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West Somerset Railway General Discussion

Discussion in 'Heritage Railways & Centres in the UK' started by gwr4090, Nov 15, 2007.

  1. jma1009

    jma1009 Well-Known Member

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    I would expect a reasonably competent board, such as one might expect the WSR plc board to be, to come up with a costed plan for 53808 to honour it's contractual commitments.

    And accept that it had no legal basis whatsoever to serve a Notice to Quit over Washford. And apologise.

    What we do know, and is freely available, is the Court proceedings regarding Crossville, that is not very edifying.

    I think that most of us would agree that the writing down in the 2 previous published accounts of the WSR plc were singularly influenced by getting rid of 44422, and partially avoiding in the accounts accurate and known costs for the provision for 53808's impending overhaul.

    Both had a significant effect on the accounts to enable someone to claim that he had got a £300,000 profit, and at the same time making the most disgusting remarks to Paul Whitehouse at a £187,000 cheque (or stamped sleeper) handover within days of the Notice to Quit being served on the SDRT February last year.

    Then we have a purge of volunteers without any recourse to usual policies or natural justice that is still ongoing.

    How and when is the WSR plc board going to honour it's significant contractual commitment to the overhaul of 53808?
     
    Last edited: Jun 19, 2021
  2. bluetrain

    bluetrain Member

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    I seem to recall suggestions that the £800K loss to £300K profit transformation was achieved partly by reducing the provision in the accounts for overhaul of No. 53808?

    I suspect that many WSR volunteers and supporters will have welcomed the autocratic new regime at the WSR plc in the hope that it could put an end to the feuding that had afflicted the railway for some years past. Instead of which it has started more feuds, particularly through its malevolence towards the S&DRT.

    But even if they abhor some of the actions of WSR leaders, it is entirely rational for WSR supporters to see the overriding priority as the survival of this fine railway, so I can well understand that many do not wish to "rock the boat". Even if were possible to depose the current leaders, would there be alternative leaders who are competent, able and willing to take over?
     
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  3. Monkey Magic

    Monkey Magic Part of the furniture

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    I am confused. On the one hand you want me to get involved and condemn me for not getting involved and on the other you tell me that I don't like it when someone disagrees with me, I ignore evidence etc etc. I'd have thought that if I am all the things you claim then I am the last person you would want being involved in the WSR. Afterall, there are already enough people involved in the WSR who hate people with different opinions, ignore evidence and who fail to consider other views and reconsider their views etc etc.

    If people involved with WSR choose to ignore NP because there are views that they don't like then that is their lookout.

    As for bullying, it isn't unusual for those who are not subject to bullying or toxic behaviour to think that it doesn't exist, but that doesn't mean that it isn't happening. It is one of the ways in which toxic cultures sustain themselves, through the repeated minimisation that the culture is toxic 'I don't see any bullying so there is no bullying', gaslighting the victims of the culture. The WSR is no different to any other toxic environment in that respect.

    You still haven't said what you've done to help to lead the WSR out of its present difficulties.

    The problem is that there may not be a boat to not rock if things continue the way they are going.

    There surely has to be a tipping point?
     
    Last edited: Jun 19, 2021
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  4. jma1009

    jma1009 Well-Known Member

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    If the WSR plc board defaults over it's contractual commitments re 53808's impending overhaul, then the SDRT is going to have to make an appeal to it's members for an average donation of some £320 each above and beyond everything else.

    And I would myself suggest it is morally repugnant for the WSR plc board to even attempt to divest itself of this £250,000 plus contractual liability.
     
  5. Paulthehitch

    Paulthehitch Member

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    :rolleyes:
     
  6. Bayard

    Bayard Part of the furniture

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    There was that, too.
    The Fable of The Frogs Who Desired a King springs to mind.
     
  7. Jamessquared

    Jamessquared Nat Pres stalwart

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    As I understand it, they have until 2030 to do so. Which is still nine years away, and a lot can change in nine years.

