Paula Jane Morris t/a Miss Bus

A traffic commissioner must correctly identify the maximum available period of grace before deciding whether to revoke an operator’s licence for lack of financial standing. Where the pandemic-specific extension under Regulation 2020/698 applied, an initial six-month period could be extended to 12 months. Treating six months as an absolute maximum was a material error of law.

Financial resources must nevertheless be within the operator’s immediate control. A potential loan requiring another person to transfer money is not available finance. A single favourable bank balance also does not establish financial standing, which must be satisfied on a continuing basis.

The appellant operated one minibus under a standard national public service vehicle licence. The Covid-19 pandemic reduced the business’s income and prevented it from meeting the £8,000 financial-standing requirement.

A traffic commissioner granted an initial six-month period of grace. When the appellant sought more time in April 2021, the Senior Traffic Commissioner concluded that there was no power to extend the period and revoked the licence. The appellant appealed to the Upper Tribunal.

The central issue was whether the pandemic legislation and the Contingency Statutory Document permitted an extension beyond the initial six months, and whether funds obtained from a friend established financial standing.

1. Appeal allowed. The Upper Tribunal set aside the revocation decision. Applying the appellate test in Bradley Fold Travel Limited and Anor v Secretary of State for Transport [2010] EWCA Civ 695, the decision was plainly wrong because it proceeded on the erroneous view that no power existed to extend the period of grace.

2. Article 13 of Regulation (EC) 1071/2009 normally permitted a period of grace of up to six months for financial standing. Regulation 2020/698, reflected in the Contingency Statutory Document, extended the maximum to 12 months where the qualifying pandemic circumstances existed. The initial six-month grant was the specified starting point, rather than a departure from it. The correspondence reasonably conveyed that a further assessment, including a possible extension, would occur in April 2021.

3. The Senior Traffic Commissioner therefore failed to exercise the discretion whether to extend the period. The pandemic was the cause of the continuing shortfall. The appellant had continued trading, obtained some forward bookings and secured funds when an extension was refused. In the exceptional circumstances, an extension ought to have been granted.

4. The appellant’s alternative argument about finance failed. Following LWB Limited [2011] UKUT 358 (AAC), finance is available only where the operator can decide immediately to spend it without first asking another person to make a transfer. The friend’s money was not available before it was transferred. Further, following NCF Leicester Limited [2012] UKUT 271 (AAC), a favourable balance on one day does not demonstrate the continuing financial standing required by Article 7.

5. Under paragraph 17 of Schedule 4 to the Transport Act 1985, the Tribunal could remit the matter or make its own order. Although a mistaken failure to exercise discretion will often justify remittal, no useful purpose would be served here. The revocation decision was set aside without a further order.

• Upper Tribunal (Administrative Appeals Chamber): allowed the appeal and set aside the revocation decision.
• Traffic Commissioner for the East of England: revoked the appellant’s public service vehicle operator’s licence by a decision notified on 10 May 2021, following expiry of a six-month period of grace.