rail plc shareholders and association members, signed by Mr Waterman, says that it seeks to provide accurate information regarding a recent legal dispute in which the company agreed to pay out £130,000 (excluding VAT) to Grinsty Holdings Ltd over alleged outstanding hire fees for its locomotive, ‘Austerity’ 0‑6‑0ST Works No. 3883 ‘Lord Phil’ (see SR477). The locomotive had been contracted for 75 steamings per annum, but Grinsty Holdings director and former Peak Rail Engineering Director Mike Thompson claims that PR conducted in excess of 260 additional unauthorised steamings over a five‑year period without consulting the owner. Mr Waterman’s letter says: “Peak Rail did not dispute the fact that the locomotive had been used on more occasions, but the number being invoiced by Grinsty Rail Ltd… was far greater than had actually been the case.” It added that the directors of PR had believed that the costs of extra steaming fees were to be offset against the use of facilities on the part of Grinsty Rail Limited. In response to Mr Waterman’s letter, Mr Thompson said: “Grinsty rejects Mr Waterman’s assertions and has written to him to ask him to check his facts and issue an apology.” Mr Waterman confirmed that the case had now been settled “to the value of £130,000 plus costs, which have still to be agreed. The £130,000 has been covered by an anonymous donation of £100,000, and an interest‑free director’s loan of £30,000 from people who are both supportive of Peak Rail and who find Mr Thompson’s actions distasteful.” It is not clear which directors are said to find Mr Thompson’s actions ‘distasteful’. Meanwhile, PRAG says that PR is due to pay out further legal costs to Grinsty Rail, which in March 2017 applied for an injunction against Peak Rail in order to secure unobstructed access to the Rowsley engine shed, which Grinsty said was its right under the terms of a licence. In a statement, Grinsty Rail says: “Peak Rail admitted breaching the terms of the licence and gave an undertaking to the court promising to allow free and unobstructed access. Despite this, Peak Rail went on to defend the claim. “The matter has now been settled by consent, with PR agreeing to pay Grinsty’s costs of the action. Together with the costs still outstanding from a previous court action, the total legal costs payable by PR amount to a considerable five‑figure sum.” In a letter sent out to Peak Rail members and shareholders, PRAG – which seeks to call an extraordinary general meeting in order to oust the present PR board – suggests there have been at least two other court cases in recent years in which PR has paid out. It is not clear who the other parties to those disputes were, but according to PRAG the railway paid out £1,200 in compensation plus approximately £5,000 in costs in an “age discrimination” case in 2014. Two years later, PRAG says that PR paid out £4,500 plus a further £5,000 in its own costs in a breach‑ of‑contract case with locomotive owner Andrew Briddon. PRAG says: “PRAG was set up following the latest in a string of senseless legal actions pursued by Peak Rail plc. “In our view, the wasting of time, energy and money to fight unwinnable battles may lead to company insolvency. An EGM is needed to remove the existing Peak Rail plc board; directors have failed to show proper leadership or exercise good governance, allowing the joint managing directors to act unchecked and likely to bring the company to its knees.” In a letter to PR members and shareholders, Mr Waterman has suggested that Peter Briddon (Andrew Briddon’s father) and PRAG are attempting to get the railway “closed down”. Mr Waterman says: “Mr Briddon, in his actions against the railway, has on numerous occasions made some spurious complaints to the Office of the Rail Regulator Safety Inspectorate concerning operating issues on the railway in an attempt to get us closed down and further discredit the railway.”
The letter also suggests that Mr Briddon’s actions (including participating in the campaign to replace the existing directors of Peak Rail) “are seemingly meant to disrupt the company, potentially jeopardise its future plans and further drain its financial resources at every possible opportunity.” Mr Briddon refutes these claims, saying that he has never made any complaints to the regulatory body. He also denies the assertion that he wishes to damage Peak Rail’s business: “The success of my business [is] partially dependant on the viability of Peak Rail plc as a going concern…clearly there is no benefit to be gained by my undermining in any way the sustainability of the Peak Rail business; quite the opposite” and challenges how concerns about safety standards can be said to be “spurious”, given that Peak Rail received an Improvement Notice during 2017 in respect of displacement of the rails and surfacing at Darley Dale level crossing. Mr Briddon also claims: “The income of the railway has flatlined, and it records a profit only after indulging in an accounting practice of transferring funds from the P&L account into the balance sheet. I am therefore seriously concerned that the company will end up insolvent, as it does not appear to be generating the revenues required to be a viable business in the long term.” Owing to the legal disputes, PR has decided to review its contract policy, saying that “the days of verbal agreements are behind us”. “A new management policy has been put in place to deal with all future contract issues, including detailed vetting by our legal advisors. The question of individual licences on the railway is also under review.” Furthermore, the railway has negotiated a one-year contract for the hire of 1945-built Vulcan Foundry ‘Austerity’ 0-6-0ST Works No. 5309 (WD No. 75319, NCB No. 72) from JMB Locomotive Services to undertake all passenger operations, while the overhaul of ‘Austerity’ Works No. 7136 ‘Royal Pioneer’ continues at Rowsley. It is hoped both this and Mr Waterman’s GWR ‘Small Prairie’ No. 5553 could be operational on the railway in 2018. The railway also claims that “negotiations are ongoing with partners and a range of organisations with regards to extending the railway northwards.” Mr Waterman says that he believes that despite the issues, Peak Rail has an exciting and thriving future ahead of it. The dispute comes as Peak Rail announced that it was seeking to launch a feasibility study, exploring the possibility of reinstating the Matlock-Buxton line as far as Peak Forest (see SR478). Steam Railway would like to make it clear that it does not adopt nor endorse the views or statements attributed to any of those involved in this ongoing dispute. ‘Austerity’ Works No. 3883 ‘Lord Phil’, the locomotive at the centre of the recent dispute, has returned to steam after overhaul at Tyseley. The 0-6-0ST is currently on an initial long-term loan to the Epping Ongar Railway for 12 months, but with the potential for a two-year extension in which the saddle tank would remain at the EOR until the end of its current boiler ‘ticket’.