Thompson v Customs and Excise  [2002] UKVAT(Excise) E00369 (13 November 2002)

E00369
Non-restoration of motor vehicle - Reasonableness of decision – Importer’s explanations disbelieved by Commissioners – Whether reasonable to do so – Proportionality – Appeal dismissed

LONDON TRIBUNAL CENTRE

RAYMOND FRANCIS THOMPSON	Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

Tribunal:	MR PAUL HEIM CMG  (Chairman)
MISS D M WILSON

Sitting in public in Plymouth on 19 June 2002

The Appellant in person

Mr M Barnes of counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2002

DECISION

1.	Mr Thompson appeals against a decision  made by the Commissioners on 22 January 2001 refusing to restore to him a vehicle seized by the Commissioners at Poole on 14 November 2000, and the goods it contained.  

2.	The Appellant was present at the hearing of his appeal and presented his own case.  The Commissioners were represented by Mr M Barnes of counsel.

3.	It is not in dispute that on that day the Appellant was stopped at Poole in Dorset when he disembarked from the boat from Cherbourg with his vehicle.  The officers who stopped him asked him a number of questions.  He had excise goods in his car above the minimum indicative levels set out in the Excise Duties (Personal Reliefs) Order 1992.  The officers read to the Appellant a statement that he was required to satisfy them that the goods were for his own use, and with his agreement they interviewed him and asked him a number of questions to which he replied.  The interview was recorded on tape.

4.	It is not in dispute that the Appellant’s vehicle contained 58.6 litres of spirits, 6.5 litres of spirits or fortified wine, 3,200 cigarettes, 1,200 grams of hand-rolling tobacco, 120 litres of beer, 221.5 litres of still wine, and 21.75 litres of sparkling wine. 

5.	It is clear from the record of interview that relatively early on in the interview the officers suspected that the Appellant was bringing in excise goods which were not for his personal use, as the interview established that the Appellant had made a considerable number of day trips from June to November 2000 through Poole, Portsmouth and Plymouth to France.  In particular he had made day trips from Poole on 4 October 2000, on 13 October 2000, on 8 November 2000 and on 13 November 2000.  Between 18 October and 31 October he had apparently been on holiday in Spain.  

6.	It is also clear that the officers did not accept as true some of the answers he gave, and some of the explanations which he offered for his trips abroad.  For example he said that he had been abroad to look at property, that he had been to an estate agent in Cherbourg who had told him where a particular property was and that he then went to see it.  Asked whether he had the details of the property with him he replied “no, no I didn’t, I didn’t like it so I didn’t keep it”.  Asked later in the interview “you’ve been in estate agents and spoken to estate agents in France, have you or haven’t you”?  He replied “well I have and I haven’t” and later explained that this was because he could not speak French.  He said that he had taken a thousand pounds with him and that he had a couple of  hundred left.  He said he thought that there was some cash in the car but he was not sure where he put it, he had some in his pocket and some in the car.  He did not know how much was in the car.  He was asked about his financial resources and said that he received an old age pension, that he lived rent free in a flat above his son-in-law’s business, over which business he had some claim.  He earned money as a chef and as an occasional decorator.  His wife was in employment.  He first said that she earned £2000 a month and then said it was £1,200 a month.

7.	The Appellant gave a number of explanations for the purchases in issue, such as that he was stocking up for Christmas, that he was to get money from his daughter for work he had done for her, that he smoked about a carton of cigarettes a week and drank about four bottles of  spirits a week and that some of the goods were for his wife and as presents for his daughters.  Nevertheless the officers were not satisfied and plainly stated to the Appellant that they considered that the goods were not for his own use, that he knew that it was illegal to bring back so much, that in six weeks he had purchased roughly 88 litres of spirits and 36 cartons of cigarettes and that he was a bootlegger.  They put this to him in terms, and the Appellant denied it.  

