United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00452.html
Cite as: [2003] UKVAT(Excise) E452, [2003] UKVAT(Excise) E00452

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Crilly v Customs & Excise [2003] UKVAT(Excise) E00452 (28 July 2003)

Customs – Illicit importation of concealed cigarettes – Seizure of heavy goods vehicle – Restoration only upon payment of a fee – Application of policy by Customs – Review – Sections 49, 141 and 152 of CEMA 1979 – Section 16(4) Finance Act 1994 – Alleged breach of Article 1 of First Protocol to ECHR – Requirement of proportionality

BELFAST TRIBUNAL CENTRE

EUGENE CRILLY Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MR A F W DEVLIN (Chairman)

MR M McCLOY

Sitting in public in Belfast on 19 March 2003

Ms Jane McConnell of Counsel, for the Appellant

Mr J Puzey of Counsel, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

The Appeal

1. This is an appeal by Mr Eugene Michael Crilly ("the Appellant") against the decision of the Commissioners taken upon review contained in a letter dated 15 January 2002 confirming the earlier decision not to restore to the Appellant his seized Scania HGV tractor unit, except upon the payment of a restoration fee of £45,250.00. The appellant had sought restoration of the seized tractor unit by letter dated 13 September 2001. The Commissioners subsequently by letter dated 15 October 2001 had advised the Appellant that restoration of the seized vehicle would only be effected upon payment of the specified restoration fee. A request for a review of that decision was subsequently made on the Appellant's behalf by his Solicitors in a letter dated 30 November 2001.

The facts

2. From the evidence adduced before it, the Tribunal found the following facts. The Appellant is a self-employed road haulier, who first became involved in the road haulage industry in June 2001 or thereabouts. Previously, the Appellant had worked extensively in the construction industry, but had been forced to retire from that industry in September 1999 due to increasing physical disability. Subsequently, the Appellant decided to enter the road haulage business as a self-employed owner driver.
3. At Dover Eastern Docks on 12 September 2001 Customs officers stopped a white HGV Scania tractor unit registration number HLZ 9239 with a fridge trailer unit attached. The fridge trailer unit was No.LR112. The vehicle was being driven by the Appellant. At an examination bay, a commercial seal affixed to the fridge trailer was removed, and the doors were opened by the Appellant. When the trailer was searched, it was found by Customs officers to contain a total of 3.3 million cigarettes or thereabouts which had been imported into the United Kingdom with payment of duty. The trailer also contained a small amount of frozen fish.
4. The Appellant was asked to produce documentation for the load. He produced documentation which purported to relate to a consignment of frozen Greek sardines for delivery to Seabay Limited in Grimsby. The Appellant was asked whether he had seen the goods loaded into the trailer; he stated that he had not, and that there had been a trailer swop, in Brussels, by the roadside. The Appellant further stated that he had not been in the back of the trailer. The Appellant was then arrested on suspicion of evading excise duty and was formally cautioned. A search of the Appellant found him to be in possession inter alia of the following items: a quantity of UK and foreign coins, a quantity of Belgian notes, a manila envelope said to contain £1,000.00 in sterling notes, a British Airways baggage label in the name of Hughes, and a British Airways boarding pass in the name of a Mr P Hughes dated 30 August 2001.
5. Customs officers subsequently concluded that the tractor unit, the trailer and its contents were liable to forfeiture, and seized them accordingly.
6. In a letter dated 13 September 2001 the Appellant subsequent sought restoration of the Scania tractor unit. In that letter, the Appellant stated that he was the owner/driver of the tractor unit and asserted that he had been "… recruited to pull the trailer with no knowledge of its contents other than what was stated on the documentation given to me, as is normal". The Appellant furthermore pointed out that the tractor unit was his means of income and he requested a speedy decision with regard to its release. Customs replied by letter dated 19 October 2001 in which it was stated that reasonable checks would have made it clear that illicit goods were being carried and that on this occasion the vehicle would only be offered for restoration upon payment of the sum of £45,250.00. In this letter, the Appellant was advised of his entitlement to ask for a formal Departmental review. Subsequently, by letter dated 30 November 2001 the Appellant's Solicitors sought a review on his behalf. In that Solicitor's letter, it was stated as follows:

