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United Kingdom VAT & Duties Tribunals (Customs) Decisions

You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Customs) Decisions >> Wickham v Revenue & Customs [2007] UKVAT(Customs) C00239 (07 June 2007)
URL: http://www.bailii.org/uk/cases/UKVAT/Customs/2007/C00239.html
Cite as: [2007] UKVAT(Customs) C00239, [2007] UKVAT(Customs) C239
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Keith Wickham v Revenue & Customs [2007] UKSPC (07 June 2007)
    C00239
    CUSTOMS DUTY – REPAYMENTS UNDER ARTICLE 239 – Appellant obtained disability relief on vehicle importation – the Appellant later sold the vehicle to a company – the Appellant contended that he relied on the advice of a Customs Officer that he could sell the vehicle without paying the customs duty if he sold it after six months from the date of importation – Tribunal satisfied that the Appellant formed the intention to sell before he received the advice – he sold the vehicle knowing the advice was wrong – Appeal Dismissed.

    MANCHESTER TRIBUNAL CENTRE

    KEITH WICKHAM Appellant

    - and -

    HER MAJESTY'S REVENUE and CUSTOMS Respondents

    Tribunal: MICHAEL TILDESLEY OBE (Chairman)

    Sitting in public in North Shields on 3 October 2006 and 10 April 2007

    The Appellant appeared in person

    Shaheen Rahman, counsel instructed by the Acting Solicitor for HM Revenue & Customs, for the Respondents

    © CROWN COPYRIGHT 2007

     
    DECISION
    Appeal
  1. The Appellant was appealing against the Respondents' demand for customs duty in the sum of £5,649.44 plus interest on the importation of a motor vehicle, a Chevrolet Super Sports Roadster Pickup, from the United States of America. The demand was confirmed on review dated 22 February 2006.

    2. The Disputed Issues
  2. The Appellant imported the motor vehicle from the United States on 2 November 2004 declaring a customs value of £25,679,29. After an initial dispute the Appellant successfully claimed relief from customs duty and VAT for the importation. The relief was granted on the ground that the car was designed and intended for a person with a disability, the Appellant. A condition of the disability relief was that the relief was lost in the event of the vehicle being subsequently lent, hired out or transferred to an able bodied person or an institution or organisation not promoting the interests of persons with disabilities.

  3. Following a visit from Mrs Kirton, HM Revenue and Customs Officer, on 18 July 2005, the Appellant sold the vehicle. The Respondents contended that the Appellant lost the benefit of the disability relief on the sale of the vehicle, and liable to pay the customs duty. The Appellant stated that he relied upon Mrs Kirton's advice when he sold the vehicle. Mrs Kirton advised him that the restrictions on the sale of the vehicle had lapsed. The Appellant submitted that he did not have to pay the customs duty because of Mrs Kirton's error.

  4. The Respondents accepted that Mrs Kirton gave incorrect advice to the Appellant but Mr Callaghan on 26 July 2005 corrected her error in a letter sent to the Appellant. The Respondents were of the view that the Appellant sold the vehicle after he received the letter from Mr Callaghan, in which case the Appellant was not entitled to rely on Mrs Kirton's error. In the alternative Mrs Kirton's error was not of sufficient substance to create a legitimate expectation on the part of the Appellant to merit the waiving of customs duty.

  5. The issues for determination were as follows:

    6. (1) Did the Appellant sell the vehicle in contravention of the conditions of disability relief?
    (2) Did the Appellant rely on Mrs Kirton's error when he sold the vehicle?
    (3) Was Mrs Kirton's error of sufficient substance to create a legitimate expectation on the part of the Appellant.
    The Law
  6. Articles 72 and 76 Council Regulation 918/83 EEC set out the grounds for disability relief from customs duty:

    7. "Articles specially designed for the education, employment or social advancement of physically or mentally handicapped persons other than blind persons shall be admitted free of import duties where: they are imported:

    - either by handicapped persons themselves for their own use,

    - or by institutions or organizations that are principally engaged in the education of or the provision of assistance to handicapped persons and are authorized by the competent authorities of the member states to receive such Articles duty-free (Article 72)