8.	A notice of seizure in respect of the goods was issued to the Appellant with form C156 annexed to it.  A notice of seizure for the vehicle was also issued to him.  On 11 December the Appellant’s solicitors telephoned the Commissioners’ office at Poole with regard to these seizures and were advised to contest the seizure in writing.  There was then correspondence with the Appellant’s solicitors, who, on 2 March 2001 stated that they appeared not to have been instructed.  Later in March the Commissioners wrote to the Appellant saying that no appeal had been received but that if the Commissioners’ letter of 22 January 2001 had gone astray the Appellant would be given a further period of 30 days from the date of the letter to appeal to the VAT & Duties Tribunal.  The letter informed the Appellant that the condemnation proceedings would continue and would be heard normally in a Magistrates court as a separate matter to any tribunal appeal.  An information pack was sent.  

9.	The Appellant’s notice of appeal was received on 2 April 2001.  In his notice of appeal he states that when he was apprehended at Poole by Customs he was immediately treated as a bootlegger and whatever he said was misconstrued.  He said that he had been to France on many occasions, he was looking for a property, and eventually hoped to move to France.  He gave information about his personal circumstances.  He said that the trip on which he was stopped was to be his last trip until March or April of the current year.  He had a wife and two daughters.  He gave wine to his daughters.  Christmas was approaching and he was giving two big parties and he had purchased a selection of spirits as Christmas presents.  He had no intention of selling any of the products.  He got a bit carried away and purchased more than he ought to have done.  

10.	Meanwhile on 10 March the Appellant had written to the office of HM Customs and Excise in Poole to say that he was completely at a loss to understand what was happening because he had appealed against the seizure of his vehicle and his goods and had heard nothing.

11.	There appears to have been another exchange of correspondence because on 9 June 2001 the Appellant wrote again complaining of delay.  On 19 June Mr Martin  Hulbert replied explaining that the Appellant had confused the two sets of proceedings, and asking him to contact the court at Poole about the condemnation proceedings, which apparently had been dealt with in the Appellant’s absence.  At the same time Mr Hulbert also wrote to the Clerk of the Court at the Law Courts in Poole explaining this confusion.  

12.	On 22 February 2001 Mr Hulbert, as reviewing officer, decided not to restore the Appellant’s car and the excise goods.   This is the decision under appeal.

13.	The Tribunal’s jurisdiction over this matter arises under sections 14 to 16 of the Finance Act 1994.  The Commissioners’ decision is covered by paragraph 2(1)(r) of Schedule 5 to the Act and is thus one which is subject to review and appeal. Section 15 of the Act  obliges the Commissioners to carry out a review when required to do so.  Mr Hulbert carried out the review.

14.	Section 16 of the Act expresses the jurisdiction of the Tribunal in the following terms:

“16(1)	Subject to the following provisions of  this section, an appeal shall lie to an appeal tribunal with respect to any of the following decisions, that is to say –

(a)	any decision by the commissioners on the review under section 15 above (including a deemed confirmation) under subsection (2) of that section; and
(b)	any decision by the commissioners on such a review of the decision to which section 14 above applies as the commissioners have agreed to undertake in consequence of a request  made after the end of the period mentioned in section 14(3) above.

(4)	In relation to any decision as to an ancillary, or any decision under review of such a decision, the powers of the appeal tribunal on an appeal under this sections hall be confined to a power, where the tribunal are satisfied that the commissioners or other person making the decision could not reasonably have arrived at it, to do one or more of the following, that is to say –
(a)	to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;
(b)	to require the commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision; and 
(c)	in the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare the decision to have been unreasonable and give directions to the commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in future.

…

(8)	… references in this section to a decision as to an ancillary matter are references to any decision of a description specified in Schedule 5 to this Act which is not comprised in a decision following within section 40(1)(a) to (c)  above”.

15.	Section 16 does not give the Tribunal power to hear this matter anew; its jurisdiction is supervisory, over the reasonableness or otherwise of the Commissioners’ decision to refuse to restore the car and the goods seized. 

16.	“Reasonableness” has been defined in a series of past cases including that of Bowd v Commissioners of Customs and Excise [1995] V&DR 212, as “Wednesbury reasonableness”.  Therefore the Tribunal can only find the Commissioners’ decision to be unreasonable if the Appellant can show that they have acted in a way in which no reasonable panel of commissioners could have acted, that they have taken into account some irrelevant matter or disregarded something to which they should have given weight or made some other error of law.  

