United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00714.html
Cite as: [2004] UKVAT(Excise) E714, [2004] UKVAT(Excise) E00714

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Leslie Phillips v Customs and Excise [2004] UKVAT(Excise) E00714 (04 May 2004)

EXCISE DUTY – restoration of lorry tractor unit – heard in absence under Rule 26(2) - whether decision on review not to restore proportionate and reasonable – yes – appeal dismissed

LONDON TRIBUNAL CENTRE

LESLIE PHILLIPS Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MALCOLM J F PALMER (Chairman)

Sitting in public in London on 22 March 2004

No appearance by or on behalf of the Appellant

David Manknell, Counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

The Appeal

This is an appeal by Mr Phillips against the review decision of Mr Peter G J Short ("Mr Short") dated 29 November 2002 ("the Decision"). The Decision was made after a review by Mr Short of the earlier decision of Mr R L Boyes of 23 August 2001 when Mr Boyes made the decision not to restore a tractor unit registration number G369 UBH that had been seized by Customs and Excise in August 2001. The Decision was made under the procedure set out in Sections 14 and 15 of the Finance Act 1994. In the Decision Mr Short upheld the earlier decision of Mr Boyes, which he considered to have been reasonable.

No appearance was made by or on behalf of Mr Phillips at the hearing. At the opening of the hearing Mr Manknell made an application under Rule 26(1) that the appeal be struck out, in view of the absence of Mr Phillips, or, if that did not succeed, that the appeal be heard in the absence of Mr Phillips. Taking into account that the tribunal has power to hear an appeal in the absence of the appellant under Rule 26(2), that Mr Phillips had had through his lawyers notice of the hearing date and that the tribunal, by a letter dated 26 November 2003 from Messrs Joy Merriam and Company, had been requested (if we did not hear directly from Mr Phillips, which we have not) to adjudicate on the basis of written representations made on behalf of Mr Phillips previously, I directed that the appeal be heard in the absence of Mr Phillips.

Evidence was given to me by Mr Short. I also had a 118 page bundle of documents including witness statements from Mr Short, Mr Boyes and four other persons. All six witness statements had been duly served without any objection being raised requiring attendance at the hearing for cross examination. I was also given at the hearing a calculation of the total duty of £257,400 that should have been, but as claimed by Customs and Excise was not, paid on 6,000,000 cigarettes carried by tractor G369 UBH and its trailer.

The principal issues for me are whether the Decision was lawful, reasonable and proportionate and whether there are facts relating to the seizure that I should find that are relevant on any further review that I might direct be made under section 16(4)(b) Finance Act 1994.

I accept the evidence given in the witness statements. I find, based on these witness statements, that the basic facts relating to the seizure are that on 4 August 2001 container number MSCU 5511951 was imported at Felixstowe from China. It was said to contain aluminium foil. It contained 6,000,000 counterfeit Benson & Hedges cigarettes. On 8 August this container was delivered to L & S Warehousing Limited ("L&S") at Rainham in Essex. The container and the trailer on which it had been transported to Rainham were left unloaded at the premises of L&S on the evening of 8 August.

During the evening of 8 August the trailer and container MSCU 5511951 were moved to the premises of Rainham Haulage Limited ("RHL") in Rainham. They were moved to the RHL premises by tractor unit G369 UBH. Tractor unit G369 UBH, with the trailer and container MSCU 5511951, were driven from L&S to RHL by Mr Phillips.

Sometime between 8 August and 15 August, when formal notice of seizure was given by Customs and Excise, tractor unit G369 UBH was seized by Customs and Excise. The tractor unit is described in the notice of seizure as "G369 UBH Leyland Daf Lorry". This tractor unit was seized together with the 6,000,000 counterfeit Benson & Hedges cigarettes, a M545 SRA Man Lorry and a Tilt trailer MHL8.

Mr Manknell submitted forcibly that I should dismiss the appeal because Mr Phillips has not shown that he was the owner of tractor unit G369 UBH. If he is not the owner, Mr Manknell submitted, he has no standing in the appeal and he would not be entitled to restoration in any event. Mr Manknell accepted that this was not an issue taken into account by Mr Short in his review. Notwithstanding that it had not been taken into account in that review, Mr Manknell, citing the decision of Blackburne J. in Customs and Excise Commissioners v Alzitrans SL [2003] EWHC 75 (Ch), submitted that this was an issue open to Customs and Excise to raise at this hearing. I have no hesitation in accepting that.

I turn to the evidence on ownership of G369 UBH. The records of the DVLA show that Rainham Haulage of New Road, Wennington, Rainham was registered as Vehicle Keeper of G369 UBH from 24 November 2000 until 1 March 2001 when it was acquired by David Woods of 31 Stonewall, London E6 6NY. This is the address of Mrs Susan Mamali, who is Mr Phillips's daughter. I have accepted the evidence in her witness statement. This includes the fact that during the seven years she has lived at 31 Stonewall no person with the name Woods or David Woods has lived at that address.

Initially Messrs Joy Merriam and Company, who were at the time of the review by Mr Short solicitors acting for Mr Phillips, stated in a letter dated 24 July 2002 that G369 UBH belonged to Mr Phillips. When questioned on ownership of G369 UBH and given the information on the registered details with the DVLA, they responded, in a letter dated 24 September 2002, that the vehicle displays a heavy goods operators disc in the name of Mr Phillips's brother and, in a letter dated 22 November, 2002, that they could not provide documentary evidence of ownership. In the earlier letter they had also stated that Mr Phillips lived in the vehicle and that the vehicle was being used for legitimate and gainful employment. In an interview Mr Phillips had described the vehicle as "the one I drive".

