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United Kingdom VAT & Duties Tribunals (Excise) Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Shabani v Customs & Excise [2003] UKVAT(Excise) E00482 (29 August 2003)
URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2003/E00482.html
Cite as: [2003] UKVAT(Excise) E482, [2003] UKVAT(Excise) E00482
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- In this case the appellant has made oral application by his solicitor at the hearing of the appeal for the tribunal to take account in the appellant's favour of delay which it is alleged has taken place in the progressing of the appeal to a hearing. The appellant submits that the alleged delay has infringed his human rights. Specifically he submits that the appeal hearing in this case is not taking place within a reasonable time, as required by art 6(1) of the Human Rights Convention, so that the proceedings are unfair.
- The European Court of Human Rights ("the ECHR") has decided that the imposition of a penalty under s 60 of the Value Added Tax Act 1994 ("the Act") is not in itself a breach of the Human Rights Convention: M & A Georgiou v UK [2001] STC 80. One of the assessments under appeal in the present case is in relation to a penalty of that kind. According to the Georgiou decision, in principle there might be unfairness if proceedings challenging penalties pursuant to s 60 of the Act take too long. In that case, however, the ECHR was not of the view that the length of time that the case had taken gave rise to injustice or indeed the appearance of unfairness. That was a case which had taken a record length of time to resolve, but the duration of the proceedings was justified by the complexity of the case.
- The appellant in the present case submits that there is no good reason why his case has taken so long to come to a hearing. It is common ground that there are two main reasons accounting for the time taken to arrive at the hearing in this case, namely (1) the time taken by the Commissioners of Customs and Excise ("Customs") to get to the point where the assessments under appeal were perceived to be justified; and (2) what we shall call the Han and Yau reason.
- In the case of C & E Comrs v G K Han and D Yau [2001] STC 1188, the Court of Appeal categorised proceedings challenging penalties pursuant to s 60 of the Act as proceedings concerning criminal charges within the meaning of art 6(1).
- In 2000/01, there was a hiatus in the progression of such appeals whilst the tribunal, and subsequently the Court of Appeal, determined the human rights status of these cases for the purposes of that article of the Convention. The tribunal centre issued "Han and Yau letters" offering parties to such cases a choice – either to accept a standover of their appeal pending the resolution of the Han and Yau case; or alternatively to carry forward their case to an early hearing nonetheless. "Han and Yau letters" were sent to the parties in the present case.
- Neither party requested a hearing in the present case notwithstanding Han and Yau. They were content that there should be a standover. However the standover has resulted in the hearing in the present case happening considerably later than would probably have been the case otherwise. The appellant submits that, considering the whole history of this case, the overall length of time taken for the appeal to come to a hearing has been excessive and is unfair to the appellant.
- For the purposes of this decision, we have prepared and incorporate as Appendix 1 a Chronology of the history of the appeal. The period between 21 October 1997 and 13 December 1999 constitutes the time taken by Customs to investigate the appellant's circumstances and issue assessments. The period between 14 January 2000 and 24 November 2000 relates to the progression of the appeal at a time when it was unaffected by the Han and Yau reason. The period since then has been coloured by Han and Yau.
- Counsel for Customs submits that the period of investigation prior to 13 December 1999 is unremarkable in the context of delay. We agree. Customs are, or should be, conscious of the time-limits for assessments prescribed in s 77 of the Act. It is always open to an appellant to take at the substantive hearing of the appeal the point, if available, that assessments are statute-barred. There is nothing to suggest to us in the present case that there is anything out of the ordinary in the two years or so taken by Customs to get to the point at which assessments were thought to be justified.
- Despite the fact that both parties sought extensions of time during the year 2000, within the first year after the issue of the appeal, it is apparent that the appeal was not progressing as fast as it might have done. However at that time, the overall delay was not excessive. Moreover the prospect of an early hearing was overtaken by the Han and Yau reason, before the year was out.
- The tribunal decision took only a month to appear, following the sending of "Han and Yau letters". However Customs then applied for a continuing standover, pending the Court of Appeal decision in that case. That application was not opposed. Nor did the appellant, at any stage, seek to cut short any delay in having his appeal heard.
- Thus far – to early 2001 – the overall delay remained, in our opinion, fair and reasonable. One would then both have expected and have wished a substantive appeal hearing to have taken place during 2001. In our opinion, the Han and Yau reason adequately accounted for that not happening.
