United Kingdom VAT & Duties Tribunals (Excise) Decisions

EO00942

EXCISE — commercial importation of tobacco — vehicle belonging to traveller's father — offer of restoration on terms — hardship — reasonableness of Respondents' decision

MANCHESTER TRIBUNAL CENTRE

JAMES LIVINGSTON-CAMPBELL Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Lady Mitting (Chairman)

John Lapthorne FCMA

Sitting in public in Birmingham on 2 February 2006

The Appellant appeared in person

Miss Claire Chapman, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2006


 


DECISION

1. Mr James Livinsgton-Campbell appeals against the decision of the Commissioners, taken on review and notified to him by letter dated 16 June 2005 to offer only conditional restoration of a Peugeot Panel van registration R956 Y0V seized on 3 April 2005.

2. We heard oral evidence from the Appellant and from his son, Mr Michael Campbell. The Respondents called no evidence, a witness statement of the review officer, Ms Helen Belinda Perkins, having been served and not challenged.

   The Evidence

3. Michael Livingston Campbell was intercepted at Dover Eastern Docks on 3 April 2005. He was driving the Peugeot van referred to above. On initial questioning, Mr Campbell stated that he was returning from Moers in Germany with a load of polystyrene for which he produced a CMR and an invoice. He told the intercepting officer that he had no tobacco goods or alcohol on him other than a pack of 20 cigarettes.

4. On inspection of the vehicle, officers found 58 kilograms of hand rolling tobacco, 5,000 cigarettes and 80 cigars. On interview, Mr Campbell confirmed that the goods belonged to him; he had no receipts for them, he had paid cash for them with the aid of a bank loan of £4,000. He confirmed that he had fabricated and forged the documentation initially produced to the officers; that this was the first time he had ever undertaken a venture such as this and when asked what he was going to do with the goods, he replied "smoke them, sell them on, you know what I was going to do with them".

5. Being satisfied that this was a commercial importation, officers seized both the goods and vehicle.

6. In interview, Mr Campbell had told officers that the vehicle belonged to his father, the Appellant, and by letter dated 5 April 2005, the Appellant wrote to the Respondents requesting the return of his vehicle and stating that he had loaned the vehicle to his son to go to Scotland and had known nothing of the trip abroad. He enclosed a copy of the registration certificate of the vehicle in the name of James Livingston Campbell and a copy of the insurance certificate for it, in the name of Jim Campbell.

7. The Respondents then invited the Appellant in for interview, which he attended on the 10 May 2005. In interview, the Appellant told officers that he had been the owner of the vehicle since 8 March 2002; his children had bought it for him; he parked it in his front garden where his eight children all had entirely free access to it for "general run around purposes". The children were all fully comprehensively insured under their own policies to drive the vehicle; on this occasion, his son Michael was using the vehicle to go to and from work and to travel to Scotland and he did not know how long his son would have it for. He explained that who drove the car was determined on the basis of "if its there, they can have it, if it is not they can't". He stated that he did not know his son would be travelling abroad to purchase excise goods and that he was shocked to find out what he had done.

8. By letter dated 11 May 2005, the Respondents offered restoration of the vehicle to the Appellant on payment of a restoration fee of £1,825. This was the value put on the vehicle by the Respondents, the duty evaded having totalled £6859.01.

9. By letter received 20 May 2005, the Appellant requested a review of that decision, stating again that he was not aware that the vehicle was being used to go abroad or to smuggle in contraband. He went on to say that the van was his only means of transport and as a pensioner he would find it difficult to raise £1,825.

10. The review was undertaken by Ms Perkins, her letter being dated 16 June 2005 and upholding the offer of conditional restoration. In her letter, Ms Perkins outlined the Respondents' policy for the restoration of private vehicles, the relevant section of which was that vehicles could be restored at the discretion of the Respondents if the vehicle was owned by a third party who was not present at the time of seizure and was either blameless or had taken reasonable steps to prevent smuggling in the vehicle. Ms Perkins went on to say that the Respondents would consider restoring seized motor vehicles "to owners who were not present at the time of seizure and could show that they were either innocent and blameless or innocent but blameworthy" (Ms Perkins italics). Ms Perkins took into account the contents of the interview and letters from the Appellant and concluded that the Appellant had voluntarily consented to the vehicle being used by his son; the Appellant had chosen not to impose any terms or conditions on the use of the vehicle by his children; the vehicle appeared to have been treated as a family vehicle being readily available to all of them. In view of these factors, Ms Perkins concluded that the Appellant was "not wholly innocent or blameless" and must bear some responsibility for the loss of the vehicle.

11. Secondly, she considered that restoration of the vehicle to the Appellant would be tantamount to restoring it to his son.

12. Thirdly, she considered hardship. Ms Perkins had searched official records and had found, or so she thought, that the Appellant was the registered keeper of a Ford Fiesta vehicle and the Peugeot van was not therefore his sole means of transport. In view of this, and also in view of the fact that considerable inconvenience was only to be expected as a consequence of having a vehicle seized, Ms Perkins concluded that the Appellant had not sustained exceptional hardship.