I am far from satisfied that G369 UBH was the property of Mr Phillips. However I made it clear that I was not willing to dismiss the appeal simply on that ground. It is not clear to me what standing and remedies would be open to a person in the position of Mr Phillips, who possibly had lawful possession of the vehicle, if it could be seen that the Decision was unreasonable on other grounds.

I turn to the power of Customs and Excise to seize G369 UBH. Section 141(1) Customs and Excise Management Act 1979 provides as follows:

"141 (1) without prejudice to any other provision of the Customs and Excise Act 1979, where anything has become liable to forfeiture under the customs and excise Acts-

(a) any ship, aircraft, vehicle, animal, container (including any article of passengers' baggage) or other thing whatsoever which has been used for the carriage, handling, deposit or concealment of the thing so liable to forfeiture, either at a time when it was so liable or for the purpose of the commission of the offence for which it later became so liable; and

(b) any other thing mixed, packed or found with the thing so liable,

shall also be liable to forfeiture."

I have no difficulty in coming to the conclusion based on the facts that I have so far found that G369 UBH was used in the carriage or handling of the 6,000,000 counterfeit cigarettes. Those cigarettes were liable to forfeiture. It follows that under section 141(1)(a) G369 UBH was also liable to forfeiture.

Mr Manknell took me carefully paragraph by paragraph through the Decision. Other than a minor error as to the time when the police entered the premises of RHL, which in my view has no significance, I can see no flaw in the approach taken by Mr Short in his review, in the facts on which he relied or in the law he considered relevant.

At this point I turn to the written representations made on behalf of Mr Phillips. The only representations made on his behalf that I am aware of are those set out in the letters of Messrs Joy Merriam & Co to Customs and Excise of 24 July, 24 September and 22 November 2002. These are the representations made to Mr Short for the purposes of his review. In summary these representations, to the extent that they are not corrected or amplified by a later of the above letters, are as follows:

(a) Mrs Susan Mamali is Mr Phillips's daughter and the vehicle was registered at her address, although David Woods was not resident there;

(b) The vehicle displays a heavy goods operator's disc in the name of John Joseph Phillips, the brother of Mr Leslie Phillips;

(c) The vehicle was used for legitimate and gainful employment and without the vehicle Mr Phillips employment prospects are bleak;

(d) Mr Phillips lived in the vehicle;

(e) The Customs and Excise officers involved in the investigation realised that the vehicle was in fact the property of Mr Phillips and not of Mr Ashman (to whom the notice of seizure had been given);

(f) Criminal proceedings against Mr Phillips were withdrawn and, therefore, in the interests of justice the property ought to be returned to him;

(g) Mr Phillips has instructed Messrs Joy Merriam and Company that £6,500 was paid for the vehicle in cash;

(h) There was no finance agreement relating to the vehicle;

(i) Mr Phillips was using the vehicle for haulage purposes. This was his job at the time. He worked on a freelance basis and picked up work occasionally. He had saved funds in order to purchase the vehicle and traded in his previous vehicle. He specifically bought a left hand drive vehicle because he had planned to work on the Continent;

(j) Mr Phillips had no knowledge with regard to the nature of the load; and

(k) He received his instructions with regard to the load by telephone with no formal written instructions.

I am satisfied that Mr Short took these representations into account in his review. I consider it reasonable for Mr Short to take into account in the Decision that he suspected that either:

(a) the name David Woods was fictitiously entered on the vehicle registration documents in order to conceal the identity of the true owner; or

(b) the vehicle belongs to a David Woods but his connection is being distanced from the Customs and Excise investigation.

I also consider that Mr Short was reasonable to recognise and suspect that, based on the answers Mr Phillips gave in his interview, that he was not being as open as he could be in relation to the events leading to the seizure.

Taking into account the above representations and the other matters referred to in the Decision I am satisfied that it was reasonable for Mr Short to come to the conclusion he did and to decide not to restore G369 UBH.

Taking into account the duty of over £250,000 payable on the 6,000,000 cigarettes moved by G369 UBH I consider that the seizure of G369 UBH was proportionate.

For these reasons I am not satisfied that the Decision was in any significant way unreasonable and I, therefore, dismiss the appeal.

Mr Manknell asked for a contribution of £500 towards the costs of Customs and Excise. As a general rule it has been stated that Customs and Excise do not ask for costs against an unsuccessful appellant. However that general rule is subject to a number of exceptions. One such exception is where the appellant has failed to appear or to be represented at a mutually arranged hearing without sufficient explanation. I consider that this hearing has been mutually arranged within the spirit of that statement. Mr Phillips lawyers, although they notified the tribunal that they had no authority to give to the tribunal Mr Phillips address, were given proper notice of the hearing date. I was given no explanation of Mr Phillips absence. The representations the tribunal was asked to take into account were only the same representations as those previously given to Mr Short for the purpose of his review. Taking these points into account, I direct that Mr Phillips pay £500 in or towards the costs of Customs and Excise incidental to or consequent upon the appeal.

MALCOLM J F PALMER

CHAIRMAN

RELEASED:

LON/03/8142