United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2004] UKVAT(Excise) E801, [2004] UKVAT(Excise) E00801

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Barr & Anor v Customs and Excise [2004] UKVAT(Excise) E00801 (21 October 2004)

E00801

Appeal--Strike out---appeal does not lie or cannot be entertained by a Tribunal--VAT Tribunal Rules, SI 1986/590 r6(1)(as amended).

BELFAST TRIBUNAL CENTRE

GEORGE SIMON BARR AND SARAH-ANNE CAMPBELL Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: HIS HONOUR JUDGE MCKEE Q.C. (Chairman)

MRS JOAN WHITESIDE OBE

Sitting in public in Belfast on the 3rd September 2004

Mr S. J. Creighton, solicitor, appeared for the Appellants

Mr J. Puzey, Barrister-at-law, appeared for the Respondents instructed by the solicitor for the Commissioners of Customs and Excise for the Respondents

© CROWN COPYRIGHT 2004

DECISION

The Respondents, by Notice dated the 12th August 2003, sought to have this appeal struck out pursuant to Rule 6 of the VAT Tribunal Rules 1986 "as there is no appealable matter." While resisting this application the Appellants also sought a Direction from this Tribunal that the Respondents carry out a Review. The parties agreed that these applications could be dealt with by way of preliminary hearing.

The facts of this case are not in issue and are rehearsed in correspondence exchanged between the parties.

On the 16th January 2001 the Appellants had their goods seized by customs officers at Dover. These goods comprised tobacco and spirits. In addition the customs officers seized the car carrying these goods being the car in which the Appellants were travelling. The reason for these seizures was that the customs officers were not satisfied that the goods were for personal use due to the amount of goods carried in the car. The quantity of goods exceeded the then accepted guidelines as defined in the Excise Goods (Personal Reliefs) Order 1992 and indeed also exceeded the quantities subsequently mentioned in the guidelines published on the revocation of this Order after the Hoverspeed case 2002 3 WLR 1219 was decided by the Court of Appeal and published in draft form on the 10th December 2002. The authority for the seizure was contained in the provisions of the Customs and Excise Management Act 1979, section 139. I refer to the forms, C156 relating to the seizure of the goods, and form SEE004C relating to the seizure of the vehicle both of which were furnished by Mr Creighton.

The Appellants appealed these seizures to the Magistrates Court but withdrew their appeal (as appears from their handwritten letter dated the 28th September 2001 and subsequently confirmed in Mr Creighton's letter dated the 15th May 2003) and an Order for Condemnation of the goods was made on the 4th October 2001. The Appellants did not lodge any appeal. It appeared in later correspondence (ie in a letter dated the 25th June 2003 ) that the tobacco goods were disposed of on the 12th February 2001, the spirits on the 30th March 2001. The car was sold on the 21st December 2001.

By letter dated the 12th March, 2003 the Appellants requested the restoration of the seized items on the grounds that:-

"Seizure was affected under the Excise Goods (Personal Reliefs) Order 1992 now revoked . In the light of the July 2002 Hoverspeed Judgment (upheld substantially on appeal) and in the light of matters which have come to the fore through other recent cases such as Gascoyne High Court Appeal. We also refer Judgment made in favour of Mr Barr by the Resident Magistrate at Belfast (also in July 2002) which found that HM Customs had acted unlawfully and breached his human rights…."

2

It is to be noted that this finding, dated the 26th July 2002, by Mr McRandal R.M. in favour of the first-named Appellant related to a previous seizure of goods by Customs Officers at Larne, County Antrim on the 5th March 1999. A copy of that finding was before this Tribunal and from this it appears that the Respondents had brought Condemnation Proceedings in respect of that seizure on the 21st November 2001. The issue before the learned Resident Magistrate concerned the question as to whether Mr Barr's Human Rights under the provisions of Article 6(1) of the European Convention of Human Rights had been infringed in that Mr Barr had been denied "…a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law." The learned magistrate entertained and granted an Application brought on behalf of Mr Barr for a stay of these proceedings on the grounds that on this occasion, by reason of delay in bringing the Condemnation Proceedings, Mr Barr's human rights as specified in Article 6(1) were indeed infringed.

While taking these proceedings into account this Tribunal noted that they did not relate to the seizure of goods effected by Customs Officers in Dover on the 16th January 2001, being the seizure the subject of this application.