    Which actually puts the S&DRT at a decision point. When the loco comes out of traffic soon, they have two choices. One is just to sit tight in the hope that the WSR plc meet their commitment. The other is to forge some new path with a new partner railway - but if they do so, it would arguably be them that tore up the deal with the WSR. So they would then be left with the need to explain how moving in that direction was in the best interests of the charity. (As a charity they would probably argue that the public benefit of seeing the loco in operation sooner justified the additional expense to the charity of doing so). I think were they to try to get the loco restored somewhere else and then attempt to charge the costs back to the WSR plc, the plc could turn round and refuse on the grounds that they had based their intended overhaul on doing it in their own workshops, which would clearly be cheaper.

    The bottom line is that the agreement with the WSR plc isn't broken unless a shiny restored locomotive fails to turn up by 2030. If the S&DRT want to see the loco running before that, then it will be them varying the terms.

    I do tend to the view that the current plc board have been making a complete horlicks of things, particularly with regard stakeholder relations. But it is also the case that the plc board has been marked by considerable instability over the last number of years, with people coming and going in very quick succession. So nine years (or probably more realistically six years to actually make a tangible start on the overhaul) is rather a long time away and much might happen between now and then.

    Tom
     
  8. Big Al

    Big Al Nat Pres stalwart Staff Member Moderator

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    You are playing again a stuck record. Why not ask the chair of the S&DRT?
     
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  9. Monkey Magic

    Monkey Magic Part of the furniture

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    So you keep saying.

    Cassandra did have this problem of her warnings not being heeded.
     
  10. John Palmer

    John Palmer Member

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    I would like to understand clearly what you say is the effect of the agreement, as the two extracts above suggest significantly different interpretations of it. To me, the first extract suggests that the obligation to overhaul must be performed “when the loco comes out of traffic” i.e. as soon that event occurs. The second extract, on the other hand, suggests that the agreement permits the WSR plc to defer the overhaul for any length of time until the end of the contractual term in 2030, regardless of whether the locomotive has stood out of traffic for a substantial part of that period. I do not know which, if either, of these interpretations is correct, as I have not read the agreement in question. Have you?
     
  11. 35B

    35B Nat Pres stalwart

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    Based on what those with knowledge have said previously, I find it unlikely that the agreement requires the plc to do that overhaul upon withdrawal, and tend to the view that it is the 2030 date that matters from the point of view of the contract.

    For that reason I concur with the analysis by @Jamessquared, especially regarding the bind it places the S&DRT trustees in.


    Sent from my iPhone using Tapatalk
     
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  12. Matt78

    Matt78 Well-Known Member

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    agree with most of this but we are also concerned with “anticipatory breach” which is one party saying “I can’t meet what I have promised in the future”. The Trust are dealing with this by hiring out the loco and earning hire fees which would be used for the overhaul. Will it cover the whole cost- probably not. Will it help- probably.

    Regards

    Matt
     
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  13. Big Al

    Big Al Nat Pres stalwart Staff Member Moderator

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    In a normal world with normal relationships what could possibly happen might be this:
    1. The WSR announces, (as it has already?) that its ability to overhaul the 7F, as per the contract, may be compromised due to financial constraints.
    2. The S&DRT makes alternative arrangements to raise money including hiring the loco to the MHR. (Happening now.)
    3. At the time of the overhaul, The S&DRT checks precisely what the situation is on the WSR.
    4. If the WSR is still unable to honour its contract then the S&DRT allows for an amicable release by the WSR of their commitment.
    5. The WSR makes a mutually agreed payment to the S&DRT of a compensation sum for breaking the contract.
    6. This sum forms part of the cost for the overhaul by a third party, say the MHR.

    Personally I think that any suggestion that the overhaul of the 7F should be determined by an organisation that doesn't own the locomotive or provide accommodation on its line because of action taken by the same organisation is just plain daft.
     
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  14. Monkey Magic

    Monkey Magic Part of the furniture

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    Step 5 is optimistic. The S&DRT has absolutely no leverage over the WSR to get any money out of them for breaking the contract. The WSR can just turn their pockets out and say 'look no cash'.
     
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  15. Lineisclear

    Lineisclear Member

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    That's a pretty fair summary of the anticipatory breach response where the S&RDT has a duty to mitigate its loss by finding substitute income streams.