- The decision became available in July 2001. The tribunal centre then appears to have acted with reasonable expedition in fixing a preliminary hearing, which took place on 21 October 2001. We note that both parties' representatives attended that appointment, and that it is not recited in the resulting direction that either party sought an expedited substantive hearing.
- We find that there were then delays in fixing dates for the substantive hearing of the appeal. We need to take account of the fact that there was, to our own knowledge, a backlog of cases affected by Han and Yau standovers awaiting a substantive hearing. In view of that, it was not unreasonable, in our opinion, for a date for a substantive hearing not to have been notified until 12 March 2002, the hearing date being 29 May 2002.
- We need now to consider the appellant's submission that the tribunal should have offered to appellants improved facilities to overcome the problems caused by Han and Yau standovers. This submission is based upon Zimmerman and Steiner v Switzerland (1983) 6 EHRR 17. The ECHR said this, in paragraph 29 of its judgment in that case:
- We understand the law to be that, structurally, a contracting state's legal system must be adapted or adaptable to cope with the stresses and strains of increased workloads, but that "temporary backlogs of business" – this would include a build-up of work by reason of a matter such as the Han and Yau reason – are tolerable, so long as the structure promptly addresses and rectifies the backlog.
- Indeed, in the first of the cases cited in the Zimmerman case, namely Buchholz v Germany (1981) 3 EHRR 597, the ECHR had stated, at paragraph 51:
- As we see it, the question therefore becomes: what steps did the system take, following the appearance of the decision in Han and Yau, to deal with the backlog of standovers?
- We have no general evidence of this, but we do have the evidence of what happened in this particular case. We note that neither party was happy with the hearing date of 29 May 2002, so the hearing was postponed. After the postponement, however, it appears that the tribunal centre did not fix a substitute date until 1 November 2002, when it notified 10 & 11 March 2003 as the dates for hearing.
- The reason for this appears to us to be that the tribunal centre had contacted each of the parties for an indication of inconvenient hearing dates, the intention, no doubt, being that the centre would in eventually fixing the hearing date avoid those inconvenient dates. In principle, that is a perfectly reasonable and understandable course to adopt. However in this case, in practice, it resulted in no further hearing date being offered in 2002.
- We agree with the appellant's solicitor when he submits that that result was unreasonable. It was also prima facie unreasonable, as we see it, for the tribunal centre of its own motion to vacate the dates of 10 & 11 March 2003 at hardly any notice and not relist the appeal for hearing until August 2003 – although there may have been a reasonable explanation for this of which we are ignorant.
- What one might reasonably have expected in this case, we feel, was a hearing date in Autumn 2002 or thereabouts for this appeal.
- Overall this matter has taken some 3 years 7 months to come to hearing, disregarding the period prior to the issue of the notice of appeal, amounting to a further 2 years 3 months or so. The final 9 months or so, in the context of the total time taken, did in our view prima facie amount to unfair delay within the meaning of art 6(1).
- It may be that what the ECHR terms "remedial action" to deal with the Han and Yau standover situation was indeed adopted, and that nonetheless the delay we have observed came about. We have made this decision an interim decision because we consider that we need information on that score before finally deciding upon the effect of delay on these proceedings. That information may well, in the light of the authorities quoted, lead us to the conclusion that the delay demonstrated does not, after all, amount to an infringement of the appellant's human rights.
- We therefore propose to revisit the question of delay in our final decision in this appeal. We have reserved the appeal to ourselves for future consideration. We look to the parties to provide the tribunal with evidence, one way or the other, as to the nature and extent of any "remedial action" that may have been taken to address the "temporary backlog of business" to which Han and Yau standovers generally gave rise; also as to the apparent delays in fixing a hearing date in this particular case.
- We will also require further assistance as to how we should reflect any final ruling in favour of the appellant on this issue in our decision. Ours is, of course, a tribunal of statute, interpreting and applying legislation. It appears to us that s 3 of the Human Rights Act 1998 applies to us, but that, having regard to s 3(2)(b), there may be no scope in practice for us to give effect to our findings on delay, beyond recording what these are.