17.	The issue of whether the car or goods should have been seized and forfeited can be the subject of condemnation proceedings, which the Appellant says that he has sought to bring.  That is not a matter which is within the Tribunal’s jurisdiction.  The Appellant also attacks the reasonableness of the Commissioners’ decision on review.  That is within the Tribunal’s jurisdiction.  

18.	He says that the officers did not believe a word he said.  He panicked.  He could not afford to lose the vehicle.  He would in any event not have travelled to France until next March.  He could not stand the cold.  He admitted having the amount of goods in question but said that they were for Christmas presents and for Christmas and New Year parties.  The goods were for his own use.  He went frequently to France as he enjoyed it.  He had earned good wages.  He was to undertake very large banquet.  At the banquet he would not have dispensed alcohol.  The banquet would have been for 120 people at £12 per head.  He was expecting considerable funds from the sale of a caravan park in which he had a part share.  He lived there rent-free.  He had a share portfolio.  The officers misconstrued what he said.  They had no proof against him.  They should be required to justify their actions.  He had lost the goods and the car and his chance of earning a living.  He was not a seasoned bootlegger.  On previous occasions he had been stopped but waved through.  In answer to questions in cross-examination the Appellant said that he was aware that there was duty on cigarettes and alcohol.  He was aware of the guidelines but that these did not apply if the goods were for own use and not for resale.  He had not misled the officers. He had been told to sign the statement and did so.  Asked whether he had read it and signed it he said that if it had his signature on it he could not argue.  He agreed that the excise goods were found in the car.  He said he was always going to estate agents in France.  Both the statements that he had visited estate agents and that he had seen a property in an estate agent’s window were true.  He went into several estate agents.  He also looked into several estate agents’ windows.

19.	The Appellant was asked a number of questions about the caravan park of which he claimed to be part owner.  He was asked about the funds he had spent on the buying trip.  He said he took cash with him.  He always had cash.  He said that he saw the notice which mentioned the guideline limits.  However he was bringing goods for his own use.  He was asked why he did not tell the officers of Customs and Excise on entry and said that perhaps he should have but it never crossed his mind.  He agreed that he was a frequent traveller and said that this was nothing illegal.  He agreed that he had travelled to the continent repeatedly in one period of five weeks.  He was asked whether the two-litre bottles of wine which he brought did not represent catering sizes.  He said that he was not selling wine or beer at the banquet.  He was only the chef providing food.  He gave his family presents of a few bottles of wine.   The alcohol was for parties.  He said that this was not improbable.  He was asked how he could have said in his letter of 10 March 2001 to the Commissioners that he was seriously in debt when shortly before he had been spending large sums of money on making purchases abroad.  He said that he was expecting money.  It was put to the Appellant that he had admitted to bringing in 6  bottles of spirits on each trip which made 48 bottles of spirits within five weeks, nearly 10 bottles of spirits a week.  He said he could not drink that much but he could drink 3 bottles a week easily.  

20.	The Commissioners’ case relies on the evidence of Mr Martin Hulbert at the time reviewing officer.  He explained his statement and said that he had been acting independently.  His duty was to look at all the evidence submitted to him and to go through the review process.  First, he was to confirm that the goods exceeded the indicative levels.  Here they exceeded them in every sense.  Next he was to confirm that the persons stopped had been given an explanation about why they were being interviewed.  That had been done.  The onus was then on the individual to convince the officers that the goods were not for commercial purposes.  If he failed to do so the goods were liable to forfeiture.  The vehicle carrying the goods was similarly liable to forfeiture.  It was his job to go through the material and confirm that he too was satisfied that the goods were intended for a commercial purpose.  There was in this case nothing subsequent to the interview and seizure that meant that he should depart from the decision taken.  At that stage he was required to look at the restitution of the vehicle and the goods.  He had before him a bundle of papers containing the interview notes, the seizure documents, the invoices and travel lists.  He had letters from the Appellant’s solicitor.  The solicitor had offered payment for the unpaid taxes. Proportionality was mentioned.  He looked at the seizure decision.  He considered that the goods were bought in to sell at a profit.  His reasons for reaching that conclusion were the quantities involved, the bottle sizes and the types of wine.  The Appellant seemed to know exactly what he had bought, as if there had been a shopping list. The Appellant was given plenty of opportunities to explain his previous trips.  He thought the Appellant was both evasive and misleading in his answers.  The explanation of consuming such large quantities were unreasonable given the amount of travelling he did. If he drank as much as he said he would not have been fit to drive.  He had in his mind that the Appellant was going to do a banquet and that the wines were typical of a catering sizes.  Being on a mobile home park would present a ready outlet.  He then considered restitution and proportionality.  He also considered the Commissioners’ policy which was that vehicles would not be restored unless there were special circumstances.  Special circumstances might be that it would be inhumane not to restore, for example, in the case of disabled persons.

