Mika Logistics

An operator seeking to vary a goods-vehicle operator’s licence must demonstrate the prescribed level of available financial standing for the relevant number of vehicles. The requirement is continuing and is properly tested over a 28-day period, rather than by a single favourable balance. A limited company may rely on a portfolio of financial sources, but bank funds must be held in the company’s name. On appeal, the Upper Tribunal decides law and fact on the material before the Traffic Commissioner, but the appellant must show that the decision-making process or application of law required a different result.

Mika Logistics Limited appealed against the Traffic Commissioner for Scotland’s refusal, by letter dated 13 April 2022, to vary its standard national goods-vehicle operator’s licence from six vehicles and six trailers to ten vehicles and eleven trailers.

The required financial standing for the proposed authority was £48,500. The evidence supplied to the Office of the Traffic Commissioner produced an average of £34,432 over the assessed 28-day period. The appellant also relied on its director’s personal account and asserted that funding could be available from two other companies, but those matters had not been put to the Traffic Commissioner in that form.

The central issue was whether the refusal for inadequate financial standing was wrong on the material available when it was made.

1. Appeal dismissed. The appellant had not shown that the Traffic Commissioner’s refusal of the licence variation was wrong.

2. Under Goods Vehicles (Licensing of Operators) Act 1995, section 13A(2)(c) and paragraph 6A of Schedule 3, appropriate financial standing is a specific and continuing statutory requirement. The required amount increases with the vehicle authority sought. The appellant did not dispute either the required sum of £48,500 or the calculation showing average available funds of £34,432.

3. The request for evidence covering 28 days was reasonable. It prevented financial standing being demonstrated by a misleading favourable snapshot. Ordinary fluctuations caused by wages, business expenses, and vehicle deposits did not excuse failure to demonstrate the prescribed average available funds.

4. A limited company may demonstrate financial standing through different financial sources. However, bank funds relied upon by a limited company must be held in its own name. The director’s personal bank account could not therefore assist. In any event, its balances would not have raised the available funds to the required level.

5. The asserted availability of funding from other companies and the possibility of seeking authority for fewer vehicles had not been advanced to the Traffic Commissioner with supporting evidence. The Commissioner could not be faulted for failing to consider matters not expressly put forward. A fresh, better-evidenced application, potentially for fewer vehicles, remained a matter for the appellant.

6. Applying the appellate approach in Bradley Fold Travel Ltd & Anor v Secretary of State for Transport [2010] EWCA Civ 695, the Upper Tribunal found no error requiring a different conclusion and formally dismissed the appeal.

• Upper Tribunal (Administrative Appeals Chamber): dismissed the appeal: [2022] UKUT 235 (AAC).

• Traffic Commissioner for Scotland: refused the application to vary the standard national goods-vehicle operator’s licence, by letter dated 13 April 2022, for inadequate financial standing.