- Finally, counsel for Customs submits that the appellant has not been prejudiced by any delay. We are not persuaded that the delay will make for an unfair hearing of the appeal in evidential terms. We accept counsel's submission that the evidence normally presented to the tribunal in this kind of case is unlikely to be affected by any finding as to delay. The appellant will therefore do well to return in due course with cogent reasons for alleging prejudice, if he is able to do so.
- In the light of the foregoing interim decision, our direction for the continuing conduct of the appeal is as contained in Appendix 2, as adumbrated at the hearing on 18 August 2003.
- 10.1997 First visit of Customs to appellant's premises
- 11.1997 First invigilation of premises
- 12.1997 Second invigilation of premises
- 07.1998 First interview with appellant
- 11.1998 Second interview with appellant
- 02.1999 Third interview with appellant
- 06.1999 Notification of assessment under s 73
- 12.1999 Notification of assessment under s 76
- 01.2000 Review letter from Customs upholding
- 01.2000 Notice of appeal
- 07.2000 Customs' Statement of Case and List of Documents served after 2 extensions of time
- 08.2000 Letter from appellant's solicitor seeking
- 11.2000 Han and Yau letters sent to the parties
- 12.2000 Tribunal decision in Han and Yau released
- 02.2001 Notice of application by Customs for appeal
- 10.2001 Appellant's solicitor notified by Manchester
- 10.2001 MTC notifies parties of preliminary hearing
- 10.2001 PTR (attended by representatives of both parties) takes place in Newcastle before
- 12.2001 Service of Defence
- 03.2002 MTC notifies parties that hearing of the appeal
- 03.2002 Appellant's solicitor applies for postponement
- 04.2002 Customs also apply for postponement
- 05.2002 Postponement notified by MTC to appellant
- 06.2002 MTC notifies parties that appeal ready for
- 06.2002 Appellant's solicitor supplies MTC with inconvenient dates
- 07.2002 Customs supply MTC with inconvenient dates
- 09.2002 MTC notifies parties that appeal ready for
- 09.2002 Customs supply MTC with one inconvenient date
- 09.2002 Appellant's solicitor notifies no inconvenient dates save in case of his public duty as
- 09.2002 Appellant's solicitor notifies inconvenient dates
- 10.2002 MTC notifies Customs of intention to list the appeal for hearing
- 11.2002 MTC notifies parties that hearing of the appeal will take place in Newcastle on 10 & 11 March 2003
- 03.2002 MTC notifies parties that hearing of the appeal is postponed by the Tribunal of its own motion
- 03.2002 MTC notifies parties that appeal ready for
- 03.2003 Customs supply MTC with inconvenient dates
- 05.2003 MTC notifies parties that hearing of the appeal will take place in Newcastle on 18 & 19 August 2003
- 08.2003 Tribunal sits to hear appeal
- The Appellant is by his representative to seek to locate his copies of the tape recordings of the interview with the Appellant which took place on 3 February 1999, and if the tapes are available, is to attend to the correction of the transcript contained in the appeal bundle at pages 92 and following, in particular supplying the gaps in the transcript;
- The Respondents are likewise to try to locate their copies of the said tapes with a view to supplying the deficiencies in the said transcript;
- Subject as aforesaid, the parties are to seek to agree a precis of the said interview for use at the resumed hearing of the appeal, in the absence of a full transcript;
- The parties are to liaise with a view to agreeing the contents of a further appeal bundle of documents for the use of the tribunal at the resumed hearing. Such bundle is to contain copies of such documents if any to which the Appellant may wish to refer at the hearing and is to include all those in the Appellant's list of documents. The Appellant is to serve his list of documents at the Manchester Tribunal Centre ("the Centre") by not later than 1 September 2003. The further appeal bundle is also to include a copy of the Appellant's Defence/ Statement of Case received at the Centre on 20 December 2001. The Appellant's solicitor is to take responsibility for preparing and lodging the further bundle as aforesaid (in 4 copies) not later than 5 working days prior to the resumed hearing;
- The Respondents are to send to the Appellant's solicitor by not later than 1 September 2003 copies of the letter accompanying the notice of assessment dated 23 June 1999 and the accompanying schedule. Copies of the said documents are to be included in the further appeal bundle to be prepared and lodged as aforesaid;
- The Respondents are in the form of a supplemental Statement of Case, prepared in order to deal with the issue relating to the first period of the assessment, to serve at the Centre by not later than 19 September 2003 particulars of their case in relation to the legality of the assessment in relation to that period;
- The Appellant is to serve a supplemental Defence at the Centre by not later than 1 October 2003 particularising his case in relation to the said issue;
- It is recorded that the Appellant intends to submit at the resumed hearing that the records of the interviews conducted with the Appellant should not be admitted in evidence for human rights reasons;
- The hearing of the appeal is adjourned to a date to be fixed, venue Newcastle, estimated length of hearing 2 more days, to be listed not before 6 October 2003, but for an expedited hearing as soon as possible thereafter. The hearing is reserved to the existing tribunal.