21.	The witness said he went through his own process.  This was the first occasion where the value of the vehicle was greater than the revenue in question.  He consulted with the people in charge of policy.  It was considered that proportionality related to the seriousness of the matter and not to the individual quantity of goods.  He took the decision not to restore the vehicle.  He considered the value of the vehicle to be in excess of the value of the goods but he was mindful that previous revenue goods had also been brought in.  The quantity of goods was such that a vehicle of this type had to be used.  There were 400 kilos of liquids.  As far as the value of the vehicle was concerned the Commissioners considered the value as what they could get for it.  That might be £5,000 or £6,000.  He was aware that the Appellant had paid more.

22.	The witness said that he was aware of the decision in Lindsay v Commissioners of Customs and Excise.  He was aware of the importance of  proportionality when goods were bought in for family and friends at costs.  In the case of goods brought in to sell at a profit it was still necessary to consider the value of the vehicle with all the other circumstances.  If he had been asked to review the matter today he would reach the same conclusion.  He was convinced that this was a commercial importation for profit.  

23.	The witness was asked about the statement made by the officers that the Appellant had taken the immobiliser out of his car, and that this was a lie.  He said that he knew the officer and believed his statement.  He would have no reason for saying that if it was not so.  He was asked about the suggestion that the Appellant at his age could not carry 400 kilos of goods to his first floor flat and agreed that he might take each box up separately.  As to the value of the vehicle the witness said that he relied on Glass’s guide.

24.	The Appellant’s case is clearly that he was bringing in goods for his own use, that the goods and car should not have been forfeited and that they should now be restored.  His explanations should have been believed and would have led to those conclusions.  The forfeiture of the vehicle was disproportionate.  

25.	The Commissioners on the other hand say that in the absence of relief from duty the goods were dutiable under section 2 of the Tobacco Products Duty Act 1979 and section 36 of the Liquor Duties Act 1979.  Relief from duty could be given under the Excise Duties (Personal Reliefs) Order 1992. Under that Order a community traveller entering the United Kingdom could be relieved from payment of any duty on excise goods which he has obtained for his own use.  However relief  was subject to the condition that the goods were not held or used for a commercial purpose.  The Commissioners could require a person to satisfy them that the goods were not being held or used for a commercial purpose.  If he failed to satisfy them the goods would be treated as being held for a commercial purpose.  Own use did include a personal gift, unless the person making the gift received any money or moneys worth or reimbursement in connection with the goods.  

26.	The Commissioners say that they were plainly entitled to arrive at the decision which they did in relation to commerciality for the goods brought in by Mr Thompson.  He was importing goods far in excess of the indicative limits set out in the schedule to the Personal Reliefs Order.  The Commissioners were entitled to ask him to satisfy them that they were not held for a commercial purpose.  The officers interviewing Mr Thompson concluded that he had failed to provide credible explanations for the frequency of his travel, his ability to purchase excise goods in the quantities he asserted, given his available income, and that the quantities purchased did not accord with the claimed rate of personal consumption.  The Commissioners submitted there was nothing unreasonable in the conclusions reached by the officers in all the circumstances.  The Tribunal should not substitute its own conclusions for those of the officers.  The legality of the seizure could be challenged before the Magistrates court.