"On Tuesday 11 September he (the Appellant) had loaded car components in Belgium bound for Birmingham in his own trailer EMCT 37 for Doran Transport of Pomeroy. He had a call on his mobile from a person claiming to be Conor Lagan of Lagan Transport telling him he had got his number from Sean Doran and explaining he had a truck giving problems and the driver out of hours on his TACHO with a load of fish bound for Grimsby with a 5.00am deadline on Wednesday morning and would he for an additional fee of £500.00 switch trailers and deliver the Grimsby on time for the additional fee plus more importantly to his mind at that time was another contact for his infant business. He had no hesitation in agreeing to the job. He told him to contact him on his mobile, he was at this time on the E40 driving towards Calais, he stopped at the next service area around Ostend and waited for the Lagan Trailer which arrived at about three hours after him. He checked the trailer for tyres and general road worthiness, the fuel level in fridge motor and exchanged papers with the other driver who was driving an unmarked blue and white Scania 124 with a southern Ireland registration number. The driver was English. He did not ask his name nor who he was driving for, but he did confirm his truck had been giving problems with its fuel system, he did note that the fridge was sealed as the papers suggested it should and the trailer number was LR 112 which suggested to him it belonged to Lagan Transport. It then proceeded to Dunkerke and the ferry. On the ferry the person he knew as Conor Lagan rang to check on progress and make sure he would make Grimsby for 5.00am and he asked him to phone en route. As he exited the port of Dover Customs and Excise asked for his papers and ID which he produced. He was invited into an inspection bay which was not a problem apart from the loss of time as he was on a very tight schedule. When the officer informed him he was under arrest for carrying cigarettes it was the first inkling he had that anything was amiss.

On his release he rang the mobile number given to him to no avail. In the morning he rang Lagan Transport to be told he had not been hired by them nor did they own trailer LR 112. He rang Sean Doran to be told that he had not spoken to anyone from Lagan Transport nor did he give his phone number to anyone. These are the facts as he knows them. Who owned the trailer or the contents he has no idea. He doesn't know who phoned him claiming to be Conor Lagan other than he had a Northern Ireland accent and a mobile telephone that no longer works. His telephone number could have been obtained from anywhere as he freely gave it out at every opportunity to anyone in the haulage business. HM Customs and Excise contend that reasonable checks would have made it clear that illicit goods were being carried. Our client takes issue with this contention. The trailer being towed by him had been sealed in the county of origin. He did not have authority to break the seal and had he done so would undoubtedly have been in breach of regulations. In any case had he been able to break the seal his physical condition is such that he would not have been able to climb over the load contained in the lorry or break open any of the contents in it to check the same.

Against this background we invite you to undertake a reasonable review of the case. Our client's concern relates to the tractor unit HLZ 9239 only. The trailer and its contents are of no concern to him whatever".

7. The review was subsequently carried out by Ms Katherine Philpott, a Review Officer employed by Customs and based at Canterbury. Ms Philpott in her review decision dated 15 January 2002 reviewed the facts and circumstances of the interception, summarised the relevant applicable legislation and set out details of the Customs then current restoration policy in the following terms:

"The Commissioners' policy concerning the restoration of heavy goods vehicles changed on 16 July 2001. This new policy is designed to further tackle cross border smuggling and significantly disrupt the supply of excise goods to the illicit market. It also tackles hauliers who, whilst not actively involved in the importation of illicit excise goods, have not carried out reasonable checks that would have identified an illicit load.

Where the Commissioners have evidence that the driver and/or haulier are knowingly involved in smuggling excise goods, on the first detection the vehicle will be seized and not restored.

Where the Commissioners are not satisfied that the driver and/or haulier has carried out basic reasonable checks which would have identified the illicit load, the policy is that on the first occasion, the vehicle will be seized and restoration offered for a fee equal to 20% of the revenue evaded or the trade value of the vehicle, whichever is lesser. On the second detection, the vehicle is seized and not restored.

Where the driver and haulier have taken all reasonable steps to ensure the legitimacy of the load, the vehicle will be seized and restored free of charge".