HUMAN RIGHTS - art 6(1) of Convention - delay in progressing appeal against penalty under s 60 VAT Act 1994 - "Han and Yau" standover - temporary backlog of outstanding appeals awaiting hearing - remedial action to deal with backlog held to be required - interim finding that delay excessive
MANCHESTER TRIBUNAL CENTRE
Appellant
Respondents
Tribunal: Mr M S Johnson (Chairman)
Mr J E Davison
Mr R Presho
Sitting in public in Newcastle upon Tyne on the 18th August 2003
Mr T Carney, solicitor, for the Appellant
Mr N Poole, counsel instructed by the Solicitor for the Customs and Excise, for the Respondents
"29. The Court would point out in the first place that the Convention places a duty on the Contracting States to organise their legal systems so as to allow the courts to comply with the requirements of Article 6 § 1 (art. 6-1) including that of trial within a "reasonable time". Nonetheless, a temporary backlog of business does not involve liability on the part of the Contracting States provided that they take, with the requisite promptness, remedial action to deal with an exceptional situation of this kind (see the above-mentioned Buchholz judgment, Series A no. 42, p. 16, § 51, and the Foti and others judgment of 10 December 1982, Series A no. 56, p. 21, § 61).
"Methods which may fall to be considered, as a provisional expedient, admittedly include choosing to deal with cases in a particular order, based not just on the date when they were brought but on their degree of urgency and importance and, in particular, on what is at stake for the persons concerned. However, if a state of affairs of this kind is prolonged and becomes a matter of structural organisation, such methods are no longer sufficient and the State will not be able to postpone further the adoption of effective measures."
"51. The Government have drawn attention to the uncontested fact that as the result of an economic recession there was a significant increase in the volume of litigation in the field of employment, resulting in an abnormally heavy burden of business before the courts, including the Hamburg courts.
"The Court points out that the Convention places a duty on the Contracting States to organise their legal systems so as to allow the courts to comply with the requirements of Article 6 par. 1 (art. 6-1), including that of trial within a "reasonable time". Nonetheless, a temporary backlog of business does not involve liability on the part of the Contracting States provided they have taken reasonably prompt remedial action to deal with an exceptional situation of this kind."
MAN/00/48
APPENDIX 1
Date Event
VAT Act 1994
VAT Act 1994
both assessments
3 months' extension of time
for Defence
to be stood over pending Court of Appeal
decision in Han and Yau (unopposed)
Tribunal Centre ("MTC") that Court of Appeal decision in Han and Yau now available
("PTR") in Newcastle on 21.10.2001
Mr Colin Bishopp (Chairman)
will take place in Newcastle on 29.05.2002
listing and seeks an indication of hearing dates inconvenient to the parties
listing and seeks an indication of hearing dates inconvenient to the parties
H M Coroner
listing and seeks an indication of hearing dates inconvenient to the parties
APPENDIX 2
MANCHESTER TRIBUNAL CENTRE Reference No: MAN/00/48
Appellant
Respondents
Tribunal: Mr M S Johnson (Chairman)
Mr J E Davison
Mr R Presho
Sitting in public in Newcastle upon Tyne on the 18th August 2003
The appeal coming on for hearing this day
And upon hearing Mr T Carney, solicitor, for the Appellant and Mr N Poole, counsel instructed by the Solicitor for the Customs and Excise, for the Respondents
And upon the oral application of the Appellant made at the hearing for an adjournment
And upon the tribunal hearing the legal submissions of the parties as to the proper effect if any of delay on the outcome of the appeal and having regard to the decision of the tribunal in that regard
This tribunal directs as follows: