United Kingdom VAT & Duties Tribunals (Excise) Decisions

Williams v Customs & Excise [2003] UKVAT(Excise) E00491 (12 September 2003)

EXCISE – Restoration vehicle – Re-review carried out on direction of Tribunal – Review officer conducted further investigations but did not contact Appellant – Whether obligation to do so – Whether proportionality needed to be considered – Lindsay followed – Whether exceptional hardship – Although review not conducted properly case not remitted again as no evidence exceptional hardship

LONDON TRIBUNAL CENTRE

ANDREW WILLIAMS Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MISS J C GORT (Chairman)

MISS A WEST FCA

MR M JAMES

Sitting in public in Plymouth on 8 August 2003

The Appellant appeared in person

Mr M Barnes of counsel, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

1. This is an appeal against a decision of the Commissioners dated 28 June 2002 not to restore a Rover 214 motor vehicle. There had been an earlier decision by the Commissioners not to restore the vehicle which had been appealed by the Appellant, and, following a full hearing of that appeal the Tribunal, by a decision dated 10 October 2001, had remitted the matter to the Commissioners on the following basis:

"This appeal is allowed to the extent that it is remitted to the Commissioners to consider whether it is reasonable to refuse to restore a vehicle worth some £6000 where the duty evaded is some £2,932, and to consider whether by being deprived of his vehicle the appellant suffers undue hardship."

2. The first appeal had been heard on 14 September 2001 before Miss J C Gort and Mr M James. Miss A West was not sitting on that occasion. We considered it appropriate that the facts in the present appeal should be those as found on the previous occasion and recorded in the decision No. E0171.
3. In addition to the facts as found previously we heard further evidence from Mr Williams himself and evidence from Mr David Arthur Leavesley, a senior officer with Customs and Excise who was the reviewing officer for the re-review.
4. In his review letter Mr Leavesley referred to the fact that at the original hearing the then review officer had accepted a valuation of the car as being "in the region of £6000". He then went on to refer to the case of Lindsay [2002] STC 588 and to a passage in that case where the Master of the Rolls had referred to Glass's Guide for establishing the value of the vehicle in question. Mr Leavesley himself had checked Glass's Guide and stated that it gave a value for the Appellant's vehicle at the time of seizure as £4,450. (At the hearing he said this was an error, and the correct figure was £5,450.) He then went on to consider the proportionate value of the car to the goods seized, which at £6000 was approximately 2:1, but given a valuation of £4,450 was less than that. Having established a lesser proportion he then referred to the case of Hargreaves, heard in the Manchester tribunal, in which the chairman had considered that where a car was worth £2000, and the loss to the revenue £1000, seizure of the car was proportionate.
5. Over half a page of the review letter is taken up by the above matters and yet in his evidence before us Mr Leavesley insisted that he had taken the agreed value of £6000 at the time of the original hearing as the appropriate value for the car at the time he made his decision.
6. In his review letter Mr Leavesley considered the evidence with regard to whether or not the goods were purchased solely for the Appellant's own use, and analysed in considerable detail the cost of the tobacco products purchased and the amount the Appellant had stated he was paid by colleagues for the goods as follows:

"Furthermore, the incriminating pieces of paper indicate a price for cigarettes that states: "All fag 23.00." This is not the normal price for a pack of 200 cigarettes, which retail at around £19 in most outlets abroad and which are shown on your receipt No. 4 10316 as costing £18 for Embassy and £16 for Rothmans. The 10,000 cigarettes you imported comprised of 25 packs of each brand and at £23 per pack represented a potential profit of £300.

This figure more than compensates for the travel ticket (that cost £14.50), petrol and wear and tear on the vehicle. It does not take into account the additional potential profit on an import of 16 kilos (320 pouches) of hand-rolling tobacco by you and your girlfriend, where you only smoke hand-rolling tobacco at weekends and your girlfriend consumes only two pouches a week.

…

If I take as example the individual requests of two work colleagues, the paper shows the following:-

Ginge 2 Royals 45-00

2 Embassy 46-00

91-00 to pay

A Blazier 4 Embassy 92-00 to pay

Your receipt from the "Tobacco Store" confirms that you purchased the packs of Royals for £16 and the packs of Embassy for £18. Yet you were charging colleagues £22.50 and £23 for these goods. This appears a clear case of smuggling for profit and I consider it totally reasonable that the vehicle used in the carriage of such goods should have been seized and not restored."

He concluded:

"This appears a clear case of smuggling for profit and I consider it totally reasonable that the vehicle used for the carriage of such goods should have been seized and not restored."