    The underlying problem is not unique to 53808 or 44442 for that matter. The culprit is the naive idea that a suitable contract is one where the hirer has free use
    (apart from the cost of routine maintenance, consumables etc. ) against acceptance of a contractual obligation to overhaul the Loco in future. It's deceptively attractive at the outset. The Owner gets somewhere to keep its Loco and see it running. The hirer can earn revenue without having to pay hire or steaming fees. As often as not the contract is drawn up on a penny wise pound foolish basis without involving lawyers to the extent that some are so defective they are completely unenforceable.

    I'm not an accountant but my understanding is that the owner can charge depreciation of the Loco against profits to reduce its tax liability but not the cost of creating a sinking fund to cover accumulating overhaul liability. That would be financial double counting. It makes a provision in its accounts that recognises the liability but that's not the providing of cash that the term implies to non accountants; it's simply a means of calculating the underlying financial performance of the business. The hirer could create cash reserves but we all know what tends to happen. There will always be another pressing need to replace track, rebuild a bridge or the million and one other things that demand cash being found NOW! Despite good intentions other priorities intervene during the hire term.

    So the use now pay later hire contract is an an accident waiting to happen. As has happened elsewhere the owner assumes the hirer will honour its obligations only to discover towards the end of the contract that the money to do so isn't there. The Owner hoped that by the time the liability matured finances would have improved. Both end up disappointed.

    A further complication is that Courts will not order specific performance of a contract if breach is capable of being compensated in money terms. so the owner cannot be compelled to carry out the overhaul. Then the fun starts. How do you calculate the damages that may be recoverable? It's immoral as others have pointed out, and can have reputational consequences, but for the hirer the damages payable are almost certain to be less than the cost of the overhaul. As a financial decision reneging on the contract may be the cheapest option.

    The lesson is that "use now pay later" contracts should be avoided. It's also that making sure your Loco Hire contracts are legally watertight and that they make business sense for both parties.
     
  16. 35B

    35B Nat Pres stalwart

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    The only addition to that is that I believe (but can't be bothered to trawl through the thread) that the plc and Trust agreed an approach to funding the overhaul as part of the outcome of the negotiations in which @Lineisclear helped lead.
     
  17. 35B

    35B Nat Pres stalwart

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    Out of interest, how much use is made of escrow arrangements for these fees to protect the interests of the owners?
     
  18. Bayard

    Bayard Part of the furniture

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    I notice that now, when you hire a car, you pay the hire fees up front, with adjustments at the end of the hire, whereas ISTR that in the past you paid on completion of the hire.
     
  19. Jamessquared

    Jamessquared Nat Pres stalwart

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    I'm basing my thoughts on what has been written in the S&DRT accounts; specifically that there is an agreement that lasts until 2030 and that the WSR are responsible for the overhaul costs. I interpret that as the requirement is that the loco is operational upon expiry of the agreement - realistically that probably means starting work no later than about 2027-ish. I don't interpret it as a requirement to commence work on an overhaul immediately it comes out of traffic; and that would in any case be a very difficult agreement for the hirer to sign up to, since you don't know the throughput of other locos through your workshop (and therefore available space) that far in advance. When I wrote "When the loco comes out of traffic soon, they have two choices" I meant that is the point at which the choices crystallise; I didn't intend it to mean there was some obligation to start the overhaul immediately.

    Tom
     
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  20. Lineisclear

    Lineisclear Member

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    I'm not aware of any but it's an interesting idea. ( For the unitiated it's an account controlled by a third party into which payments are made but where payments out can only be made once specified conditions agreed between the parties to a contract have been satisfied).

    Would escrow accounts provide any advantage? In a pay as you use Loco hire contract situation the owner would probably prefer periodic hire fees paid direct. If it's a "use now overhaul later" contract the hirer's capacity to pay into an escrow account is no greater than paying for the cost of the overhaul unless it pays in the forecast cost of the overhaul as security at the start of the hire period. Hmmmmm! Nice if you could get it , but how many hirers would be in position to hire on that basis?
     
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