    Articles imported duty-free by the persons referred to in Articles 71, 72 and 74 may not be lent, hired out or transferred, whether for a consideration or free of charge, without prior notification thereof to the competent authorities. Should an Article be lent, hired out or transferred to a person, institution or organization entitled to benefit from relief
    pursuant to Articles 71 to 74, the relief shall continue to be granted provided the institution or organization uses the article for purposes which confer the right of such relief. In other cases, loan, hiring out or transfer shall be subject to prior payment of import duties, at the rate applying on the date of the loan, hiring out or transfer, on the basis of the type of goods or equipment and the customs value ascertained or accepted on that date by the competent authorities" (Article 76)."
  7. Article 239 of the Customs Code 2913/92 EEC enables customs duty to be remitted in accordance with committee procedure and where no deception or negligence may be attributed to the taxpayer:

    8. "1. Import duties or export duties may be repaid or remitted in situations other than those referred to in Articles 236, 237, and 238:
    • to be determined in accordance with the procedure of the committee;
    • resulting from circumstances in which no deception or obvious negligence may be attributed to the person concerned. The situations in which this provision may be applied and the procedures to be followed to that end shall be defined in accordance with the Committee procedure. Repayment or remission may be made subject to special conditions.
  8. Duties shall be repaid or remitted for the reasons set out in paragraph 1 upon submission of an application to the appropriate customs office within 12 months from the date on which the amount of the duties was communicated to the debtor.

    9. However, the customs authorities may permit this period to be exceeded in duly justified exceptional cases".
  9. Article 899 of Commission Regulation 2594/93 EEC sets out the procedure for remission of customs duty. Under article 899 the national customs authority can remit the duty owed if it is satisfied that a special situation exists where there has been no deception or obvious negligence on the part of the person concerned.

  10. Case law has established that errors on the part of customs authorities may amount to special situations. Article 220 of the Customs Code 2913/92/EEC provides the rationale for where an error on the part of a customs authority may amount to a special situation justifying the waiver of customs duty:

    11. "1. Where the amount of duty resulting from a customs debt has not been entered in the accounts in accordance with Articles 218 and 219 or has been entered in the accounts at a level lower than the amount legally owed, the amount of duty to be recovered or which remains to be recovered shall be entered in the accounts within two days of the date on which the customs authorities become aware of the situation and are in a position to calculate the amount legally owed and to determine the debtor (subsequent entry in the accounts). That time limit may be extended in accordance with Article 219.

    2. Except in the cases referred to in the second and third subparagraphs of Article 217 (1), subsequent entry in the accounts shall not occur where:
    (a) the original decision not to enter duty in the accounts or to enter it in the accounts at a figure less than the amount of duty legally owed was taken on the basis of general provisions invalidated at a later date by a court decision;
    (b) the amount of duty legally owed failed to be entered in the accounts as a result of an error on the part of the customs authorities which could not reasonably have been detected by the person liable for payment, the latter for his part having acted in good faith and complied with all the provisions laid down by the legislation in force as regards the customs declaration;
    (c) the provisions adopted in accordance with the committee procedure exempt the customs authority from the subsequent entry in the accounts of amounts of duty less than a certain figure".
  11. The Working Document: Judgement of the Court of First Instance dated 3 October 2006 sets out the principles established by case law for determining whether an error on the part of customs authorities is a special situation. Essentially an error constitutes a special situation when it is of sufficient substance to create a legitimate expectation on the part of the trader. In Halifax (Hampshire Christian Trust) v Revenue and Customs [2006] UKVAT (Customs) C00209 the Tribunal decided that non-binding advice on the telephone did not amount to a special situation.

  12. If the error is a special situation, the next hurdle to overcome is whether there has been deception or obvious negligence on the part of the trader. Deception applies when the trader has not supplied the full information to the customs authority. Obvious negligence applies where the error could have been detected by the trader, which is determined objectively on all the circumstances, in particular the complexity of the subject matter, the professional experience of the trader and the degree of care exercised.

    13. The Hearing
  13. The Tribunal heard evidence from the Appellant and Diane Evans, HM Revenue and Customs Officer, who carried out the review of the Respondents' decision to issue a demand notice for customs duty.

  14. The Respondents presented the Tribunal with a bundle of documents. The bundle was not, however, served upon the Appellant prior to the hearing by the Respondents. The Appellant indicated to the Tribunal that he was not familiar with the layout of the bundle but aware of the contents of the documents. In those circumstances he did not wish to have further time to examine the bundle or apply for an adjournment.