8. Applying this policy to the facts and circumstances of the Appellant's case, the Review Officer went out to state the conclusions in the following terms:

"The cigarettes were not declared and had no accounting documentation. They were hidden amongst a load of sardines, which also did not have a legitimate destination. I am satisfied that they were the subject of a smuggling attempt, and as such were appropriately seized.

The seizure has not been challenged through the Courts and has become forfeit through the passage of time. The tractor and trailer unit were liable to forfeiture under Section 141 of CEMA 1979 for having transported the goods. I am satisfied that it was proper to seize them.

This then leaves the issue of restoration of the vehicle and whether the correct fee has been applied. Your client in essence took a telephone call from a person who asked him to switch trailers in another country and bring a different consignment back to the United Kingdom. Your client said that the person who made the telephone call claimed to be familiar with a mutual acquaintance of his.

Bearing in mind that your client had only recently become a haulier and that he did not actually know Conor Lagan I think that it would have been reasonable for him to make some checks regarding the authenticity of the call. Your client did no; he spoke to the other driver regarding the roadworthiness of his vehicle and satisfied himself that the trailer did belong to Lagan Transport because it bore the identification marks LR 112. In essence he took the turn of events on face value and made assumptions regarding the nature of the load. He did not telephone Sean Doran of Doran Transport (the person he was hauling the original consignment for) to verify that this arrangement would be agreeable to him. Nor did he telephone the company in Grimsby to make sure that the load was expected, especially when it is considered that the load was sealed and he had not examined it or witnessed its loading.

The whole business had been conducted in a very unorthodox manner and as such should have invited the closest scrutiny from a prudent haulier; it did not. Your client did not make the most fundamental checks; he did not ask the driver with whom he swopped loads his name or indeed for whom he worked. I do not think that your client made reasonable checks to confirm the legitimacy of the load.

I believe it is worthy of note that at the time of interception Mr Crilly told the officer that he swopped trailers in Brussels yet in your letter your state that it occurred in the Ostend area. The distance between Ostend and Brussels is some 70 miles or 1 to 1½ hours drive. I find it strange that your client would make such an error.

I am satisfied that in this set of circumstances, your client was correctly regarded as "innocent but blameworthy". I am also satisfied that the vehicle was properly offered to your client upon payment of the correct restoration fee.

The revenue evaded on the cigarettes was £448,249.00, 20% of this being £89,649.80. However, it was deemed that your client's vehicle was worth £45,250.00 according to the Glass' Guide Trade buying-in price.

I see no reason to disapply the policy in your client's case and I am satisfied that the restoration fee set was reasonable and equitable. For the reasons above I exercise my option to confirm the officer's decision, the tractor unit will be restored upon payment of £45,250.00".

