United Kingdom VAT & Duties Tribunals Decisions

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Cite as: [2006] UKVAT V19722

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Prebble C & Prebble H (trading in partnership) v Revenue & Customs [2006] UKVAT V19722 (18 August 2006)

19722

PROCEDURE – Application to set decision aside – Failure to appear at the hearing – Appellant failed to appear at hearing when appeal was determined against him – Appellant applied to have decision set aside – Whether just to do so – Value Added Tax Tribunals Rules 1986 r. 26(3)

LONDON TRIBUNAL CENTRE

PREBBLE C & PREBBLE H Appellants

(trading in partnership)

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: STEPHEN OLIVER QC (Chairman)

Sitting in Maidstone on 15 August 2006

The Appellant, C Prebble, in person

Kieran Beal, counsel, instructed by the acting general counsel and solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2005


 


DECISION

1. On 1 November 2005 the Tribunal heard and determined the appeal of the Appellants against a civil penalty for dishonesty conduct. No one was present to represent the Appellants. The circumstances of that hearing are summarized at the start of the decision released on 19 November 2005 (VAT Dec 19,331).
2. The penalty notice appealed against by the Appellants was issued on 14 July 1998. The penalty appealed against was a single penalty covering a seven year period from 1991 until 1998. The Appellants appealed and the matter came on for hearing before the tribunal in 2000. No one was present at that hearing to represent the Appellants. The tribunal gave leave, on Mr C Prebble's subsequent application under rule 26(2) of the Value Added Tax Tribunals Rules 1986, for the matter to be re-heard. It came on for re-hearing on 12 December 2003 before a differently constituted tribunal.
3. At the hearing on 12 December 2003 Mr C Prebble was present. He gave evidence and presented the case for the Appellants. The Tribunal found as a fact that the dishonest conduct had started some three years into the seven year period. It specifically rejected as dishonest conduct the deregistration of the Appellants' business that had taken place on their application in 1991. The Tribunal did not determine the appeal at that hearing. It occurred to the Tribunal after the conclusion of the hearing that the whole penalty notice might have been legally ineffective on the basis that it violated the time limits that required findings of dishonesty to enable out of time assessments to be made. As no argument had been directed at that point, the tribunal invited the parties to attend a further hearing to argue the point as a legal issue. The Appellants were given an opportunity to apply for free legal representation. They apparently did not do so.
4. A further hearing to determine the legal issue was fixed for August 2004. This had to be vacated because of other pressures on Mr Prebble. When the hearing was finally fixed for 1 November 2005, the tribunal was informed that Mr Prebble was in prison serving a sentence that was likely to last until a date in 2007.
5. When the hearing on 1 November 2005 started, the Tribunal decided that as the legal issues had been thought up by the Tribunal, and not by Mr Prebble on the basis that they might operate in his favour and as those points raised technical legal points, it was appropriate to proceed with a further hearing in the absence of the Appellants. The decision following that hearing concludes, for the legal reasons explained in paragraphs 37-43, that the penalty notice was valid but excessive. The Tribunal decided that the penalty assessment should be reduced from £13,910 to £6,845. This was on the basis that the penalty notice was effective to the extent that it covered the period for which dishonesty had been proved.
6. In due course Mr C Prebble asked the Tribunal for another re-hearing of the matter. The principal reasons put forward by Mr Prebble (at the present hearing) are these. First he said he would like to have the opportunity of calling his accountant, a Mr Webb, to give evidence to enable him to question Mr Webb as to the circumstances of the deregistration in 1991 and about the circumstances in which Mr Prebble and Mr Webb had come to sign a letter disclosing the amounts of VAT avoided during the period from 7 June 1991 until 22 January 1998. Mr Prebble's second reason for asking for a re-hearing was that he believed he had new evidence that would show that funds, not previously explained to the Customs, had been introduced into the business thereby enabling him to bank amounts that were greater than the stated takings of the business. Mr Prebble further pointed out that he had co-operated fully and that he had always disclosed the amounts that had been taken out of the till. In essence, he said, he had been too honest.
7. I cannot see that it would be proper to direct a further hearing of this matter so as to enable Mr Prebble to call his accountant with a view to questioning him on the two points that I have just identified. Mr Prebble had every opportunity to do that at the hearing on 12 December 2003. That hearing had followed the earlier hearing before the tribunal (at which the appellants had not been represented) following which a reasoned decision was published. Bearing in mind the weight that was placed on the advice of Mr Webb in the decision following the 2000 hearing, Mr Prebble could have obtained a witness summons to require Mr Webb to be present at the hearing in December 2003. He missed his opportunity. But even if Mr Webb had been present, he would, as Mr Prebble admitted, have been a hostile witness. The tribunal would still have been left with clear inconsistencies between the evidence of Mr Prebble and the evidence of Mr Webb. Moreover there would now be no point in calling the accountant to explain the circumstances of the deregistration in 1991. This is because the tribunal has already concluded that the deregistration did not amount to dishonest conduct on the part of the Appellant.
8. Mr Prebble did not specify the other matters that he would like to have adduced in evidence at the further hearing. Those other matters could and should have been put to and explained to the investigating officers in 1998 and dealt with in evidence in the course of the hearings of 2000 and December 2003. It is, I think, much too late now to introduce what appears to be an entirely extraneous explanation for the discrepancies discovered by the investigating officers. And I have to bear in mind that in 1998 Mr Prebble signed the statement of undeclared takings. For those reasons I do not think that it would be proper to direct a further hearing to hear evidence on either of the points put forward by Mr Prebble.
9. There is a third and fundamental objection to Mr Prebble's application. It is this. He was absent from the hearing that took place on 1 November 2005. At that hearing the tribunal was concerned only to explore the legal issues upon which it requested further argument. The reasons put forward by Mr Prebble at the present hearing for requesting a direction that there be a further hearing have nothing to do with the legal matters that were debated at the hearing on 1 November 2005. Had Mr Prebble challenged the legal conclusions reached by the tribunal and set out in their decision released on 9 November 2005, it might have been appropriate to have directed a further hearing to consider Mr Prebble's legal arguments. Mr Prebble's case in no way depends on the correctness or otherwise of the conclusions reached following the hearing at which he was absent. For that reason also I think it would not be appropriate to direct that this matter be re-heard.
10. The application is dismissed. For the record I confirm that the adjusted penalty is £6,844.90, based on the computations in paragraph 43 of the decision released on 9 November 2005.

STEPHEN OLIVER QC

CHAIRMAN

RELEASED: 18 August 2006

LON/98/1327