  15. The Appellant made a preliminary application for the Tribunal to allow the Appeal on the ground that Mrs Evans' review was fundamentally flawed because she did not consider all the correspondence relating to the disputed matter. The Tribunal refused the application because it was not considering the reasonableness of Mrs Evans' review. Under section 16(5) of the Finance Act 1994 the Tribunal has power on Appeal to quash or vary the disputed decision demanding customs duty, in which case the Tribunal was not primarily concerned with the process by which Mrs Evans arrived at her decision. The Tribunal was entitled to examine the whole evidence and arrive at its own conclusion about whether the demand for customs duty was factually and legally correct.

  16. At the end of the hearing I directed the Respondents to supply written submissions with the Appellant having a right of reply on the following issues:

    17. (1) Upon whether the Tribunal has jurisdiction to deal with the interest separately from the duty due, and if the Tribunal has jurisdiction to advise on the amount of interest due.
    (2) Upon whether there are any circumstances in which oral advice can amount to an error within Article 220 of the Customs Code.
  17. The Respondents attached a substantial bundle of authorities with their concise and clear submission. The Appellant did not exercise his right of reply by the due date. The Tribunal, however, decided to give the Appellant a right of reply in person because he was unrepresented and may have been disadvantaged by the substantial bundle supplied by the Appellant.

  18. It was not possible to arrange a hearing until 10 April 2007. The original Tribunal included a member, Mrs Pollard, who was unable to attend the resumed hearing. As I have jurisdiction to deal with the Appeal on my own under paragraph 5(1) schedule 12 VATA 1994, the Appellant was asked prior to the hearing whether he objected to me sitting alone. The Appellant agreed for me to determine the Appeal which he confirmed at the hearing. The Respondents raised no objections to the re-constitution of the Tribunal.

  19. At the adjourned hearing I explained its purpose which was to give the Appellant an opportunity to respond to the Respondents' further submissions. I requested Ms Rahman to go through her submission. I offered to explain to the Appellant any particular point in the Respondents' submission which he did not understand. The Appellant did not require my assistance. The Appellant pointed out that the Respondents had supplied additional information on negligence which had not been directed by the Tribunal. He asked the Tribunal to exclude that part of the written submission. I have decided not to exclude it because the additional information was simply case reports not new evidence. The Appellant submitted that the wrong advice given by Mrs Kirton amounted to a special situation, and that all times he followed the advice given in HM Revenue and Customs Notice 371. He considered that if he was successful with his Appeal the Respondents should remit the duty paid with the same rate of interest levied by the Respondents on debts owed to them.

    20. The Facts
  20. On 2 November 2004 the Appellant imported a Chevrolet Pick Up from the United States of America. The Appellant applied to import the vehicle without VAT and customs duty in accordance with the requirements of Respondents' Notices 371 and 701/7 which provided relief for articles adapted for persons with disabilities. The Appellant submitted that the vehicle was for his own use and had been adapted for the needs of a person with disabilities. The Appellant held a "Certificate of Entitlement to Disability Living Allowance". The vehicle was an open pick-up which had a number of features ideally suited for use by a person with disabilities. Also the Appellant had required specific adaptations of the vehicle to ensure the secure retention of wheelchairs carried in the cargo area of the vehicle.

  21. Originally the Respondents disputed the Appellant's claim for disability relief from VAT and customs duty on the importation of the vehicle, on the ground that the vehicle was not specifically adapted for the needs of persons with disabilities. However, following a departmental review on 15 December 2004 the Respondents conceded the Appellant's claim for relief which resulted in the reimbursement of the VAT and customs duty paid by the Appellant and the issue of a "Relief Certificate". The value of the imported vehicle was declared at £25,679.29.