7. Having reached that conclusion he then made further reference to the case of Lindsay and went further into the evidence regarding the Appellant's awareness or otherwise of Public Notice No.1 (a Customs guide for travellers entering the UK).
8. With regard to the matter of hardship, Mr Leavesley stated inter alia as follows:

"A city like Exeter will have regular bus services and unless every parent with children in every school has a car, you will have to do like many others and utilise public transport. You work as a "production/process worker" (as stated in your interview). It was not clarified at the time if this was in a factory but it appears to be a location where again, unless all employees have a car, it can be reached by means of public transport."

9. Mr Leavesley then went on to refer to the fact that the Appellant has two children on Merseyside who live with their mother, and a daughter on Merseyside who has had a baby. He continued:

"Again, it has not been made clear whether the daughter gave birth recently, whether there is cause for concern and whether she is, in fact, one of the children who lives with their mother. Nor have you made any mention of the baby's father, who would normally be expected to provide the supportive role.

There are many people in this country who cannot drive and who have relatives living many miles away. It is normal for them to utilise public transport in getting from one place to the other."

10. Mr Leavesley made enquiries of the National Express office in Canterbury in Kent as to the price of a coach journey from Exeter, where the Appellant lives, to Merseyside, and found that it was some £37 to travel on a weekday. He made no reference in his review letter to having made any enquiry as to the cost of travelling at a weekend although in evidence before us he said that he had found out that the cost at the week-ends was £48. Nor did he make any enquiries as to the time of day at which the Appellant went to work and the possibility of his getting to his work by public transport.
11. In his review letter Mr Leavesley states:

"You have claimed that the loss of the vehicle has resulted in an increase of £20 each time you want to visit your children on Merseyside. I have made enquiries into the price of the return ticket on the National Express service from Exeter to Liverpool and the cost is as little as £36 dependent on which day of the week you travel. The journey takes two or three more hours than by car, but represents a saving of £24 on the cost you have calculated when travelling by car."

12. It emerged in the course of the hearing that, subsequent to writing of his decision, Mr Leavesley had taken the trouble to investigate whether or not the Appellant had acquired a further motor vehicle, and made enquiry as to the owners of two vehicles which were registered to the Appellant's address.
13. Mr Leavesley referred to the problem he had had in not being given additional information by the Appellant and his view that there was an evidential burden upon the Appellant in the circumstances, but no duty upon him to make enquiries of the Appellant.
14. After Mr Leavesley had given his evidence the Tribunal considered it appropriate that the Appellant should be recalled. This move was objected to by Mr Barnes, however we deemed it appropriate that Mr Williams should have an opportunity to give evidence with regard to the issue of hardship, about which Mr Leavesley had made various assumptions.
15. It was the Appellant's further evidence that whilst on some days he could reach his place of work by public transport, he was unable to do so when he worked an early shift which started at 6.00am, which he had to do every other week. It was not possible, other than for the odd day, to avoid doing the early shift.
16. When the car was first seized he sometimes was able to get a lift to work, but on several occasions he walked. The journey was some 5-7 miles and it took him about an hour and a quarter to walk there. He had thought about getting a bicycle, but there were steep hills on the way and he was not particularly fit.
17. He had subsequently bought a car he described as an "old banger", which he had had for some two to three months, he had then had another car for about two months and some five months prior to the hearing he had bought a Renault Megane which had cost £9,000. To purchase it he had taken out a further mortgage.
18. His car had originally been seized almost three years prior to this hearing. At that time the Appellant had usually travelled on a Friday to Merseyside, taking his son and daughter and granddaughter with him in the car for a total cost of some £47.50. He used to travel about once a month. Since the loss of his car he could only travel by himself. The present situation was that his son no longer wished to go with him.
19. Mr Barnes asked him why he had not put forward these matters in respect of hardship and the Appellant said both that he had expected that the Commissioners knew these facts and also that he had never been asked about them. In addition he had referred to some of these matters at the previous hearing.
20. In his submissions Mr Barnes referred to the fact that on the previous occasion the Tribunal had not ordered the Commissioners to carry out any investigations or to contact the Appellant, and therefore it had been quite proper for them not to do so. There was a duty upon the Appellant to submit any further evidence he wanted the officer to consider on his review.
21. Mr Barnes further submitted that there was nothing in the statute or the regulations to say that there was an obligation to carry out investigations, and, whilst the Appellant was not represented, it was open to him to get either pro bono representation or to go to the Citizens Advice Bureau. It would place an unreasonably high burden on the Respondents to expect them to contact the Appellant in the circumstances. In carrying out his review the officer had considered all the facts and evidence which were in front of him and had come to the conclusion the vehicle should not be restored.
22. It was submitted that it had been appropriate for him to look at the ratio of the cost of the vehicle to the amount of revenue lost, and his decision that a ration of 2:1 was not disproportionate was proper. Since the initial tribunal decision the case of Lindsay had been decided and the officer had adopted the correct approach set out there to consider whether the goods were to be passed on at a profit or not for profit.
23. With regard to hardship it was accepted by the Respondents that Mr Leavesley should perhaps also have included in his letter the fact that he had ascertained that the cost of the journey to Merseyside would be £48 at the weekends. Whilst he had also not taken in the fact that the Appellant took his children with him, this had not been before him. He could only rely on what he had in front of him.
24. It was further submitted that there was no evidence in this case of undue hardship, Phillips MR in the case of Lindsay had referred to "exceptional" hardship and to the fact that it must be given due consideration. It was not said that where there was hardship the vehicle must be restored, only that restoration must be considered.
25. It was considered by Mr Barnes that the law was uncertain as to what a reviewing officer must consider on re-review. In the present case the officer had exceeded his duties in investigating the case. Whilst he had not considered the fact that the Appellant started work at 6.00am, nor the fact that the Appellant had been without a car for some 18 months, and had previously had to walk to work or get a lift, whilst this may have been hard, it was not exceptional hardship.
26. The officer was not limited to a consideration of the evidence before him, he also had a duty to consider any evidence sent in by the Appellant. There was no duty on him to contact the Appellant and to make enquiries.

