Neutral Citation Number: [2011] UKUT 139 (AAC)
                                               					            Appeal No: T/2010/88

IN THE UPPER TRIBUNAL		
ADMINISTRATIVE APPEALS CHAMBER
(TRAFFIC COMMISSIONER APPEALS)

ON APPEAL FROM THE DECISION OF SIMON EVANS, 
DEPUTY TRAFFIC COMMISSIONER for the NORTH WESTERN TRAFFIC AREA, 
DATED 7 DECEMBER 2010

Before:
	
Judge Mark Hinchliffe, Deputy Chamber President (HESC); Judge of the Upper Tribunal.
Patricia Steel, Member of the Upper Tribunal.
Leslie Milliken, Member of the Upper Tribunal.

Appellant:
SMITHS LOGISTICS LTD

Attendance:

For the Appellant: 	Mr D Smith (Director). Ms L Coxon also attended

Appeal heard at: 	Victory House, 30-34 Kingsway, London
Date of hearing: 	18 March 2011
Date of decision: 	31 March 2011

DECISION OF THE UPPER TRIBUNAL:

IT IS HEREBY ORDERED that the appeal will be dismissed. The order of the tribunal and the termination of the interim licence authorising 4 vehicles and 4 trailers will come into effect from 2359hrs on 18 June 2011.

Subject Matter:	Financial Standing

Cases referred to:	2003/30 Helms Coaches Ltd

REASONS FOR DECISION:

1)	This was an appeal from the decision of the Deputy Traffic Commissioner for the North Western Traffic Area made on 7 December 2010 when he refused to grant the Appellant’s application for an operator’s licence under the provisions of Section 13(3)(b) of the Goods Vehicles (Licensing of Operators) Act 1995

2)	The factual background to this appeal appears from the documents, the transcript and the Deputy Traffic Commissioner’s decision and is as follows:
(i)	On 7 September 2009 the Appellant applied for a Standard National Operator’s Licence authorising the use of 6 vehicles and 6 trailers. The Traffic Commissioner granted an interim licence on 1 October 2009, authorising 6 vehicles and 6 trailers.
(ii)	The Appellant was called to public inquiry to be heard on 16 March 2010, with financial standing a key issue. Mr Smith had previously been involved with a company called Automotivated Ltd, which went into liquidation owing over £80,000 to HMRC. Smith’s Logistics Ltd had been incorporated on 3 September 2009. Mr Smith’s father had created a start-up fund that had been adequate to meet the financial standing requirement for the initial interim licence.
(iii)	In relation to the application for 6 vehicles, a sum of £30,600 readily available capital and reserves was required, over and above the everyday “ins and outs”. It became apparent at the public inquiry in March 2010 that the company could not satisfy the Deputy Traffic Commissioner that it satisfied the requirement. An indication was given by Mr Smith that the operation could meet its contractual requirements based on the use of 4 vehicles and 4 trailers. Moreover, the Deputy Traffic Commissioner was assured that, by the time that 12 months trading had been completed in October 2010, the financial standing requirement would be satisfied and that overdraft arrangements would be in place.
(iv)	The Deputy Traffic Commissioner reduced the interim authorisation down to 4 vehicles and 4 trailers and adjourned the public inquiry until November 2010. An undertaking was accepted relating to the production of up-to-date financial evidence in time for the resumed public inquiry. The Deputy Traffic Commissioner made an error in calculating the sum required for final authorisation of 4 vehicles and 4 trailers, but this error did not have any significant consequence.
(v)	At the resumed hearing in November 2010 the Deputy Traffic Commissioner had before him a financial analysis of bank statements produced for the period 1 June 2010 to 19 October 2010. Average balances for that period fell well below the required figure (the precise figures are apparent from the case papers, but these are omitted from this public decision, in the interests of privacy). Having already allowed the Appellant a considerable period of time in which to accumulate and sustain a satisfactory level of readily available capital and reserves, the Deputy Traffic Commissioner concluded that the Appellant’s financial position had not improved sufficiently, and the statutory requirements were not satisfied. He therefore refused the application.
(vi)	A Notice of Appeal dated 9 December 2010 explained that, over the period of one month prior to the public inquiry, the requisite financial standing had been achieved after a family member had lent the company additional funds. Moreover, notwithstanding the concerns over financial standing, a satisfactory VOSA inspection had taken place.

3)	At the hearing of this appeal, the Appellant company was represented by Mr Smith, Director, and he was accompanied by Ms Coxon. 

4)	In 2003/30 Helms Coaches Ltd it was held that it was unfair to refuse a short adjournment to permit satisfactory financial evidence to be obtained if such evidence was readily available. But in the present case the Deputy Traffic Commissioner went much further than this and granted a lengthy adjournment, even though it was clear that the statutory requirements were not satisfied at the time of the adjournment - and it was far from clear the statutory requirements would be satisfied upon resumption of the public inquiry in November. This most accommodating approach was particularly noteworthy since this was an application, with the onus of demonstrating compliance firmly upon the shoulders of the applicant, and with no question of proportionality arising.

5)	We therefore asked Mr Smith whether he thought that the Deputy Traffic Commissioner had been fair with the company, and whether there was anything more that the Deputy Traffic Commissioner could reasonably have done, bearing in mind the statutory framework, and the obligation to be fair to all operators and promote fair competition. Mr Smith readily accepted that the Deputy Traffic Commissioner had been scrupulously fair with the company, and that there was nothing more that he could reasonably have done. 

6)	Mr Smith told us that the company had been able to maintain the position it had finally established shortly before the November public inquiry. He was, he said, now able to demonstrate satisfactory financial standing over the requisite period of time for the authorisation that he needed, but he feared being required to stop trading if required to start all over again with an application to the Traffic Commissioner. Mr Smith asked the tribunal to consider some additional bank statements, which showed balances after the date of the public inquiry. He hoped that we would be able to express satisfaction with the company’s financial standing as of the date of the hearing before us.

7)	We are not permitted to admit evidence of circumstances arising after the date of the public inquiry. Indeed, it is only in the rarest of situations that we can admit evidence of circumstances existing before the date of the public inquiry, if such evidence was not made available to the Traffic Commissioner or Deputy. Mr Smith understood the position and conceded that there was no basis upon which we could find that the Deputy Traffic Commissioner had been plainly wrong. He had allowed the company significant leeway and time, and was entitled in his discretion to decide that a line had to be drawn, and a decision had to be made.

8)	In all the circumstances we find that this appeal cannot succeed, even if the Appellant company was able, now, to demonstrate financial standing (and we do not know whether it can or not). We were, however, impressed with Mr Smith’s prompt recognition that the Deputy Traffic Commissioner had endeavoured to be extremely helpful and that, in the circumstances, his ultimate decision to refuse the application was plainly right. It follows that the appeal will be dismissed. 

9)	The order of the tribunal and the termination of the interim licence authorising 4 vehicles and 4 trailers will come into effect from 2359 hours on 18 June 2011. This, we hope, recognises the fact that the company has been allowed to trade for almost 18 months on an interim licence, and the Appellant now has time to make a fresh application, properly supported by clear and cogent evidence of financial standing for the authorisation sought. If such evidence is not presented, the Appellant cannot expect any further leeway or flexibility from a regulator required by statute to ensure that all aspiring operators, at the time of application or public inquiry, are able to demonstrate that they satisfy the legal requirements laid down for the grant of a standard national or international operator’s licence. We announced our decision at the end of hearing, and recommended that Mr Smith waste no time in progressing matters.

Judge Mark Hinchliffe, DCP
31 March 2011