  22. The "Relief Certificate" was dated 2 November 2004 and covered the importation of one Chevrolet Pick Up. The "Certificate" contained the following notes:

    23. (1) This certificate was valid for six months from date of issue. It authorised the import of the above goods free of customs duty.
    (2) This certificate must be presented to Customs at time of import.
    (3) The goods may be checked by Customs either at the time of import or at a later date to ensure the conditions for relief set out in Notice 371 have been met. False information can lead to payment of customs import charges and even forfeiture of goods.
    (4) The goods may not be lent, hired or transferred without prior consent from NIRU.
    (5) Further details available in Notice 371.
  23. Notice 371 informs persons about how they can import goods specifically designed for the education, scientific or cultural advancement of disabled people from outside the Customs Union free of duty and VAT. The Notice does not have the force of law and is, therefore, advisory. Under paragraph 2.4, which is headed; "Is there any restriction on the use and disposal of the goods"?; the following advice is proffered:

    24. "If you are a disabled person, the goods you must import must be for your own use. If you intend to dispose of the goods at a later date, duty (but not VAT) may be payable depending on the circumstances. Seek advice from our National Advice Service first".
  24. Around April 2005 the Respondents became aware that the Chevrolet Pick Up had been advertised for sale in the "sports and performance cars" section of the "Autotrader" magazine (3 – 9 February 2005 edition) for £36,500 or nearest offer. Further enquiries revealed that the vehicle had also been advertised for £32,000 plus VAT on the website of "OKW American Imports" which was a joint venture between the Appellant and his son involving the import of prestige American cars for resale. The Chevrolet Pick Up was the subject of a cover story in the Spring 2005 edition of "The Valley", a trade publication devoted to the activities of the Team Valley Trading Estate.

  25. The "Autotrader" advert and the "OKW" website offered for sale a brand new Chevrolet SSR, slingshot yellow, UK registered with no specific reference to the adaptations for persons with disabilities. "The Valley" cover story mentioned that the expected annual turnover for "OKW Cars" was £1 million from the projected sale of 16 cars. The article referred to the Chevrolet as "Oliver's (the Appellant's son) first car which was expected to sell for around £37,000 plus VAT".

  26. The Appellant agreed that the Autotrader" advert, the "OKW" website and "The Valley" cover story featured his Chevrolet Pick Up imported on 2 November 2004. He expressed the view that his son was simply using the photograph to generate interest in sales of similar vehicles. The Appellant, however, accepted that he would have sold the vehicle at the time of the adverts if he had received the right offer.

  27. On 5 July 2005 Mrs Lois Kirton of the Respondents arranged an appointment with the Appellant on 18 July 2005 at his office to discuss the situation of the Chevrolet Pick Up. At that meeting Mrs Kirton expressed the view that the condition attached to the "Relief Certificate" dealing with the sale of the vehicle lapsed after six months from its date of issue, enabling the Appellant to transfer ownership of the vehicle without losing the relief from customs duty.

  28. On 26 July 2005 Mr Callaghan of the Respondents' National Import Reliefs Unit wrote to the Appellant correcting the error made by Mrs Kirton:

    29. "May I remind you that if the vehicle is sold onto an able bodied person, the duty of £5,649.44 which was originally relieved will become payable. A sale by you as a private individual will result in the call for duty but not VAT usually based on the value of the vehicle at the time of transfer. There is no end period for this restriction which can only be lifted by payment of duty.
    Our note 1 on the duty certificate means that the certificate must be presented to Customs to allow duty relief at import within six months of the date of issue and does not infer that the period of restriction will end after six months.
    If a change in ownership does take place, please contact me at this office and we will arrange for the issue of the duty bill".
  29. On 4 August 2005 the Appellant responded to Mr Callaghan's letter. Amongst other matters the Appellant stated that

    30. "My assumption was that Mrs Kirton wished to resolve the saga of HMCE maladministration which accompanied the import of this vehicle, causing me delays, cost and loss of property.
    It was therefore very valid to meet an authorised officer of HMCE who would have knowledge and authority of the issue that could be relied on. In the event there appeared to be confusion on behalf of HMCE that the transfer of my own personalised registration plate to the Chevrolet may in some way prejudice the position of HMCE, whatever, that position might be. However, I accept the authority of Mrs Kirton that this is not the case.
    Discussion then turned to the Duty Relief Certificate. Mrs Kirton referred to item 1 on the blank copy certificate that she had bought. She authoritatively interpreted item 1 as being the ruling that goods imported under this privilege must be retained for six months before the liability to repay any duty expired.
    Despite this being an irrelevant and academic point as far as this matter is concerned the point was discussed intently, the marked up document from Mrs Kirton retained and her authority accepted.
    I now note that subsequent to the visit of Mrs Kirton, the third paragraph of your letter proposes a different interpretation of Item 1.
    Clearly, should I wish to do so, I am entitled to rely and act in good faith on the ruling of Mrs Kirton, given the documentation available to her through HMCE, and the considerable efforts that she went to in this matter.
    Also I note the carefully worded statement in paragraph 2 of your letter with regards to the sale to an able bodied person.
    However as far as I am concerned the whole issue is theoretical and academic. I am now expecting to be away for a considerable period of time, so if further correspondence is considered necessary it will be sometime before I will be in a position to reply".
  30. The Appellant accepted that his letter of 4 August 2005 did not mention the sale of the Chevrolet Pick Up. The Appellant acknowledged that he could have sent a better letter.