Mr Creighton, in the course of his submissions, made it clear that he was not then seeking to reopen the question of the validity of the seizure of the Appellants' goods on the 16th January 2001. Nor was he seeking an Order for the restoration of these goods. His case was rather that the refusal of the Respondents to grant a Review (as provided for in section 14 of the Finance Act 1994) of their decision not to restore the goods denied his clients their rights. He therefore sought from this Tribunal a Direction that the Respondents carry out such a review against which the Appellants could raise an appeal.

Mr Creighton was justified in complaining on behalf of his clients of mistakes made by the Respondents:-

(1) This Tribunal was referred to a letter dated the 24th July 2003 in which it was acknowledged that the Appellants non-perishable goods seized, namely the 7.7 litres of spirits, had been disposed of before the Condemnation Proceedings took place. This the Respondents attributed to "human error".

(2) By Letter dated the 9th June 2003 addressed to Mr Creighton the following mistake was identified as follows:-

"It appears that your clients first requested restoration on 12 March 2003. Having reviewed the replies already sent to you, regrettably, both our reply of the 11 April 2003 and 12 May 2003 only dealt with the issue of appealing the seizure in a Magistrates' Court. Please accept my apologies for this oversight."

Mr Creighton relied on these two matters as part of his grounds for applying to this Tribunal for a Direction against the Respondents requiring them to carry out a Review. This Tribunal has considered this submission and, while confirming that the Respondents are to be censured for these lapses, nevertheless consider that the Appellants cannot rely on them to ground their claim.

Mr Creighton also levelled criticism against the Respondents for not serving the Order for Condemnation on the Appellants though he produced no authority to establish that any such legal obligation rested on them. This was, nonetheless in his submission, yet another administrative error or mistake committed by Customs dealing with this case. In his reply Mr Puzey submitted that there was no such legal obligation on the Respondents and, in the absence of authority, this Tribunal finds that, unlike 5(1) and (2) mentioned above, this criticism of the Respondents has not been justified.

The Respondents have steadfastly refused to carry our the review sought by Mr Creighton on behalf of his clients. By letter dated the 9th June 2003 the Respondents wrote explaining:-

"In relation to the request for restoration, as the goods and vehicle were condemned as forfeit on the 4th October 2001, and have now either been destroyed or sold, there is no basis for making restoration to your clients. It follows, that there is, therefore, no basis for Customs to undertake a review."

Mr Creighton replied by letter dated the 12th June 2003 as follows:-

"Can you confirm that your letter dated 9th June 2003 is a refusal to restore goods in response to the request dated the 12th March? and also a refusal to carry out the review of that said decision as required under the Finance Act? If this is the case I will proceed to present my client's application to the VAT & Duties Tribunal. If you have not refused either to restore or review, I will be presenting the matters on the basis of assumed or deemed decisions not to carry out the required review and not to restore as a result of a review…."

The Respondents explained in reply by letter dated the 25th June:-

"To clarify, my letter of 9th June is not a refusal to restore the items, but rather confirmation that the Commissioners cannot consider the request. As you are aware the goods and vehicle were condemned as forfeit on the 4th October 2001 and, therefore, became the property of the Commissioners…"

This letter goes on to set out the disposal of the goods and continues:-

"As a consequence of the above as at the date of receipt of your clients' letter (dated 12 March 2003) the Commissioners no longer had in their possession the goods and vehicle to which your clients seek restoration on. Therefore they cannot give consideration to restoring the goods or vehicle…"
Finally in this letter the Respondents point out that…" there is no provision under the Finance Act 1994 to replace one form of property into another form i.e. goods replaced by a monetary value"

This Tribunal considered carefully the question whether the decision not to give a review was itself a decision under section 14 of the Finance Act 1994 which would entitle the Appellants to bring their appeal to this Tribunal. Mr Puzey opened this section and referred the Tribunal (as does section 14 at sub section (1) (d)) to Schedule 5 of the Act and in particular to paragraph 2 (1) (r ) of that Schedule dealing with:-

"any decision under section 152 (b) (of the Customs and Excise Management Act 1979) as to whether or not anything forfeited or seized under the customs and excise Acts is to be restored to any person or as to the conditions subject to which any such thing is to be restored;…"

Section 152 of the Customs and Excise Management Act 1979 gives the Commissioners a discretion as follows:-