The evidence of the Appellant

9. In his evidence to the Tribunal, the Appellant stated that he had only recently become involved in the road haulage business. Before the incident in question, he stated that he had only undertaken somewhere between five and seven trips abroad, and described himself as being relatively inexperienced. He stated that he had previously undertaken one trip abroad for Doran Haulage, the firm which had engaged his services on this occasion. The Appellant in his evidence told how he had set off from somewhere in Germany towards Birmingham with a load of car components. The Appellant stated that on his way from Germany he received a phone call on his mobile; the caller stated he was from Lagan Transport, and that they had an urgent load which needed to be delivered to Grimsby forthwith. The Appellant stated that the caller offered to take his non-urgent load to Birmingham in return for his delivering their urgent load of frozen fish to Grimsby. The Appellant claimed that he had been offered £500.00 additional payment in order to accept this arrangement. He described in his evidence how the switch over took place somewhere near Ostend, at a service station. The two drivers exchanged papers. The Appellant checked the road worthiness of the trailer he was accepting, but asked other questions. He explained that he did not inspect the load because it was sealed, being affixed with what he believed to be a proper Customs and Excise seal. The Appellant stated that he presumed the load had been properly sealed and inspected along the way, and he did not consider himself to be at liberty to open the seal or check the contents. In addition, the Appellant claimed that physically, by reason of his disability, he would not in any event have been able to climb into the trailer and check the load.
10. In his evidence, the Appellant went on to deal with his financial circumstances. He described how he had been adjudicated bankrupt in 1997 due to the failure of his construction business, and had been discharged from bankruptcy in 2000. Upon entering the haulage industry as an owner driver, he stated that he did not have the necessary resources to purchase a vehicle for himself. He stated that his brother-in-law had financed the purchase of the Scania tractor unit for him. This unit the Appellant stated had only covered 9,000 kilometres or thereabouts from new to the date of its seizure. The Appellant stated that the tractor unit had represented his only means of income, and that in the circumstance she was completely unable to pay the £4,250.00 imposed by Customs as a condition for its restoration.
11. Under cross-examination, the Appellant was referred to his earlier evidence-in-chief in which he had described himself as being the owner of the seized tractor unit, which he claimed he had purchased in June 2001 with financing from his brother-in-law. The Appellant was referred to the contents of the DVLNI registration book for the vehicle which specified the name of its first registered keeper to have been a Mr P J Hughes, and which specified the Appellant to have been the registered keeper only since 29 August 2001. In light of these particulars, the Appellant was asked to explain how he had claimed he had bought the vehicle in June 2001 with financing from his brother-in-law. He explained that Mr Hughes was his brother-in-law. He was asked why Mr Hughes would have registered himself as the keeper of the vehicle if all he was doing was to provide financing for its purchase. The Appellant offered no explanation. The Appellant was also asked to explain how it was that he had been found in possession of a baggage label relating to Mr Hughes, and of a boarding pass issued to Mr Hughes dates 30 August 2001. The Appellant offered no clear explanation. It was suggested to the Appellant that he had obtained these documents from Mr Hughes, whom he had met abroad and assisted to load the trailer with 3.3 million cigarettes. This the Appellant denied. The Appellant's attention was drawn to a discrepancy in his evidence as to where he alleged the change over of trailers had occurred. In his evidence to the Tribunal, the Appellant had claimed that the change over had taken place close to Ostend. On the date of the interception however, the Appellant had told Customs officers that the change over had taken place in Brussels. The Appellant could not explain the discrepancy. The Appellant was asked where his consignment of car components had been destined; he replied that they were destined for the Vauxhall plant outside Birmingham. The Appellant was asked who was taking your tractor together with the components on to Birmingham after the swop. The Appellant replied that it was the other driver. The Appellant was asked if before agreeing to undertake the swop arrangement, he had contacted Doran Transport to inform them as to what was proposed to take place. The Appellant claimed that he had tried to, but had not managed to contact Doran Transport until the next day. The Appellant accepted that he did not know and had not asked the name of the other driver, and additionally did not know and had not asked who he was working for. The Appellant was asked if he knew whether or not his consignment of car components had successfully made their way to Birmingham. The Appellant replied that they had. When the Appellant was asked to explain how or why he knew this, he stated that he had picked up the emptied trailer at Fishguard parked on a lay-by. When the Appellant was asked if he had ever checked that the load had got successful to Vauxhalls, he stated that he had never carried out such a check. When the Appellant was asked how or when or by whom he was told that the emptied trailer was at Fishguard, he stated that he could not remember. The Appellant was asked how he was going to get paid his additional £500.00 for undertaking the exchange of trailers. The Appellant responded by stating that he would have sent out an invoice to Lagan Transport. The Appellant was asked to explain why he had been found with £1,000.00 sterling cash in is possession in a manila envelope. The Appellant claimed that this was money he had taken with him to the continent for use as ready cash. The Appellant was asked how much he knew Conor Lagan. He replied that he did not know him, and that he had never dealt with either Conor Lagan or Lagan Transport before. The Appellant was asked did Conor Lagan exist. He replied that he assumed so, since he had heard people speaking of him. The Appellant was asked to explain why in the circumstances he would have trusted his trailer and the consignment which it contained to a man whom he did not know, and had never met before. The Appellant offered no explanation, but stated that he had perhaps been naïve. When the Appellant was asked to explain why he had not checked or examined the contents of the trailer, he replied that he did not consider it necessary to do so, that he did not believe himself entitled to break the seal, and that even if he had opened the rear doors of the trailer he would not by reason of his disability have been able to enter it and examine the contents of the load.