  31. On 3 January 2006 Mr Callaghan wrote to the Appellant advising him that DVLA notified the Respondents that the Chevrolet Pick Up had been sold to Plates R Us Co. Ltd on 11 October 2005. In those circumstances Mr Callaghan issued a demand for the duty relieved of £5,649.44.

  32. The Appellant requested a formal review of the decision to demand customs duty. Mrs Evans conducted the review on 22 February 2006. Mrs Evans acknowledged that it was unfortunate that Mrs Kirton did not fully understand the notes at the bottom of the "Relief Certificate". However, Mrs Evans was of the view that note 1 to the "Certificate" related to the time period in which to import the vehicle not to when restrictions on sale could be lifted. Mrs Evans was concerned solely with the lawfulness of the post clearance demand for customs duty. Mrs Evans did not consider that the documentation concerning the original refusal of disability relief was relevant to the issue under review. Mrs Evans concluded that the post clearance demand was correct and that the debt for duty was due. The legislation, in her opinion, was specific in that goods which have been imported duty free by disabled persons may not be transferred to others who were not entitled to the relief without payment of the required import duty.

  33. On 13 March 2006 the Appellant appealed against the Respondents' decision demanding payment of customs duty.

  34. On 11 May 2006 a pre-hearing review was held where the Appellant was directed to indicate within two weeks of release of the directions whether and to what extent he agreed with the Respondents' description in their statement of case of the relevant facts of the appeal, with particular reference to the date of sale of the vehicle to Plates-R-Us and when he received Mr Callaghan's letter of 26 July 2005.

  35. The Appellant's response to the directions issued on 11 May 2006 did not specify the date when he sold the vehicle or the date he received Mr Callaghan's letter. Instead the Appellant stated that he received Mr Callaghan's letter which was sent second class delivery, by which time the vehicle was all intents and purposes sold.

  36. The Respondents' statement of case referred to a date of sale of 1 August 2005 which was recorded on the UK Registration Certificate for the vehicle. The declaration signed by the registered and new keeper was, however, dated 11 October 2005. The certificate recorded Gate 7 as the registered keeper and Plates R Us Ltd as the new keeper

  37. At the hearing the Appellant contended that the signature of the registered keeper on the Certificate was not his. The Appellant explained to the Tribunal that he had previously sold the vehicle to Gate 7 Limited. The Tribunal requested the Appellant to provide proof of the sale. During the lunch recess the Appellant obtained a letter with a "Gate 7" letterhead signed by John Reay, director of the said company, which stated that

    38. "I can confirm that Gate 7 Limited purchased a Chevrolet SSR (Chassis number 1GCE514P44B109617) from Keith Wickham on 29 July 2005 for the sum of £15,000".
  38. The Appellant confirmed that Gate 7 Limited engaged him as a consultant for two days a week. The Appellant accepted that he held business cards which recorded him as the Managing Director for Gate 7 Limited. The Appellant asserted that the position of Managing Director was an honorary position. Although he could not be certain, the Appellant believed he was not registered with Companies House as a director of Gate 7 Limited.

  39. The Appellant considered that the Respondents had been obstructive and unhelpful. The Appellant formed the view that the Respondents were investigating his business affairs. The Appellant stated that initially he intended to keep and use the Chevrolet Pick Up but in view of the Respondents' behaviour he decided to dispose of the vehicle at the end of July.

    40. The Reasons for Our Decision
  40. In paragraph 5 I identified three issues to be determined, which will be dealt with sequentially.

    41. Did the Appellant sell the vehicle in contravention of the conditions of disability relief?
  41. The Appellant contended that as the vehicle had been sold to a limited company he did not contravene the conditions for disability relief. The Appellant relied on the wording of Mr Callaghan's letter dated 26 July 2005 about a sale to an able bodied person. The Appellant suggested that the term "able bodied person" did not extend to a limited company.