" The Commissioners may, as they see fit,--
(a) …
(b) restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under those Acts;…" (the customs and excise Acts)

Mr Creighton submitted that this discretion cannot be an unfettered discretion and must be subject to review. Mr Puzey, however, pointed out that the discretion was to restore "…any thing forfeited or seized…" and in this case, because of the long delay by the appellants in making their request for restoration, that was not an option open to the Respondents. There was no discretion to restore any thing other than the goods forfeited or seized. The question for this Tribunal was whether the exercise of that discretion by the Commissioners, that is not to restore, was reasonable and one which was open to a reasonable person. He further submitted that a decision under the Customs and Excise Management Act 1979 was not a failure to give a decision as submitted by Mr Creighton. Alternatively Mr Puzey submitted that if Mr Creighton was right and here the Commissioners failed to give a decision then there is no grounds for suggesting that there can be a review of a decision which was not taken. The grounds for making an appeal to this Tribunal are set out in section 16 of the Finance Act 1994 as follows:-

"…an appeal shall lie to an appeal tribunal with respect to any of the following decisions, that is to say--
(a) any decision by the Commissioners on a review under section 15 above (including a deemed confirmation under sub section (2) of that section ) and
(b) any decision by the Commissioners on such review of a decision to which section 14 above applies as the Commissioners have agreed to undertake in consequence of a request made after the end of the period mentioned in section 14 (3) above."

Mr Puzey submitted that the conditions envisaged in (a) and (b) above did not arise. He argued that one could not have a deemed decision to restore nothing under the provisions of either of the Acts mentioned.

His submissions amounted to this that there was no statutory authority to entitle an Appellant to require a review of a failure to give a decision. If there was no decision then that could not be reviewed. Essentially the Appellants remedy in this case lay by way of Judicial Review in the High Court and not to this Tribunal.

In any event , having considered the terms of section 152, it is clear to this Tribunal that the Respondents have a discretion to restore specified goods being restricted to "… anything forfeited or seized under those Acts…" (the customs and excise Acts). If the goods forfeited or seized do not exist then their discretion does not exist.

Mr Creighton made frequent reference to Notice 12A published by the Respondents and emphasised that the Respondents had not followed the terms of their own publication.

(1) He submitted that there was no time limit on application for the return of seized goods (See paragraph 3.5).

Mr Puzey conceded that that was indeed the case.

(2) In paragraph 3.6, however, the Notice set out a warning that seized perishable goods will be disposed of "…as quickly as we can." Non-perishable goods or a vehicle would be disposed of within 45 days "…unless we receive a request for their return or an appeal against the seizure…"

(3) In paragraph 3.1 of the Notice the Respondents described the process of "restoration" making no reference therein to time limits. This is clearly a reference to the discretion the Commissioners have under section 152 of the Customs and Excise Management Act 1979. Mr Creighton submitted that the Respondents had failed to apply their own terms in this regard. While he went on to mention proportionality, this, Mr Puzey pointed out, could not be interpreted as an attempt to reopen issues which had long since been resolved by the Magistrate's Court in the Condemnation Proceedings. In this regard Mr Puzey referred this Tribunal to the judgment of Buxton L.J. in the Court of Appeal in Gascoyne v Commissioners of Customs and Excise which judgment was issued on the 28th July 2004. At paragraph 46 and 47 of the judgment, adopted by the Court, appears the following statement of the law:--
46" …I do not think it can have been intended that exporter before the tribunal would have a second bite at the cherry of lawfulness, having failed in the condemnation proceedings or let them go by default.

47. To the extent that it was argued that the literal provisions of section 152 (b) (of the Customs and Excise Management Act 1979 ) are wide enough to allow such a second bite, I would agree that this is so, but the reason why the importer cannot have that liberty is not because of the terms of the statute , but because of the normal English law rules of res judicata or abuse of process.."
(We note that the transcript of the judgment refers to "Exporter" in paragraph 46 but we conclude that in the context this is an error and the reference was to the "importer" and we have so interpreted the dictum.)
Mr Creighton did concede, at one stage in his submissions, that the Appellants were not seeking to re-open the question of seizure, but later he drew it to our attention that the Excise (Personal Reliefs) Order 1992 had, since the seizure on the 16 January 2001, been revoked. He indicated that he was not seeking to take advantage of this change in the law but nonetheless invited this tribunal to take this circumstance into account when considering his submission that his clients were entitled to a Direction against the Respondents requiring them to carry out a review.