The evidence of the Respondent's witnesses

12. The Tribunal heard evidence from Mr Richard Blacklock and from Mr Stephen Myatt, Customs Officers based at Dover. Mr Blacklock confirmed that at the time of the initial interception, he had observed a seal attached to the trailer unit, which he confirmed had been intact. He described this as being a standard form of commercial metal seal which drivers frequently removed so as to enable them to check their loads. In cross-examination, Mr Blacklock readily accepted that after the interception had taken place, the Appellant co-operated fully with the investigations being carried out by Customs. Mr Myatt formally proved the contents of interview notes prepared as a result of post caution interviews carried out with the Appellant. Mr Myatt also described in detail to the Tribunal the method by which those persons loading the trailer had concealed cigarettes within the trailer, immediately being and underneath pallets and cartons containing frozen fish. Ms Philpott, the Review Officer also gave evidence on behalf of the Respondent. This witness confirmed that the basis for her decision on review was that the Appellant had not in her assessment carried out reasonable checks to confirm the legitimacy of the load being brought by him into the United Kingdom. In cross-examination Ms Philpott was asked as to whether in the undertaking of her review and in her arrival at a decision, she had taken into account the inexperience of the Appellant, his belief that he had no authority to break the seal at the rear of the trailer, or his adverse physical condition. The witness responded by insisting that she had taken into account all of the information which had been provided by the Appellant and by his Solicitors. Specifically, so far as the Appellant's inexperience was concerned, the witness did not accept that in the circumstances this would amount to an excuse in respect of his failure to carry out such checks upon the load as would have been reasonable. So far as the Appellant's physical disabilities were concerned, the witness stated that in her estimation any such disabilities made it all the more important for him to have checked the regularity of his load with Lagan Transport, or with the supposed consignee. This witness also confirmed that the revenue evaded on the cigarettes was £448,249.00, 20% of which was £89,649.80. In the present case, the sum demanded by Customs as a condition for the return of the vehicle was the sum equal to the trade value of the vehicle itself, namely £45,250.00.

The statutory framework

13. (a) The cigarettes which were found in the trailer attached to the Appellant's vehicle were subject to excise duty upon importation by virtue of Section 2(1) of the Tobacco Products Duty Act 1979.

(b) Section 49(1)(a)(i) of the Customs and Excise Management Act 1979 (CEMA) provides inter alia that where any imported goods, being goods chargeable on their importation with customs or excise duty, are without payment of that duty unshipped at any port those goods shall be liable to forfeiture.

c) Section 141(1)(a)&(B) of CEMA provides inter alia that where anything has become liable to forfeiture under the Customs and Excise Acts any vehicle which has been used for the carriage, handling or deposit of the thing so liable for forfeiture shall also be liable to forfeiture.

(d) Section 152(b) of CEMA provides that the Commissioners may as they see fit, restore, subject to such conditions, if any, as they think proper, anything forfeited or seized.

(e) This current appeal concerns an appeal from Ms Philpott's decision on review not to restore the seized vehicle to the Appellant, except upon payment of the sum of £45,250.00. The current appeal is available to the Appellant by virtue of certain provisions of the Finance Act 1994. Sections 14 to 16 of the Finance Act 1994 whenever read together with Schedule 5 to that Act provide for a two tier system of review and appeal of decisions including a decision whether to forfeit. Under Schedule 5 of the 1994 Act, a decision whether or not to forfeit a vehicle is deemed to be a decision "as to an ancillary matter".

(f) Section 16(4) of the Finance Act 1994 goes on to provide:

"In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that 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 to 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".

(g) For the tribunal therefore to be able to exercise in connection with the current appeal its powers under Section 16(4) of the Finance Act 1994, as outlined above, it must first be satisfied that the Commissioners or such other person as made the decision on review not to restore to the Appellant the seized vehicle except upon payment of the sum of £45,250.00 could not reasonably have arrived at that decision.