  42. This issue is to be determined by the wording of the relevant legislation, Article 76 of Council Regulation 918/93/EEC. The question whether Mr Callaghan's letter amounted to a misdirection was an entirely separate issue, which will be considered later.

  43. Article 76 provides that

    44. "Should an Article be lent, hired out or transferred to a person, institution or organization entitled to benefit from relief pursuant to Articles 71 to 74, the relief shall continue to be
    granted provided the institution or organization uses the article for purposes which confer the right of such relief. In other cases, loan, hiring out or transfer shall be subject to prior payment of import duties, at the rate applying on the date of the loan, hiring out or transfer, on the basis of the type of goods or equipment and the customs value ascertained or accepted on that date by the competent authorities".
  44. Article 76 covers persons, institutions and organisations which embrace both natural persons and legal persons, such as limited companies. Thus where the sale is to an organisation which is not connected with the needs of disabled persons, the disability relief is lost and the customs duty becomes due. The Appellant produced no evidence that either Gate 7 Limited or Plates R Us Limited were organisations principally engaged in the education of or the provision of assistance to disabled persons and that they were authorized by the Respondents to receive articles for disabled persons duty-free. In those circumstances I am satisfied that the Appellant's sale of the vehicle to either Gate 7 Limited or Plates R Us Limited was caught by the provisions of Article 76 with the result that he was liable to pay the customs duty demanded.

    45. Did the Appellant rely on Mrs Kirton's error when he sold the vehicle?
  45. The second issue goes to the heart of the dispute between the Appellant and the Respondents. Essentially the Appellant contended that he relied on Mrs Kirton's error when he sold the vehicle. He was, therefore, entitled to rely on Mrs Kirton's advice and avoid payment of the customs duty. The Appellant considered that Mrs Kirton was of sufficient stature to give authoritative advice which bound the Respondents.

  46. The Respondents' accepted that Mrs Kirton gave incorrect advice to the Appellant. However, they submitted that the Appellant could only avoid payment of the duty, if he could satisfy the Tribunal on the balance of probabilities that his assertion was factually correct and that he met the legal requirements of Article 239 of the Customs Code (2454/93). Article 239 enables the repayment of customs duty where there is a special situation which resulted from circumstances in which no deception or obvious negligence may be attributed to the Appellant.

  47. The second issue is concerned with the factual correctness of the Appellant's contention. If I find in favour of the Appellant in respect of the facts, then I am required to consider whether those facts satisfy the legal requirements of Article 239 which is the third issue identified in paragraph 5 above.

  48. I consider that there are two essential findings of fact which would determine the factual correctness of the Appellant's submission, namely:

    49. (1) When did the Appellant form his intention to sell the vehicle?
    (2) When did the Appellant sell the vehicle?
  49. The Appellant argued that he had no intention to sell the vehicle until after Mrs Kirton's visit when he realised the extent of the Respondents' interest in his business affairs. Further he sold the vehicle following her advice and before her error was corrected by Mr Callaghan's letter of 26 July 2005.

  50. I found the Appellant's evidence on intention and date of sale unconvincing and contradictory. The Autotrader advert and the entry on the OKW website were compelling evidence that the Appellant held a settled intention to sell the vehicle at least five months prior to Mrs Kirton's visit. The Appellant attempted to downplay the significance of the adverts by suggesting that his vehicle was only being used to prompt interest in sales of other vehicles yet to be imported from the United States. However, his explanation was contradicted by his evidence that he would have sold the vehicle had the right offer come along. Also the Appellant's explanation did not cover satisfactorily why the description in the adverts corresponded exactly with his vehicle including the colour of slingshot yellow.

  51. I consider that the evidence of the adverts and the Appellant's own admission about selling the vehicle significantly outweighed the Appellant's bald statement that he never intended to sell the vehicle until after Mrs Kirton's visit. I find that the Appellant formed a settled intention to sell the vehicle by no later than February 2005, at least five months before Mrs Kirton's visit.

