[2024] UKUT 225 (AAC)

Under s. s.27(1)(a) of the Act, a TC “shall direct that a standard licence be revoked if at any time it appears to him that the licence holder no longer satisfies one or more of the requirements of section 13A” [my underlining throughout]. Section 13A of the Act outlines the requirements of holding a standard operator’s licence, one such requirement being good financial standing. Financial standing is set by paragraph 6A of Schedule 3 to the Act.

On the basis of the evidence before the TC, we consider that he was entitled to find that the Appellant’s financial standing was not satisfactory at the time of the PI. Both at the PI and during the appeal hearing, the Appellant stated that he had sufficient funds in his bank account on that day, having collected in some of the money owed to his business. He submitted at the appeal hearing that he should have been allowed time to present that evidence, which he had offered to produce to the TC, during the PI, by way of email.

While we have some sympathy with the Appellant’s submission that he should have been allowed time to demonstrate financial standing, we also noted that he had been given sufficient notice of the need to produce evidence of financial standing prior to the PI, while also being made aware of the serious consequences if he did not. The Appellant has been in the industry for long enough to know what is required in terms of proving financial standing. He did not submit the evidence and he accepts that this is the case. The TC did not permit a current bank statement to be emailed to him on the day of the PI as it would not be stamped and therefore authenticated by the bank. As referred to by the TC, the case of LWB Limited [2011] UKUT 358 (AAC) found that a “snapshot” in time demonstrating financial standing is not enough. It is usual practice for a TC to require sight of a number of consecutive bank statements covering a period of months to show an average account balance which satisfies the financial standing requirement. It was appropriate for the TC to refuse sight of a single statement during a PI which showed a snapshot in time and which could not be presented in the correct manner.

Should the TC have instead adjourned to allow the Appellant time to produce the bank statements in the correct manner? We consider that the Appellant had been given sufficient opportunity to satisfy the TC that he was of good financial standing prior to the PI. Had financial standing been securely in place during the months prior to the call up letter, the Appellant’s bank statements could have, and should have, been presented well in advance of the PI. They were not forthcoming. It is likely that they would not have shown financial standing, and any adjournment to find the evidence would have simply delayed the inevitable.

Should the TC have taken the Appellant’s property into account when considering financial standing? The requirement for financial standing as part of holding an operator’s licence is to ensure that an operator can afford to pay for unexpected repairs to vehicles quickly, otherwise the temptation may be to use a potentially unsafe vehicle on the public roads in order to raise the funds to repair it. Cash sitting in the bank can be accessed swiftly. Property can be taken into account if it is independently valued and if it can be liquidated quickly to satisfy repair bills (LWB Limited [2011] UKUT 358 (AAC)). The Appellant’s property had been in the family for many years, and provides the location for the family home and business. It is not therefore likely to be tendered for conversion into cash, nor is it likely that this could be done at speed. There can be no criticism of the TC’s decision not to take the Appellant’s property into account.

We find that the TC was plainly right to have handled this aspect of the PI as he did. He was entitled to find that the Appellant lacked financial standing at the time of the PI, and s.27(1)(a) of the Act provides clearly that where an operator does not have financial standing the licence shall be revoked. The TC was left with no option. The appeal cannot succeed on the basis that the revocation due to lack of financial standing was “plainly wrong”.