Submissions on behalf of the Appellant

14. The Appellant's submissions can be summarised as follows:

(a) On the facts of the case, it was contended that the Appellant had carried out reasonably checks from which it was not clear to him that illicit goods were being carried.

(b) It was contended that the decision on review only to restore to the Appellant his vehicle upon payment of the sum of £45,250.00 breached the Appellant's right to peaceful enjoyment of his property as provided for by Article 1 of the First Protocol to the European Convention on Human Rights.

(c) It was argued that on the facts of the case the Appellant's rights under Article 1 of the First protocol were engaged, Air Canada v United Kingdom (1995) 20 EHRR 150, and that the forfeiture of the Appellant's vehicle subject to the payment of a restoration fee constituted an unjustified interference with the Appellant's right to peaceful enjoyment of his property.

(d) Whilst the Appellant recognised that the Commissioners' policy was the pursuit of the general public interest insofar as its underlying aim was to combat the evasion and attempted evasion of excise duty, and whilst the Appellant further conceded that under Article 1 of the First Protocol the state was at liberty to control the use of property to secure the payment of taxes or other contributions or penalties, the Appellant nevertheless argued that the Commissioners' policy could not and did not satisfy the requirement of proportionality.

(e) The Commissioners' policy, it was argued, was disproportionate because it failed to take into account all relevant facts, and in particular: the fact that the Appellant had co-operated fully with customs officers in their investigations, the Appellant's inexperience in the haulage industry, the fact that the trailer was sealed and the Appellant believed he had no authority to break the seal, the fact that by reason of his disabilities even if the seal had been broken the Appellant would not have been physically able to inspect the load, and the Appellant's personal financial circumstances and his reliance upon the seized and forfeited vehicle as his sole means of income.

Submissions on behalf of the Respondents

15. The Respondent's submissions can be summarised as follows:

(a) The Respondent submitted that there was no evidence before the Tribunal to establish that the Appellant actually owned the vehicle which had been forfeited. It was submitted that if the Tribunal could not be satisfied as to the true ownership of the vehicle which the Appellant had sought to have restored to him, the appeal should fail ab initio.

(b) It was submitted that on the facts of the case, it simply could not be argued that the Appellant had carried out all reasonable steps to ensure the legitimacy of the load being imported into the United Kingdom.

(c) It was further submitted that even if the Tribunal were to arrive at a different conclusion on the facts to that arrived at on review, and if the Tribunal were to conclude that the Appellant had taken reasonable steps to ensure the legitimacy of the load, the Tribunal could still not conclude that the Commissioners' decision on review was one which could not reasonably have been arrived at in all the circumstances.

(d) That having regard to the amount of excise duty due on the illicitly imported cigarettes, and to the fact that the restoration fee had been assessed by reference to the estimated trade by-in price of the vehicle, it could not realistically be said that the level set for the restoration figure was disproportionate. In any event, it was contended, the Appellant had not on the evidence demonstrated any case of undue hardship.

Conclusions

16. Another Tribunal in Bowd v Customs and Excise Commissioners (1995) V&DR 212 when faced with a question as to reasonableness or otherwise of a decision not to restore seized goods, reviewed some of the decisions of the higher courts in their approach to the term "reasonably". In Bowd, the Tribunal said "In our view the word `reasonably' is to be construed in the wider sense viewed by Lord Greene MR in Associated Provincial Picture Houses Limited v Wednesbury Corporation (1948) 1 KB 223 when he stated at page 229:

"… a person entrusted with discretion must, so to speak, direct himself properly in law. He must call his own attention to the matter which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting `unreasonably'. Similarly, there may be something so absurd that no sensible person could ever dream that it may within the powers of the authority. Wattington LJ in Short v Poole Corporation (1926) Ch 66 gave the example of the red-haired teacher, dismissed because she had red hair. That is unreasonable in one sense. In another sense it is taking into consideration extraneous matters. It is so unreasonable that it might almost be described as being done in bad faith; and, in fact, all those thinks run into one another".