  52. The Appellant gave evidence at the hearing that he sold the vehicle on 27 July 2005 to Gate 7 Limited for £15,000. I find it highly improbable that he would sell the vehicle at £10,000 less than the declared import value of £25,000. Further I find it incomprehensible that the Appellant did not mention that he sold the car to Gate 7 in his letter of 4 August 2005 to Mr Callaghan and in his response to the Tribunal directions of 11 May 2006. In his 4 August 2005 letter he made no reference to the sale of the vehicle. His response to the Tribunal directions contained the vague formula that for all intents and purposes the vehicle was sold at the time he received Mr Callaghan's letter. The details on the UK Registration Certificate for the vehicle also contained inconsistencies about the sale. The certificate recorded the date of the sale as the 1 August 2005 but the declarations were not signed until 11 October 2005.

  53. I place no weight on the Appellant's evidence that he sold the vehicle to Gate 7 Limited on 27 July 2005. I am satisfied that the Appellant's failure to mention the sale in his 4 August 2005 letter was not an oversight, which suggests that he sold the vehicle sometime after sending the letter. In that letter the Appellant told Mr Callaghan that he would be away for a considerable period of time which would tally with the date of declaration on the UK Registration Certificate. Thus I find that the Appellant sold the vehicle to Plates R Us Limited on a date after 4 August 2005, probably the 11 October 2005, the date of declaration.

  54. To summarise I find that

    55. (1) The Appellant formed a settled intention to sell the vehicle no later than February 2005, some five months prior to Mrs Kirton's visit.
    (2) The Appellant sold the vehicle to Plates R Us Limited on a date after 4 August 2005, probably the 11 October 2005, the date of declaration.
    (3) When the Appellant sold the vehicle he knew that Mrs Kirton's advice was wrong because he was in receipt of Mr Callaghan's letter.
  55. In view of the above findings, I find that the Appellant did not rely upon Mrs Kirton's error when he sold the Chevrolet Pick Up. At the time of the sale of the vehicle the Appellant knew that Mrs Kirton's advice was incorrect.

    56. Was Mrs Kirton's error of sufficient substance to create a legitimate expectation on the part of the Appellant?
  56. Determination of this issue has been rendered academic in view of my finding that the Appellant's sale of the Chevrolet Pick Up had no relationship with Mrs Kirton's advice. If I had been required to consider this issue I would have agreed with the Respondents' submissions that Mrs Kirton's error did not amount to a special situation necessary to invoke the relief under Article 239 of the Code. The subject matter of her advice was straightforward, the accuracy of which could have been easily checked. Mrs Kirton gave her advice orally, which was not binding upon the Respondents.

  57. The Appellant implied in his submission that if he was unsuccessful with the main ground of his Appeal, reliance on Mrs Kirton's advice, he was somehow misled by Mr Callaghan's reference to a sale to an able bodied person. The Appellant used Mr Callaghan's 26 July 2005 letter to justify his argument that a sale to a limited company was not caught by the provisions requiring payment of customs duty on the subsequent sale of the article which attracted disability relief on importation. I consider that the Appellant's implication was without merit. I am satisfied that Mr Callaghan's reference to an able bodied person included a limited company, and was not capable of constituting a misdirection.

  58. Even if I am wrong on the misdirection point the Appellant would still have to establish that he acted on Mr Callaghan's advice without deception or obvious negligence on his part. I am satisfied that the Appellant in his dealings with Mr Callaghan was at the very least negligent. The Appellant fully understood the contents of Mr Callaghan's letter. Instead of asking Mr Callaghan the simple question of whether a sale to a limited company would be outside the legal requirement to pay the duty; the Appellant chose to be clever rather than straightforward. The Appellant said in his 4 August 2005 letter:

    59. "Also I note the carefully worded statement in paragraph 2 of your letter with regards to the sale to an able bodied person".
    My Decision
  59. I find that

    60. (1) The Appellant's sale of the vehicle to Plates R Us Limited was caught by the provisions of Article 76, with the result that he was liable to pay the customs duty demanded.
    (2) The Appellant did not rely upon Mrs Kirton's error when he sold the Chevrolet Pick Up. At the time of the sale of the vehicle the Appellant knew that Mrs Kirton's advice was incorrect.
    (3) Mr Callaghan's reference to an able bodied person included a limited company, and was not capable of constituting a misdirection.
  60. I dismiss the Appeal and make no order for costs.

    61. MICHAEL TILDESLEY OBE
    CHAIRMAN
    RELEASE DATE: 7 June 2007

    MAN/06/7010

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