Next Mr Creighton referred this Tribunal to Notice 990 also published by the Respondents suggesting that:-

(1) paragraph 1.4 on page 4 of that Notice gave the Appellants a right to a decision and

(2) paragraph 5.1 on page 13 indicated that there was a jurisdiction reposed in the Tribunal to entertain appeals in respect of the restoration of seized goods.

Mr Creighton furnished this tribunal with a bundle of decisions of tribunals sitting in England which, he submitted, when studied, would substantiate his submission that the law was administered differently in England. We have indeed studied these cases carefully and note in the first place that, while they may be persuasive insofar as they relate to the matters we are here considering, they are nonetheless not binding as are the judgments of the Court of Appeal.

We are firmly of the opinion that we must, and do, accept that the seizure on the 16th January 2001 was valid under the law that applied at the time. It is not open to this tribunal to question this . We should add that while we have given close attention to Mr Creighton's submissions based on a reading of Notice 12A and Notice 990, we are under a duty to apply the statutory law as we find it there set forth and this law, as interpreted by the Courts, must prevail regardless of the possibility of an inconsistency with these Notices.

At this stage it is appropriate to refer to Mr Creighton's citing the Community Customs Code (EEC) No 2913/92. In particular he relied on the definition of "Decision" as set out in Article 4 (5) and also to Article 6. His argument was that the Appellants could call in aid the terms of Article 243 as follows:

"Any person shall have the right to appeal against decisions taken by the Customs authority which relate to the application of customs legislation and which concern him directly or individually."

This point arose in Gora's case in the course of the Tribunal hearing. The facts of that case closely corresponded with this case in that Gora's goods had been detained, that detention , it was argued, was "an application of Customs legislation" and that decision concerned Gora "directly and individually" because it deprived him of substantial parts of his property for a potentially substantial period. It followed that Gora could, it was argued, have an appeal against the Commissioners refusal to return the detained goods.

In reply Mr Puzey cited the dictum of the President of VAT and Duties Tribunals in Gora v The Commissioners of Customs and Excise at paragraph 20 (which dictum was not the subject of appeal) where he finds that:-

"The problem with that argument is that the Community Customs Code does not apply to excise duty. …During the detention period the "owner" has no means , statutory or otherwise, to recover them, unless of course the Commissioners can be shown to have acted excessively or abusively, in which case the High Court judicial review proceedings are then available."

Mr Creighton drew to the attention of this Tribunal a series of cases. We were most anxious to derive assistance in the resolution of this case. However the cases could all be distinguished on their facts. In all of these cases the Commissioners had carried out a review and none of the cases involved a delay of more that two years between the date of the seizure and the claim for restoration.

Mr Creighton argued that the Appellants' human rights will have been denied if they cannot bring their appeal to this Tribunal. In this respect this Tribunal has considered the judgment of Pill LJ in Gora & others v Commissioners of Customs and Excise 2003 EWCA Civ 525. There the Court of Appeal found that there was no non-compliance with Article 6 (of the European Convention on Human Rights) since the matter can be resolved by judicial review in the High Court.

There remained the question whether the refusal of the Respondents in this case to carry out a review could properly be regarded as reasonable or, as Mr Creighton submitted, amounted to a clear attempt on their part to deprive the Appellants of their remedy in this Tribunal. In this regard Mr Creighton laid particular weight on the terms of my Amended Direction.
Mr Puzey pointed to an inherent contradiction between the terms of clause 3 and clause 1 of that Direction. Mr Creighton regarded Clause 3 as a finding in law binding on this Tribunal.

Clause 3 reads:-

"The failure of the Respondents to furnish a decision in this case must be regarded as a deemed decision that the appeal is denied."

In the light of the detailed submissions now before this Tribunal it is clear that if this clause is interpreted as meaning that this Tribunal cannot investigate the submissions that it has no jurisdiction to enquire into the Respondent's refusal to carry out a review, then that would inhibit the full and fair disposal of this case. In those circumstances, to avoid any risk of ambiguity concerning such a conclusion, we have decided that my Amended Direction released on the 14th April 2004 should be further amended to remove this clause.