27.	The Commissioners say that the officers’ decision, confirmed on review, was taken for the right reasons.

28.	The Commissioners referred the Tribunal to the appeal of Lindsay v Commissioners of Customs and Excise [2002] 3 All ER 118, and to the distinction there drawn between those who were using their cars for commercial smuggling, that is to say, smuggling in order to sell goods at a profit and those who were importing goods for social distribution to family or friends in circumstances where there was no attempt to make a profit.

29.	The judgment of Lord Phillips of  Worth Maltravers MR contains the following passage at page 137:

“The Commissioners’ policy does not, however, draw a distinction between the commercial smuggler and the driver importing goods for social distribution to family and friends in circumstances where there is no attempt to make a profit.  Of course even in such a case the scale of importation, or other circumstances, may be such as to justify forfeiture of the car.  But where the importation is not for the purpose of making a profit I consider that the principle of proportionality requires that each case should be considered on its particular facts, which will include the scale of  importation, whether it is a “first offence”, whether there was an attempt at concealment or dissimilation, the value of the vehicle and the degree of hardship that would be caused by forfeiture.  There is open to the Commissioners a wide range of lesser sanctions that will enable them to impose a sanction that is proportionate where forfeiture of the vehicle is not justified. 

I do not think that it would be impractical to distinguish between the truly commercial smuggler and others.  The current regulations shift the burden to the driver of showing that he does not hold goods “for commercial purposes” when these exceed the quantities in the schedule.  In a case such as the present, the driver importing for family or friends should be in a position to demonstrate that that is the case if called upon to do so (see Goldsmith v Customs and Excise Commissioners [2001] EWHC Admin 285 at [24], [2001] 1 WLR 1673, per Lord Woolf CJ).

Unfortunately, in the present case, and, I suspect, in others, the Customs officers have drawn no distinction between the true commercial smuggler and the driver importing goods for family and friends.  Because of the confusion to which I referred at the outset, because both have been treated as subject to almost automatic forfeiture.  Review officer Florence appears to have understood that the Commissioners’ policy rendered it irrelevant whether or not Mr Lindsay’s story was true and equally irrelevant the value of his car and the effect that its derivation would have on him.  I believe that she correctly interpreted the policy.  

For these reasons I consider that the Tribunal was correct to decide that Mrs Florence’s decision could not stand because she had failed, when reaching it, to have regard to all material considerations.”

30.	In this case it is clear that the officers made the distinction required in the reasoning set out in the extract from the judgment in the appeal of Lindsay, and that they distinguished between the case of what might be called a non-profit making importer and a commercial smuggler.  They clearly disbelieved the Appellant’s explanation and stated in terms that they considered him to be a commercial smuggler.  The question is whether that decision was an unreasonable one in the way in which reasonableness has been defined in the cases referred to earlier.  The issues here can be analysed in the following way.  Did the Commissioners have a policy which was unreasonable?  Was their policy mistaken in law?  Did they apply their policy unreasonably?  Did they take into account any irrelevant matter?  Did they fail to take into account any matter which they should have given weight?  Did they make any other mistake of law?

31.	The Commissioners have a policy, to which the Tribunal has been referred and which Mr Hulbert applied.  That policy, based on the fact that there is considerable loss to the revenue by illicit importation of dutiable products, commonly referred to as “bootlegging”, is that where goods are found to be above the guideline levels and the person importing them is unable to convince the officers that they are not for a commercial purpose, they and the vehicle in which they are travelling are seized, and that as a matter of policy, even on the first offence, neither will be restored, subject to the existence of exceptional circumstances, to some of which Mr Hulbert referred in his evidence.

32.	In the Tribunal’s view clearly, the Commissioners are entitled to have a policy to deter bootlegging.  They have available to them a range of sanctions, including forfeiture of goods and vehicles in which they are carried.  This last is not a new sanction.  Its use is publicised.  It is called the “use it and lose it” policy.  The Tribunal considers that the existence of excise duties on alcohol and tobacco products, and the limitations on importations to personal use are well known.  The Appellant was certainly aware of them.  To that extent the Tribunal sees nothing to criticise in the existence and application of a rigorous policy, when the reasons for that policy are well known and well publicised, and the conditions for duty free importation for travellers easily ascertainable.  