13. Fourth, she stated that the restoration fee of £1,825 was entirely proportionate and equitable given the value of the revenue evaded.

14. For all these reasons she refused to vary the original decision.

15. On receipt of this letter, the Appellant wrote to the Respondents advising that the Ford Fiesta did not belong to him but to his son, James Livingston Campbell. With this letter, the Appellant enclosed a copy of his son's driving licence which was in the name of James Andrew Livingston Campbell; the hire purchase agreement on the Fiesta which was in the name of James Campbell and the registration certificate for the vehicle, also in the name of James Campbell at 15 Asplin Road, the Appellant's home address. There matters lay until the hearing before the tribunal.

16. In evidence to the tribunal, the Appellant told us that the Fiesta belonged to his son, James. James always used the Appellant's home address for official correspondence because the address at which he and his girlfriend lived was blacklisted due to some criminal activities of the girlfriend's brother. To further demonstrate that the Fiesta was not his, despite the similar names, he referred us to a copy of his own signature and the copy of his son's signature on the HP agreement. The signatures were, in his submission, so different as to demonstrate that they did not belong to the same person. He, the Appellant, had never used the Fiesta and it had never been open to him to do so.

17. He explained that the van was his only vehicle which he used for everything. He travelled in it all over the country, with a folding bed in the back enabling him to sleep in it. Without the vehicle, he was unable to travel up to Scotland to see his grandson and the remainder of his family as he could not afford the public transport fares.

18. The Appellant explained that he had first call on the vehicle but if he was not using it, then it was available to all the children on a first come, first served basis. The keys were kept in his house, to which all the children had a key. They would go in and help themselves if the vehicle was there. They did not have to ask him first although they would normally tell him. If they had not been able to speak to him, they would merely leave him a note telling him that they had taken it. As examples, he told us his daughter had on one occasion had it for a month when her own vehicle was off the road and his granddaughter's boyfriend had also used it for three weeks when his vehicle was off the road. On this occasion, Michael had had it for some three weeks because his own car was being repaired and he needed it to go back and forth to his work as a lorry driver.

19. Michael had also told his father that he was going to be using it to go up to Scotland. He himself had not needed the vehicle at all during the three weeks which Michael had had it as he was within walking distance of the shops and the working men's club and his daughter took him to bingo each Tuesday night. He had never sought to impose conditions on the children's use of the vehicle. It was accepted by all of them that if they caused any damage to the vehicle, they would pay for it and that they would each be responsible for settling any fines or penalties arising out of traffic infringements.

20. It was Miss Chapman's case that the Fiesta did not belong to the Appellant's son but to the Appellant himself and she questioned him at some length on his correct name. The Appellant explained that he had been born James Livingston-Campbell but, whilst in the forces, he had dropped the double barrel name, used Livingston as a middle name and had adopted the name James Campbell, or Jim Campbell. He did in fact have two sons called James, one of whom was James Andrew, who owned the Fiesta and all his children had the name Livingston as one of their middle names. Of his eight children, seven lived nearby and one in Scotland. None of them lived at home with him.

21. Michael Campbell, in evidence, in answer to the question as to how he treated the van, replied that if he needed it, he used it. On this occasion, his was off the road being repaired and he had use of the van for as long as he needed it although if his father had let him know during that time that he needed it, he would have returned it to him. It had been entirely his idea to travel abroad and purchase the tobacco, his father knowing nothing of it. He had fabricated the trip to Scotland to mask the mileage to France. He readily admitted that his importation had been illegal.

    Submissions

22. Miss Chapman contended that this vehicle was a family vehicle at the beck and call of all of them. The Appellant could have imposed conditions on its use but did not. In allowing the family free use of the vehicle, the Appellant must accept responsibility for what they used it for. It was her case that the Ford Fiesta belonged to the Appellant and he was not therefore dependent on the van as his sole vehicle but even if he had been, he had not been caused considerable hardship in view of the fact that the vehicle was frequently used by others for quite considerable periods of time. It was her submission that there was no excessive hardship.

23. The Appellant made no closing submissions, other than to ask us to take into account all that had been said in evidence and in his correspondence.

    The Tribunal's Jurisdiction

24. The tribunal cannot order restoration of the vehicle or alter the terms upon which restoration has been offered. We are permitted only to consider the reasonableness of Ms Perkins' decision. In so doing, we consider whether there were any facts which she omitted to take into account or anything which she considered which she should not have done. Whether she gave excessive weight or insufficient weight to any particular matter or whether she made any error of law. If we find her decision to have been reasonable, then the appeal fails. If we find her decision to have been unreasonable, we are then limited to directing that a further review should be carried out although we would expect any such review to take into account any findings which we as a tribunal make.