We have considered the question as to whether the refusal of the Respondents to carry out a review, as stated first in their letter of the 9th June 2003, could be described as unreasonable and designed to deprive the Appellants of their remedy in this Tribunal This was the argument presented by Mr Creighton. Mr Puzey argued that this was the only course open to the Respondents. In arriving at a conclusion we have taken into account the lapse of time between the letter, dated the 28th September 2001, in which the Appellants withdrew their appeal against the Respondent's application for forfeiture of the goods in the condemnation proceedings in the Magistrate's Court and their next letter claiming restoration of the goods dated the 12th March 2003. While that Order of the Magistrate's Court may not have been served on the Appellants we think it so improbable as to be unthinkable that either of the Appellant's might think that their goods had not been disposed of as a consequence of the condemnation proceedings sometime during the ensuing 18 months. Moreover Mr Creighton's letter dated the 12th June 2003 makes it clear, in the final paragraph, that the Appellants did not expect to have their goods physically restored. He wrote:-

"As you will be aware restoration generally takes the form of financial compensation for the goods in question."

Mr Creighton addressed us on this matter referring to the premature disposal of the Appellants' spirits. But this circumstance cannot have influenced the Appellants, or either of them, because they did not know of this premature disposal until after the 12th March 2003. We refer to the law on this point as set out in paragraph 7 of this decision. In all the circumstances we cannot conceive of any course which was open to the Respondents other than the one which they adopted. There is no authority entitling them to offer financial compensation under the Finance Act 1994 and there could be no restoration of the goods. Moreover we bear it in mind that the Appellants have a remedy, and always had a remedy, by way of Judicial Review in the High Court as was emphasised by Mr Puzey in the course of presenting his argument. It is regrettable that the Respondents made mistakes in dealing with the Appellants' request for restoration of goods but these will not furnish grounds for avoiding the effect of the statutory requirements. Accordingly we conclude that the course adopted by the Respondents in refusing a review was one which was open to a reasonable person and was itself reasonable in the Wednesbury sense.

Mr Creighton argued that the Appellants' human rights will have been denied if they cannot bring an appeal to this Tribunal. In this respect this Tribunal has considered the judgment of Pill LJ in GORA & others v Commissioners of Customs and Excise 2003 EWCA Civ 525. There the Court of Appeal found that there was no non-compliance with Article 6 (of the European Convention on Human Rights) since the matter could still be resolved by judicial review in the High Court.

We therefore refuse the Appellants the Direction which they seek and strike out this Appeal under the provisions of Rule 6 of the VAT and Duties Tribunal Rules 1986 on the grounds that this appeal does not lie to, or cannot be entertained by this Tribunal.

For the sake of completeness, however, we have directed our minds to the question raised by Mr Puzey as to whether this appeal could properly be regarded as an abuse of the tribunal's procedures. We have already set out in paragraph 4 of this decision a verbatim quotation from the Appellants' letter dated the 12th March 2003 claiming restoration of goods. Mr Creighton made lengthy and detailed submissions to explain why the Appellants' claim for restoration of goods was so long delayed. Having considered those submissions we find no substance in them. We find that they do not explain the terms of the Appellant's letter of claim and we are emphatically of the opinion that the letter stands and speaks for itself to the effect that the Appellants launched their claim only when it appeared to them that subsequent changes in the law were propitious and could be employed to promote their case for relief against the Respondents.

In the course of the hearing we explained why this course was not open to the Appellants, but since they were not apparently present it is perhaps appropriate to restate those reasons here. The seizure of the goods on the 16th January 2001, was correctly determined at the time in accordance with the law which was then in force. That was the law which guided the customs officers who made this seizure. It cannot be accepted as appropriate that their actions should be challenged or condemned on the basis of the law as it subsequently evolved. Nor is there any authority to support this proposition. If such a proposition were good law ( which is not the case) it would follow that every case determined in accordance with law which was subsequently amended would have to be reopened and re-examined.

It is for these reasons that we find it clearly established that the Appellants' appeal is indeed an abuse of Tribunals proceedings.

The costs of these proceedings are awarded to the Respondents as they sought in their Notice dated the 24th February 2004.

JUDGE MCKEE QC

CHAIRMAN

RELEASED: 21 October 2004

LON/2003/8150

CHAIRMAN

RELEASED:

LON/