33.	The officers who stopped the Appellant considered that his explanations that the goods were for his personal use were not satisfactory and concluded that they were for a commercial purpose.  On the basis of the quantities involved and the information which he gave they concluded that he was engaged in importing goods for resale at a profit.  Were they unreasonable in rejecting the Appellant’s explanations that the goods were for his own use, including in that term the making of gifts?  In reaching that conclusion they relied on the quantity of goods which, being 400 kilos in weight would well be described as being in commercial quantities, second that the Appellant made frequent day trips to France, third that some of his explanations, for example that of visiting estate agents appeared to them implausible, fourth that his explanations of levels of own consumption appeared to them to be unreasonably high, and fifth that his explanation of the resources available to him lacked plausibility.  The same reasons were in the mind of the reviewing officer in exercising his decision not to restore.  

34.	In considering whether the Appellant has shown that the Commissioners’ decision not to restore was unreasonable, and his grounds for so saying, the Tribunal examines first whether the Commissioners’ application of their policy, examined in the light of the decision in the appeal of Lindsay, was erroneous in law.  Subject to that which is said later, the Tribunal thinks it was not.  The Tribunal next considers whether the Commissioners took into consideration the matters which they should have examined.  They took into account the Appellant’s explanations but rejected them.  They took into account the arguments made on his behalf by his solicitor.  They considered the issue of proportionality.  It appears to the Tribunal that they took account of all the relevant matters and that they did not bring in irrelevant considerations.  It is not suggested that they made any other mistake of law, and none is apparent, subject to what is said later.  

35.	It is clear from the evidence of Mr Hulbert that the Commissioners did not apply the policy blindly in this case.  They did consider the circumstances advanced to them, both by the Appellant and his solicitor.  

36.	There is no dispute about the legal provisions which govern this appeal.  They are those set out in articles 3 and 5 of the Excise Duties (Personal Reliefs) Order 1992, the indicative level set out in the schedule to that Order, section 49 of the Customs and Excise Management Act 1979 which provides for the liability to forfeiture, section 139 of the same Act which provides for the power of seizure, section 141 of the same Act which provides for the liability of seizure of vehicles, Schedule 3 of the same Act which provides for the procedure for seizure and forfeiture, and section 152 of the same Act which states that:

“The Commissioners may, as they see fit –

(a)	stay, sist or compound any proceedings for an offence or for the condemnation of any thing as being forfeited under the Customs and Excise Acts; or
(b)	restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under these Acts.”

37.	No error is suggested in the application of these provisions, save that the Commissioners’ decision to seize and forfeit the goods and the vehicle and not to restore them are attacked.  The Tribunal has no direct jurisdiction over the decisions to seize and forfeit, and its jurisdiction over the refusal to restore is supervisory in terms of section 16 of the Finance Act 1994.

38.	Two further considerations arise, which required to be examined before the Tribunal decide whether the Commissioners’ decision under appeal can stand.

39.	The first is whether the limited jurisdiction of the Tribunal provided for in section 16 of the Finance Act 1994 conflicts with the primary community law right to bring dutiable goods into the United Kingdom without payment of further duty than that paid in the country of purchase.  

40.	The judgment in the appeal of Lindsay refers to article 9 of  the Sixth Directive and to the fact that excise duty shall become chargeable where products for consumption in a Member State are held for a commercial purpose in another Member State.  It follows therefore that the Council Directive EEC 92/12 itself provides for limitations on the right to import goods free of duty, where the goods are held for a commercial purpose, and lays down the factors which Member State must take into account, for deciding whether goods are intended for a commercial purpose.  Among these factors are precisely the guide levels which Member State may lay down as a form of evidence.  These are the guide levels appearing in Schedule 5 of the Personal Reliefs Order.  The Tribunal therefore finds that there is legislative justification for the interference with the right to bring in goods free of duty, and that the right for community travellers to import excise goods free of duty is subject to conditions.  The right to import such goods is not absolute.  Its exercise, if impeded, is subject to appeal.