Reasons for decision

27. Since the Tribunal initially heard this case, the law has been clarified in the case of Lindsay. In that case it was made clear that where the owner of the vehicle was bringing in tobacco products which were not only for his own use, then the issue of proportionality was not usually a matter for consideration. At paragraph 63 Phillips MR stated:

"Those that deliberately use their cars to further fraudulent commercial ventures in the knowledge that if they are caught, their cars will be rendered liable to forfeiture, cannot reasonably complain if they lose those vehicles. Nor does it seem to me that, in such circumstances, the value of the car used need to be taken into consideration. Those circumstances will normally take the case beyond the threshold where that factor can carry significant weight in the balance. Cases of exceptional hardship must always, of course, be given due consideration."

28. The Tribunal in its earlier consideration of the case had not been prepared to accept the Appellant's evidence with regard to pieces of paper found in his car which were said to relate to requests by colleagues at work for him to obtain cigarettes and tobacco from various pubs in Exeter, and had concluded "In the circumstances the Tribunal is not satisfied that these purchases were made solely for the Appellant's and his girlfriend's own use." We now accept Mr Leavesley's further analysis of the costs involved as set out above.
29. Whilst, as stated above, we do not consider it right that Mr Leavesley should have made his own enquiries as to the value of the car, in the face of his colleague's having accepted the value of £6000 and the finding of the Tribunal, nonetheless we think that his conclusion that the goods were being imported for profit is a reasonable one, and, in the light of the Court of Appeal dicta in Lindsay, the issue of proportionality was not one that he needed to consider further.
30. With regard to hardship, we were very unhappy that Mr Leavesley considered it right to make his own investigations with regard to the cost of the coach fare when considering the issue, but did not consider that he had a duty to contact the Appellant to establish just what the facts were. We do not consider it right that he should have made assumptions as to when the Appellant travelled to Merseyside, nor as to the availability of public transport for him to get to work. Whilst the Tribunal could perhaps have issued a more specific direction with regard to hardship, it might nonetheless be expected that the Commissioners would write to the Appellant and invite him to set down any matters relating to hardship which he wished them to take into consideration.
31. We are not satisfied that Mr Leavesley conducted his review in a fair manner. The Appellant had not been represented at the earlier hearing , and no enquiries were made of him in respect of the matters which Mr Leavesley had investigated of his own initiative. Mr Leavesley thought fit to make enquiries as to the cost of a coach journey, but specifically excluded the fact that the cost at a weekend was considerably more than the cost of travelling during the week. It must have been apparent to him that the Appellant, as a working man, would be far more likely to be travelling at the weekend. Mr Leavesley also made assumptions with regard to the fact that the Appellant would be travelling alone to Merseyside, and speculated on the possibility of the Appellant's grandchild's father being able to take some responsibility. We do not consider that this was an appropriate way to conduct a review. Whilst there is no statutory requirement for the officer to make enquiries of an Appellant, in the present situation, where has decided to make other enquiries and ascertain facts other than those found by the previous Tribunal, we consider it to be incumbent upon him as a matter of fairness to do so, given that most of the matters he was investigating arose out of the Appellant's evidence at the previous hearing, rather than out of matters known to the seizing officer.
32. Whilst, although we consider that the reviewing officer did take account of matters which he ought not to have done, and did not take account of matters which he should have done, with regard to hardship when carrying out this review, we do not consider there would be any purpose in remitting this matter yet again for a further review. Having heard the Appellant with regard to hardship, whilst we accept that the loss of the vehicle did cause him some hardship, we do not consider that it was to an exceptional degree such as would warrant any further consideration being given to the matter and in all the circumstances this appeal is dismissed.
33. No order for costs.

MISS J C GORT

CHAIRMAN

RELEASED:

LON/02/8200