Similarly, Lord Lane in Customs and Excise Commissioners v J H Corbitt (Numismatists) Limited (1980) 2 WLR 653 at 663 described the method to be adopted by a tribunal in its approach to the review of the exercise of a discretion in the following terms:

"It could only properly [review the discretion] if it were shown that the Commissioners had acted in a way in which no reasonable panel of Commissioners could have acted; if they had taken into account some irrelevant or had disregarded something to which they should have given weight".

17. There can surely be no dispute as to the fact that the Commissioners are entitled to develop, maintain and apply policies relating to the restoration of heavy goods vehicles involved in the importation of illicit excise goods, such as here took place. As the President has already stated in Dereczenik v Customs and Excise Commissioners (Decision C138) at page 6:

"The Commissioners, in common with any other branch of the administration, are entitled to maintain policies. This course of action can only be impugned if the administration fetters the exercise of its own discretion by refusing to listen to an application for its discretion to be exercised in a manner that does not conform with the strict terms of the policy".

18. Clearly, the application by the Commissioners of their policy concerning the restoration of heavy goods vehicles involved in the importation of illicit excise goods may well in certain circumstances give rise to the question as to whether there has been a prima facie violation of the rights to property afforded protection by Article 1 of the First Protocol. In such circumstances, the question may well arise as to whether the interference with property rights caused by implementation of the policy of restoration has or has not been in conformity with the entitlement of the State under the second part of Article 1 of the First Protocol "to enforce such laws as it deems necessary to control the use of property in accordance with the general interest". In this regard, the Tribunal considers the proper approach for it to adopt to be that set out by the European Court of Human Rights at paragraph 36 of its judgment in Air Canada v United Kingdom (1995) 20 EHRR 150 at 173:

"According to the Court's well-established case law, the second paragraph of Article 1 must be construed in the light of the principle laid down in the Articles first sentence. Consequently, an interference must achieve a "fair balance" between the demands of the general interest of the community ad the requirements of the protection of the individual's fundamental rights. The concern to achieve this balance is reflected in the structure of Article 1 as a whole, including the second paragraph: there must therefore be a reasonable relationship of proportionality between the means employed and the aim pursued".

19. In the present case, therefore, the question arises as to whether the Commissioners' policy set out to achieve this "fair balance" between the demands of the general interest of the Community and the requirements of the protection of the individual's fundamental rights. It seems to the Tribunal that it does satisfy this requirement. The existence of a policy on restoration specifically designed to deal with the illicit importation of excise goods by means of heavy goods vehicles would appear to be fully justified. Where heavy goods vehicles are made use of for importation purposes, the quantities of illicit excise goods involved are likely to be substantial, as are the amounts of revenue being evaded. Opportunities for concealment within the vehicles themselves are also likely to be substantially greater than might otherwise be the case. The policy itself also correctly in our view sets out to create the proper distinction between (a) those instances where the Commissioners have evidence to indicate that the driver or haulier are knowingly involved in the smuggling of excise goods (b) those instances where there is evidence to suggest that the driver or haulier, although not knowingly involved in smuggling have nevertheless failed to carry out such basic reasonably checks upon their vehicle as would have enabled the illicit load to have been identified, and (c) those instances where the driver or haulier have taken all reasonable steps to ensure the legitimacy of the load. These various categories of illicit importations in our view warrant differential treatment in terms of a vehicle restoration policy, if the requirements of fairness and proportionality are to be satisfied. As the European Court of Human Rights emphasised at paragraph 54 of its judgment in AGOSI v United Kingdom (1986) 9 EHRR 1:

"The striking of a fair balance depends on many factors and the behaviour of the owner of the property, including the degree of fault or care which he has displayed, is one element of the entirety of circumstances which should be taken into account".

It has to be correct that a policy on restoration should draw the type of distinctions addressed in the Commissioners' policy. Wholly innocent drivers or hauliers, who have carried out al reasonable checks upon their vehicles to guard against the risk of the illicit importation of excise goods, yet whose vehicles are cynically made use of by the actions of others, should not be required to suffer a penalty in respect of the restoration of their vehicles. Similarly, it is surely correct that those hauliers or drivers who are involved in illegal smuggling activities should face the prospect of having their vehicles forfeited and not returned. Furthermore, it seems to us that part of its legitimate aims in the public interest, the State is able to impose by means of a restoration policy obligations of vigilance on drivers and hauliers, providing that the burdens imposed as a result are not excessive so as to enable the relationship of proportionality to remain between the means employed and the aim sought to be realised. The Commissioners' policy in the instant case seems to us to satisfy these requirements.