41.	Two points then arise under the Human Rights legislation.  The first is whether the Tribunal’s limited jurisdiction can be seen as a violation of article 6 of the European Convention of Human Rights in that the Tribunal’s limited jurisdiction does not allow access to all the issues which the Appellant seeks to raise.  However the Appellant has access to an independent tribunal for a decision on the merits of  seizure so that this double avenue appears to the Tribunal, although a full argument has not been addressed, and subject to such argument, to satisfy the requirements of article 6 of the Convention.  The Tribunal is not informed of the final conclusion of the condemnation proceedings but they were clearly commenced.

42.	The second question arising under the Convention is whether there has been breach of article 1 of the First Protocol of the Convention which provides:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions.  No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.  

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalty”.

43.	The Tribunal here is guided by the analysis of the European Court of Human Rights in Sporrong & Lonroth v Sweden (1982) 5 EHRR 35 at paragraph 61 and 69 as follows:

“61.	The first rule, which is of a general nature, enounces the principle of peaceful enjoyment of property; it is set out in the first sentence of the first paragraph.  The second rule covers the deprivation of possessions and subjects it to certain conditions; it appears in the second sentence of the same paragraph.  The third rule recognises that the States are entitled, amongst other things, to control the use of property in accordance with the general interest, by enforcing such laws as they deemed necessary for the purpose: it is contained in the second paragraph.  The court must determine, before considering whether the first rule was complied with, whether the last two are applicable.

…

“69.	… the court must determine whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights.  The search for this balance is inherent in the whole of the Convention and is also reflected in the structure of Article 1”.

44.	In considering the question of proportionality the Tribunal again derives guidance from the judgment in the appeal of Lindsay.  The distinction is made between two classes of importers, the first the private individual who buys goods on behalf of others but not in circumstances which would not normally be described as being “for a commercial purpose” and the second, the person who imports for a commercial purpose, the “commercial smuggler”.  In the first case, clearly the less serious, the court held that there would be liability to pay the duty by reasons of the provisions of the Tobacco Products Duty Act 1979.  Thus the payment of the duty is appropriate for the less serious infringement.  It must follow that for the more serious a more severe sanction is appropriate.  In this case the sanction is the loss occasioned by the seizure and forfeiture of the goods and the motor car, accepted for the present proceedings as being worth more, indeed considerably more, than the duty.  The “fair balance test” applied by the European Court in the case of Sporron & Lonroth must be applied here.  To apply that test all the circumstances must be considered, that is to say not only the general problem of bootlegging and the Commissioners’ policy to reduce it, but also the specific circumstances of the present case.  

45.	In the present case the Commissioners decided that the Appellant was undertaking substantial intentional illicit imports for a commercial purpose.  They had clear grounds for reaching that conclusion.  They had grounds for rejecting the Appellant’s explanations.  The onus is on the Commissioners to reach a decision.  It is not for the Tribunal to make its own judgment on the value of  those grounds.  It is required to review the reasonableness of the Commissioners’ decision to refuse to restore, and also to decide whether on the grounds found, it was a proportional decision. They were not acting unreasonably when they decided that those reasons justified a decision not to restore the goods and the vehicle to the Appellant.  The Tribunal considers that in the circumstances of this case their decision met the requirements of the fair balance test.  They balanced the circumstances of the Appellant, and the value of the vehicle, against the seriousness of the illicit importation.  In the result, the loss to the Appellant will be greater than the excise value of the goods but the decision in Lindsay envisages that result.

46.	Accordingly the Tribunal finds that the Appellant has not shown that the Commissioners’ decision not to restore the goods and the vehicle breached the obligation of reasonableness in the way in which that obligation has been defined nor that it was in the result disproportionate, and that accordingly this appeal must be dismissed.

 PAUL HEIM CMG
CHAIRMAN

RELEASED: 13 November 2002

LON/01/8038