Shere Punjab Services Limited

Traffic commissioners must consider unaudited financial accounts, but may give them little weight where they do not show funds readily available to meet the operator’s obligations. Financial standing may be proved by acceptable evidence other than bank statements, although general solvency and hoped-for future income are insufficient. A period of grace requires tangible evidence that it is worthwhile and that there are reasonable prospects of a good outcome. Clear notice that financial standing is in issue, with time to make representations, can satisfy the statutory notice requirement even if later correspondence repeats requests for evidence.

Shere Punjab Services Limited held a goods vehicle operator’s licence authorising ten vehicles. Following a maintenance investigation, the Traffic Commissioner for the West Midlands revoked the licence for lack of financial standing and refused a period of grace. The company appealed, arguing that the Commissioner had failed to consider or properly weigh its unaudited accounts, had given inadequate reasons, had not allowed the statutory period for representations, and had wrongly refused a period of grace.

The Upper Tribunal considered whether the Commissioner’s assessment of the available evidence, his refusal of a period of grace and the notice given to the company involved an error of law. Other maintenance and compliance concerns raised for the inquiry were left undecided.

1. Appeal dismissed. The Upper Tribunal applied the review standard in Bradley Fold Travel Limited and Peter Wright v Secretary of State for Transport [2010] EWCA Civ 695: it would allow the appeal only if the reasoning and application of law required a different view. The Traffic Commissioner was not plainly wrong.

2. The Commissioner was required to follow the general directions in Statutory Document No. 2 under section 1(2) of the Goods Vehicles (Licensing of Operators) Act 1995. Bank statements were not the only possible evidence of financial standing. Other acceptable evidence could include suitable credit facilities, certified accounts or assets that could be realised without impairing the business.

   Following Thandi Coaches (Red) Ltd. [2021] UKUT 198 (AAC), unaudited accounts could not simply be excluded: they had to be considered, then given appropriate weight. The accounts here were not certified by a properly accredited person; the Tribunal adopted Thandi’s view that a director’s signature did not amount to such certification. The accounts showed mainly trade debtors and fixed assets, not funds readily available for unexpected repair bills. The Commissioner was entitled to give them very little evidential weight. Evidence that the company generally paid its debts did not establish that it could maintain its vehicles promptly and properly.

3. The Commissioner’s brief reasons for assigning little weight to the accounts were adequate in the circumstances because he referred to Statutory Document No. 2, which addressed their evidential status. More specific reasons identifying features of the accounts would have been preferable.

4. The call-up letter gave clear notice that financial standing was in issue, identified the evidence required and allowed the statutory period for representations under section 27(2) and (3) of the 1995 Act. Later emails warning that the bank statements were insufficient did not override that notice.

5. The principle in Duncan McKee [2014] UKUT 0254 (AAC) applied despite different facts. A period of grace requires tangible evidence beyond hope and aspiration that it will be worthwhile and that there are reasonable prospects of a good outcome. No credit, overdraft or invoice-financing facility was in place; the government assistance application had no known decision date; and the company remained substantially short of the required finance even if its hoped-for facilities were obtained. The Commissioner therefore did not err in refusing grace.

6. Once financial standing was not established and no period of grace was granted, revocation was mandatory under section 27(1). The Tribunal directed that the appeal be treated as disposed of 28 days after the decision was issued, when the stay would cease. It also noted that unresolved maintenance and compliance concerns left uncertainty for any future licence application.

1. Upper Tribunal (Administrative Appeals Chamber) — Appeal dismissed. The Commissioner’s revocation decision was upheld. For section 29(2) purposes, the appeal was treated as disposed of 28 days after issue, when the stay ceased.
2. Traffic Commissioner for the West Midlands — On 2 April 2025, revoked the operator’s licence for lack of financial standing after refusing a period of grace.