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Education Department cagey on Bus Eireann

Un availability of accounts and a report, and denial of profit, mask uncompetitiveness

Student Transport Scheme Ltd (STS), a private company, wants Ireland’s school-bus-service contract put out to public tender and hopes that it will be awarded it on competitive tender. The company, with Tim Doyle and Brian Lynch as shareholders is intended as a tender vehicle for an Irish-American team in the bus industry. It initiated still-ongoing legal action against the Department of Education in October 2011. Bus Éireann was joined as a Notice Party in the proceedings at the direction of the High Court.

Given the fact that the company, despite having obviously wealthy backers, had effectively no assets, the High Court gave the Department an order for security of costs. The effect of this was to provide the tax payer with security in the event, as actually occurred, that the Department won the court case and received an order in its favour in respect of its costs.

The essential thrust of the legal action was to seek an Order from the High Court setting aside the existing arrangements for the provision of national school transport services. The case was heard over a six-day period in the Commercial High Court in 2012. During this period counsel, on behalf of the company, the Department and Bus Éireann) advanced their evidence and legal arguments to the Court.

The Department received extensive correspondence accusing it of illegality, obstruction of a solicitor, tampering with evidence and perverting the course of justice. At trial, Senior Counsel for the company apologised for the excessive zeal of this correspondence.

After the court judgment in favour of the Department the company, through its solicitor, Brian Lynch & Associates, initiated an appeal to the Supreme Court. In addition, the company, again through that solicitor, instigated an action against two named officials of the Department, the Chief State Solicitor and a named official of the Chief State Solicitor’s Office. This action alleged contempt and sought committal of the public servants in question. The Supreme Court struck out the contempt/committal issue, saying it was for the High Court.

The Department and Bus Éireann also sought security for the legal costs of the appeal to the Supreme Court. Student Transport Scheme Limited duly lodged the €201,000 in security for costs for the Supreme Court appeal bringing the total to €446,000 paid to date.

The Department believes litigation in this case continues to be conducted in a most unusual, threatening and aggressive manner. Brian Lynch & Associates on behalf of the company and Tim Doyle, as managing director of the company, between them have written many hundreds of letters to Ministers, Deputies, the Department, Bus Éireann, the Office of the Chief State Solicitor and to individual officials and retired officials of the Department. Elements of this correspondence allege corruption, refer to an ongoing investigation of corruption by Brian Lynch & Associates, and repeatedly raise issues and contentions which were the subject of the court proceedings.

It should also be pointed out that earlier correspondence to Bus Éireann contained references to bias, bribery and bullying and these allegations are now the subject of separate defamation proceedings initiated by Bus Éireann against Tim Doyle.

The arrangements between the Department and Bus Éireann are set out in a document of 1975 which provides the basis for payment to Bus Éireann.

The Department receives a copy of the Statement of Account for School Transport, prepared by the CIE Group auditors, each year which confirms that, in the opinion of the auditors, the Statement of Account has been prepared, in all material respects, in accordance with the Summary of Accounting Arrangements relating to the Transport Scheme for Primary and Post-Primary School children dated 1 January 1975 and with the bases and assumptions disclosed therein. This Statement of Account is not required to contain any statement to the effect that Bus Éireann do not make a profit from school transport.
Nevertheless Bus Éireann has confirmed to the Department that they do not make a profit on School Transport and the Department accepts this confirmation.

Subject to provision of the appropriate security for costs, junior Minister Ciaran Cannon has said the Department will deal fully with this “in the context of the Supreme Court appeal”.

Meanwhile, however, the Department is failing to answer Parliamentary Questions – the facility whereby back bench and opposition TDs can ask questions of Ministers to hold them to account and to ascertain the truth. In effect the legal action is precluding the provision of the facts to the Dáil. Whether the facts will emerge in the legal proceedings is also uncertain. They have not during the litigation so far.

Michael Smith