    Conclusions

25. It was not suggested by Ms Perkins in her review or by Miss Chapman that the Appellant had any prior knowledge of his son's actions but, for the avoidance of doubt, we should record that we find as a fact that the Appellant was not a party to the venture; was entirely unaware of the use to which his son was planning to put the vehicle and would not have allowed it had he known of it. We should also, at this stage, just record that Michael Campbell's act was a deliberate and calculated illegal commercial importation of a substantial amount of tobacco, masked by the fabrication of false importation documentation tendered to the intercepting officers. The decision to offer only conditional restoration must be seen in this light.

26. Putting to one side the question of hardship, Ms Perkins seems to have refused unconditional restoration for two basic reasons, one being the Appellant's failure to impose conditions on his children's use of the vehicle and the other that, given Michael's unrestricted use of the vehicle, restoration to the Appellant would be tantamount to restoration to Michael.

27. Looking at the first of these reasons, we do not think that Ms Perkins' view is entirely appropriate or practical. The Appellant was dealing with seven adult children, whom he trusted. We accept his evidence that it did not occur to him to tell them not to use the vehicle to break the law and equally, he had no reason to believe that they were going to travel abroad and would not think therefore of prohibiting it.

28. We are not entirely certain what "innocent but blameworthy" implies. Ms Perkins was not in court for us to ask but from the terms of her letter, we think she means that the Appellant was innocent in the sense that he was not a party to the importation but blameworthy in that by allowing his son unrestricted use of the vehicle, he had in some way contributed to what his son did. To quote from her letter:

    "… I am satisfied that you failed to establish any conditions on the vehicle or your son in relation to its usage or his trip to the continent and you must therefore accept some of the responsibility for its subsequent loss. I do not therefore consider you to be wholly innocent or blameless in this matter".

29. Ms Perkins in fact appears to be going beyond finding the Appellant innocent but blameworthy by suggesting that he was not only blameworthy but not wholly innocent either. We believe it unreasonable of her to hold the Appellant partly responsible for the loss of the vehicle because he had such trust in his son he did not forbid him from acting in such a way that it had never occurred to him he would act.

30. However, we find Ms Perkins to be on much stronger ground with her second reason that restoration to the Appellant would be tantamount to restoring it to Michael. If we look at the status of the vehicle, it is nominally owned by the Appellant, as it is registered in his name, but it was purchased by his children as, to all intents and purposes, a family runabout. The Appellant insures only himself to drive it, the children being covered under their own policies. The children, including Michael, have free access to the vehicle, limited only by the Appellant having first call on it. They do not have to ask if they can "borrow" it; they merely collect the keys and drive away. They use the vehicle as a right, they are all entitled to drive it. Unconditional restoration to the Appellant would enable Michael once again to share the unfettered free access to the vehicle he has always enjoyed. After all, he contributed to its purchase. Ms Perkins' desire to prevent this happening is in our view entirely reasonable and it is certainly a reasonable, and indeed essential, factor to consider in the restoration of the vehicle to refuse unconditional restoration is therefore, for this reason, reasonable.

31. Looking at the question of hardship, central to Ms Perkins case that there was no exceptional hardship was her belief that the Appellant owned the Fiesta and indeed it remained the Respondents' case before the tribunal that this was so and that the James Campbell on the HP Agreement and the registration certificate were one and the same as the Appellant. This view was strengthened by it being the Appellant's address on all the Fiesta purchase documentation. We reject this contention. We accept Miss Chapman's comment that we are not handwriting experts but to our untutored eye, the signature on the HP Agreement is not that of the Appellant. In addition, we did of course have his oral evidence. We found him to be an honest and straightforward witness and when he told us that the Fiesta belonged to his son, James Andrew Livingston Campbell, we believed him. He offered a perfectly feasible explanation for the use by James of his, the Appellant's, home address. Determinative to us of the truthfulness of the explanation about the address is that on the driving licence, which is undoubtedly that of James Andrew Livingston Campbell, it is also the Appellant's home address which is used. We believe, and find as a fact, that the Appellant did not own the Fiesta but that it belonged to his son, James.

32. Ms Perkins gives no other reason in her letter for rejecting the hardship plea other than to say she does not consider the hardship exceptional or beyond what one would normally suffer when one's vehicle is seized. Ms Perkins can, of course, not be blamed for misunderstanding the position over the ownership of the Fiesta given that the registered name and registered address appeared to her to be those of the Appellant. However, the misunderstanding is critical and is fundamental to the conclusion which she formed on the question of hardship. It must therefore, render her decision flawed and thus unreasonable. We, as a tribunal, are unable to say that Ms Perkins decision would inevitably have been the same had she known of the correct ownership and we must therefore allow the appeal.

33. In line with our jurisdiction therefore we allow the appeal and direct that a further review on the issue of hardship only be carried out. Such a review should be undertaken within six weeks of the date of release of this decision by an officer who has had no previous involvement with the case.

34. There was no application for costs and we make no order.

    LADY MITTING

    CHAIRMAN
    Release Date: 20 February 2006

    0MAN/05/8035