Neutral Citation Number: [2010] UKUT 257 (AAC)

Appeal No. T/2010/23

IN THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

TRAFFIC COMMISSIONER APPEALS

ON APPEAL from the DECISION of

Richard Turfitt Traffic Commissioner for the

Eastern Traffic Area Dated 22 February 2010

Before:

Frances Burton, Judge of the Upper Tribunal

Leslie Milliken, Member of the Upper Tribunal

George Inch, Member of the Upper Tribunal

Appellant: ENVIRONMENT SOLUTIONS LIMITED

Attendances:

For the Appellant: Colin Pharaoh

Heard at: Victory House, Kingsway, London WC2B 6EX

Date of hearing: 14 June 2010

Date of decision: 13 July 2010

DECISION OF THE UPPER TRIBUNAL

IT IS HEREBY ORDERED that this appeal be ALLOWED.

REASONS FOR DECISION

1.               This was an appeal from the Decision of the Traffic Commissioner

for the Eastern Traffic Area dated 22 February 2010 when he refused the Appellant Company’s application to vary its standard national operator’s licence on the grounds that he was not satisfied that the company was of sufficient financial standing for the increase in the number of authorised vehicles sought by the application.

2.     The factual background appears from the documents and the Decision letter from the Office of the Traffic Commissioner dated 22 February 2010 and is as follows.

( i) The Appellant company was granted a standard national licence in July 2007 authorising 4 vehicles and no trailers. The variation application, dated 4 August 2009, was for 6 vehicles and no trailers, an increase of 3 vehicles from the number currently in possession. The variation application had been correctly advertised and there was no adverse history. There were 2 Directors of the Appellant company, Mr Colin Pharaoh and his wife, Mrs Tracey Pharaoh, and Mr Pharaoh was also the nominated Transport Manager. £30,600 was required to demonstrate financial standing for the variation. There had been a satisfactory maintenance investigation in August 2008.

(ii) Refusal of the variation was ultimately based on sections 13 (3)(b) and 17, and Schedule 3 of the Goods Vehicle (Licensing of Operators) Act 1995 (“the Act”) due to insufficient finance, following extended submission of various financial documents, none of which (separately or together) apparently satisfied the Traffic Commissioner, inter alia because the operator was often in excess of its permitted overdraft limit, although this was on one occasion explained by the purchase of 2 vehicles and associated refund of VAT. The Traffic Commissioner had also taken exception to the lack of supporting statements from the company’s credit card provider, which had confirmed an availability of credit of £20,000, without, however, providing statements to confirm the fact of that current or continued availability. The Traffic Commissioner had also been concerned about the fact that a trading subsidiary of the Appellant company, Re-cycle Direct.com Limited, was actually operating the Appellant company’s vehicles, and that (although that subsidiary had more than sufficient funds on its own to support the Appellant company’s licence, including the variation of authorisation sought) it was a separate legal entity, and not therefore itself authorised to operate any vehicles. The net result had therefore been that (although the Appellant company itself had a sufficient debtor book to clear the overdraft and to put itself in funds by about £50,000 if all sums owing were paid immediately and Mr Pharaoh himself had said that he was personally willing to transfer funds into the Appellant company’s account as and when required) the Appellant company was not itself showing sufficient financial standing for the variation sought; and as Recycle-Direct.com Limited was not shown as a named subsidiary on the existing licence, the Appellant company’s existing licence was recommended for referral for revocation proceedings under s 27(1)(b) and Schedule 3 of the Act.

3.     At the hearing of the appeal the Appellant company was represented by Mr Colin Pharaoh who confirmed that the vehicles were indeed owned by the Appellant company and used by Recycle-Direct.com Limited, but that he had been informed by the caseworker, Janine Harney at VOSA, that Recycle-Direct.com Limited could be specified as a subsidiary on the licence so that there was no problem in their operating since the Appellant company was a holding company and Recycle-Direct.com Limited was wholly owned by that company. He confirmed that he was a Director of both and Managing Director of the Appellant company, and acted as Transport Manager for both: it was his impression that despite the extensive emails between himself and Janine Harvey, the caseworker (and others when she was off sick or on holiday) and the Traffic Area Office, the Traffic Commissioner had simply not taken all the facts into account. With all the different people dealing with his case it had apparently not even been taken into account that his own financial position was extremely solid, and that besides all the financial arrangements disclosed he also had £300,000 in another account. Despite all the funds available, the Traffic Commissioner was now trying to revoke the Appellant company’s licence. Mr Pharaoh reiterated that the Appellant company was worth £2m, he personally was worth considerably more and he had been in business since 2002. He pointed to (i) the bundle of relevant emails sent to the Tribunals Service clerk on 24 May 2010 in preparation for the appeal hearing, and (ii) the letter and supporting documents sent to him by his accountants, Fisher Meredith, Chartered Accountants, which demonstrated that he did have funds available in the relevant period required by the Traffic Commissioner, in excess of the figure of £30,600 required. The accountants’ letter also confirmed the shareholding in Recycle-Direct.com Limited (with supporting documentation) as belonging to the Appellant company.

4.     We are of the view that there has been significant confusion about the Appellant company’s financial standing as there has clearly been no consistency in the manner in which the variation application has been treated, especially as grounds now appear to be sought on which to revoke the Appellant company’s licence, although there would appear to be more than sufficient financial standing available. We therefore remit the case to the Traffic Commissioner for his further consideration. He can, of course, sit with a financial assessor if necessary in order to consider the overall financial position, although once all the relevant documentation is collated and considered by one person, and in relation to a single qualifying period, the complexity may not ultimately be such that external expertise of this sort will be necessary.

5.               The appeal is therefore allowed.

Frances Burton

Judge of the Upper Tribunal

13 July 2010