20. The Tribunal also accepts that on the facts of the case the best that can be said of the Appellant is that he demonstrably failed to carry out the most basic of checks upon the trailer which he accepted for delivery to the United Kingdom, such as would have enabled the illicit goods to have been detected. There were serious discrepancies in the story which the Appellant put forward: such as to where he had been travelling from when he received the unsolicited telephone call, and such as precisely where the exchange of trailers took place. The circumstances of the exchange of trailers were, it seems to us, highly suspicious, and even having regard to the Appellant's inexperience within the haulage industry, we find it difficult to accept that they would not have appeared suspicious to the Appellant at the time. The Appellant could have checked out the legitimacy of the operation which he was voluntarily embarking upon by telephoning Lagan Transport, or by telephoning Doran Transport, or by checking with the supposed consignee that they were indeed expecting delivery of the frozen fish which he had been asked to transport. The appellant chose to do none of these. We find it extremely surprising to note that the Appellant was, according to him, prepared without proper confirmation to hand over his own trailer, together with the valuable consignment of car parts which it apparently contained, to another driver whose name he did not know or ask for, whom he had never met before, and to whom he had not even bothered to ask the identity of his employer. Irrespective of how inexperienced the Appellant may have been, and irrespective of how much his physical disability may have prevented him from climbing into the back of the trailer or checking its contents himself, he could nevertheless in the Tribunal's assessment have carried out at least some of the basic common sense precautions outlined above. The Appellant however chose not to do so.
21. Nor does the Tribunal accept any suggestion that the Commissioners' decision on review should be called into question by reason of any alleged failure on their part to take into account the personal financial circumstances of the Appellant. Such considerations may very well be relevant considerations for the Commissioners to take into account, albeit arguably of less weight or significance than the actual behaviour of the Appellant himself and the degree of fault or carelessness which he may have displayed. However, in the present case, there is we conclude no evidence to suggest that the Commissioners on review failed to take into account information relating to the personal financial circumstances of the Appellant which was properly brought to their attention. The letter dated 30 November 2001 from the Appellant's Solicitors seeking the review contained effectively no information as to the current financial position of the Appellant, either as regards his sources of income, assets, current liabilities, if any, existing financial commitments or domestic circumstances. Nor was any such evidence adduced before the Tribunal at hearing. If the Appellant seeks to undermine the Commissioners' decision on review by alleging that they failed to take properly or adequately into account his individual financial circumstances, he must first ensure that either he or his representatives provide proper details of the same to the Commissioners at the time the review is being undertaken.
22. In any event, the Tribunal on the basis of the evidence adduced before it was far from satisfied that the Appellant was ever at any material time the true owner of the seized vehicle. Mr Hughes, claimed by the Appellant to be his brother-in-law, whom it was claimed had financed the purchase of the vehicle for the Appellant did not give evidence at the hearing. Nor was any documentation relating to the purchase of the vehicle made available to the Tribunal. Nor did the Tribunal learn of the precise nature of the financial relationship entered into as between the Appellant and Mr Hughes. Nor did the Tribunal receive any explanation as to why Mr Hughes should in June 2001 have had himself recorded as the first registered keeper of the vehicle, the Appellant only being registered as its keeper with effect as and from 29 August 2001.

Decision

23. In the present case, the amount of revenue evaded on the cigarettes was £448,249.00. Restoration of the seized vehicle was offered to the Appellant in return for a fee assessed at £45,250.00, being the trade by-in price assessed as per Glass' Guide. The Tribunal does not consider the Commissioners' policy nor its application to the facts of the present case to have been either disproportionate or otherwise unreasonable. For the reasons set out above, this appeal fails and is therefore dismissed. No application for costs was made at the conclusion of the hearing.

A F W DEVLIN

CHAIRMAN

RELEASED:

LON/02/8047