United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2006] UKVAT(Excise) E946, [2006] UKVAT(Excise) E00946

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Goldspot Ltd v Revenue & Customs [2006] UKVAT(Excise) E00946 (21 March 2006)

EO00946

RESTORATION OF SEIZED EXCISE GOODS (22560 litres of beer) sought – passing of title considered – appeal dismissed

MANCHESTER TRIBUNAL CENTRE

GOLDSPOT LIMITED Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Elsie Gilliland (Chairman)

Alban Holden

Peter Whitehead

Sitting in public in Manchester on 10 January 2006

Christopher Wharton for the Appellant

John Gray, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

DECISION

The appeal before the tribunal was that of Goldspot Limited (the Appellant) against a decision of the Commissioners in a review letter of 24 May 2005 not to restore to the Appellant goods comprising 22560 litres of beer (the goods) which had been detained by Customs at Dover Eastern Docks on 9 February 2005 together with the vehicle in which they were being transported (not a subject of this appeal) and subsequently seized by them on 10 March 2005. The Appellant's case was presented by Christopher Wharton the company accountant and evidence under affirmation was given by Amarinder Sing Srao a director of the Appellant. John Gray of Counsel appeared for the Commissioners.

Mr Wharton drew first to the attention of the tribunal his concern that the Commissioner's bundle of documents handed in to the tribunal included documents that neither he nor his witness had seen prior to the hearing and also that some copy documentation supplied by the Appellant had not been included in that bundle even though it had previously been in the hands of the Commissioners. The additional papers of the Appellant were produced to the tribunal. It was agreed between the parties that the matter for the consideration of the tribunal was whether the Appellant had legal title to the goods. The issue as to the paperwork might not be relevant though the tribunal would bear in mind the submissions made on behalf of the Appellant. The submission of counsel for the Commissioners in this regard was that the role of the tribunal was to determine the reasonableness of the review decision.

The Commissioners had stated that the goods had been carried on an articulated truck and trailer driven by a James Benfield who did not agree to give a voluntary interview to Customs at the time he was stopped though he did say that his "boss" was a Ray Westhorpe. The work was a sub-contract for Rightstone Traction.

Mr Srao gave evidence as to the circumstances. He told us that he on behalf of the Appellant had agreed to purchase the goods after discussion with a Mr Dhariwal of Hollandwest Limited of Hall Green Birmingham. The goods were in Calais and Mr Dhariwal already had a transport facility in place. It was necessary however for the Appellant to set up a bond account in Calais and this was opened with M.T. Manutention at Coquelles. Mr Srao was insistent that the goods had in fact been transferred to the Appellant in Calais as that was the clear arrangement between Mr Dhariwal and him. Accordingly he claimed that the goods should be restored to the Appellant even though as he confirmed to the tribunal the Appellant had not made any payment for the goods. The goods would not have been paid for until 14 days after delivery following the usual business procedure and indeed by then the goods might already have been sold on. When a few days had passed without the goods arriving he had thought there must be something wrong and then found that the goods had been seized. The Appellant had still not made any payment and although thus there was no financial loss to his company Mr Srao was concerned to protect his own business reputation; and there might be a counter-claim and he wanted to know who the "culprit" was.

So far as the paperwork available to the Commissioners was concerned Mr Srao in his evidence under cross-examination confirmed that the Commissioners had at the time of the appeal every document that the tribunal had seen at the hearing. As counsel pointed out however this was clearly not the case with regard to the letter from Hollandwest Limited dated 8 June 2005 by way of confirmation that title to the goods had been earlier transferred. Whilst this was accepted by Mr Srao he said that his statements had already shown to the Commissioners when title had been transferred and the accounts also.

The Appellant's separate bundle comprised 7 separate sheets and also the letter from Hollandwest Limited dated 8 June 2005 referred to above. The first page was a copy fax from Goldspot Limited of "1+5 pages" said to have been sent to " Mrs Savage - Customs and Excise" on 10 March 2005 and with a fax number shown. It was said to follow a telephone conversation with her of the previous day and was forwarding " the sequence of events and the information as requested". There followed a page of chronology which at the bottom stated that the invoice from Hollandwest Limited was awaited and asking Mrs Savage after checking the documents to release the goods as the Appellant believed that everything had been done correctly. The following pages as presented to us are out of sequence as far as the dates are concerned. The next sheet was a copy of a fax from Goldspot Limited dated 31 January 2005 to Neil Austin - Calais. Alongside that in manuscript had been inserted "Mt. Manut". The information for setting up a bonded account was set out. It was not clear to us when the handwritten addition had been made. The next page was a copy fax from Goldspot Limited dated 7 February 2005 to M.T. MANUT-CALAIS. In handwriting at some stage had been added the word "Neil" and some addition to the fax and telephone numbers. That fax referred to a conversation and the information supplied was of the U.K. Bonded Warehouse that the Appellant would use being Edwards Beers and Minerals Limited of Leighton Buzzard. The goods were as described in the appeal and the supplier was stated to be Hollandwest Limited with their address at Hall Green Birmingham given. The next page was a copy fax from Goldspot Limited dated with the earlier date of 27 January 2005 addressed to Edwards Beers and Minerals Limited. Again this referred to a telephone conversation and it requested the release of stock (being the goods the subject of the appeal). The name of the transport company given was Rightstone Traction and Hollandwest Limited of 188 School Road Hall Green Birmingham was named as the customer to whom the stock was to be released. Authority was given in this fax to use the Appellant's Vat number and duty deferment number on only 1 load (1880 cases reference 434/001). Also added was "We will send the authority letter to use our deferment number each time we ask you to process the order for us with our unique reference number". The subsequent sheet was a copy letter which was undated but which we were told by Mr Srao would have been dated 3 February 2005. This also referred to a conversation and was it appeared from Mr Dhariwal to Mr Srao:

"Dear Amarinder,

Further to our conversation, please be informed that I will notify yourselves when I have placed my goods in Mt.Manut, France. Then can you please forward your necessary reds details, in order to release the goods. Thereafter I can inform the transport company to collect the goods."

We noted that the position of the Hollandwest Limited name and address had been typed where one would normally expect to find the recipient name and address and the Appellant's name and address was in the usual position of the sender. All was typed. This was not headed notepaper. The company number and Vat number of Hollandwest Limited were typed in at the foot of the letter. There were also some indistinct fax markings on our copies. The seventh sheet before us was a copy letter again not on letter headed paper set out as the last with the typed names and addresses in the same places. This was undated but Mr Srao believed that its date was 27 January 2005. In it Mr Dhariwal confirmed to Mr Srao that he had placed the goods in mt.manut, France and asked Mr Srao to send his reds details to them for the goods to be released. He stated also that the freight forwarders that he would be using were Rightstone Traction. The email and telephone and fax numbers were added in addition to the company and vat numbers on this letter. Finally with this bundle was a copy of the letter dated 8 June 2005 referred to above and set out in full below. This was different from the other letters said to have been sent by Hollandwest Limited as the heading was printed not typed and in a different position on the page and two Premier Pils motifs were printed on the page.

Although David Harris the review officer was not at the hearing to give evidence in person he had stated clearly in his witness statement dated 13 September 2005 (to which no objection was made) that in making his decision he had referred to a letter from the Appellant of 12 April 2005 enclosing the invoice for the goods from Hollandwest Limited dated 11 March 2005. It was after a request from the Commissioners for further evidence dated 5 April 2005 that the copy invoice was sent. No reference was made by the review officer to any of the documentation within the Appellant's bundle. Mr Harris mentioned also his handwritten file note of a telephone conversation with Mr Srao dated 24 April 2005 when he was still looking for evidence of title. The Notices of seizure had been sent by the Commissioners to all the parties who were involved in the transaction as they did not know at that stage who had title. In the review letter the subject of the appeal no indication was given by the officer that he could have seen the papers which were produced as having been sent to Mrs Savage. Nor has any information been supplied by the Appellant as to who Mrs Savage was nor how contact had been established with her and in what role she was said to be requesting information. Counsel has been unable to assist the tribunal with any further information as to what additional paperwork could have been available to the review officer. We note that no correspondence was addressed by the Appellant to the effect that the review letter had ignored substantial documentation supplied and indeed in the grounds of appeal set out in the Notice of Appeal dated 10 June 2005 the Appellant stated that: "We can provide further evidence that we are the legal owner of the goods which clear up the issue. We believe that is the only outstanding reason for denial of restoration".

In the Appellant's paperwork before the tribunal counsel for the Commissioners drew our attention to the copy invoice dated 11 March 2005 from Hollandwest Limited. This was for a quantity specified as a total of 1880 mls. of beer at the price of £10225 and that describes the goods. At the bottom of the invoice was printed the following as a standard term of the invoice: "The goods remain the property of Hollandwest Limited untill (sic) paid in full. Discrepancies must be notified within 24 hours". Mr Srao accepted in evidence that this clause had not been deleted on the face of the invoice but he insisted that by telephone agreement between Mr Dhilwali and him at the time the deal was brokered it was agreed that title would pass to the Appellant in Calais and that the transfer of title in this case would not await payment. Further on this point Mr Srao referred to the copy letter in the Appellant's bundle from Hollandwest Limited. This was the letter dated 8 June 2005 mentioned above which had not been available to the review officer when he made his decision. The letter addressed to Gold Spot Limited reads:

"Dear Sirs,

We have transferred the ownership of the goods to Gold Spot under bond in Calais and offered to transport the goods to UK bond by our known carrier which we have agreed. We also agreed that you would pay for the good (sic) Fourteen Days after delivery. I refer to Invoice No. 200301 dated March 11^th 2005 and quiet (sic) forgot about the rider on the bottom of the invoice which should have been deleted. I hope this clears the matter of ownership.

Yours Sincerely,

(signature)

H.Dhariwal "

The role of the tribunal is to test the reasonableness of the decision of the Commissioners. In exercising their power the Commissioners must comply with the Wednesbury principles and take into account all relevant matters not give weight to irrelevant matters and apply the law properly. The Commissioners did not consider that the Appellant had established a paper trail demonstrating title to the goods. We do not accept that the several sheets of paper constituting the Appellant's additional papers had in fact been seen by the review officer.

Having heard and read the evidence of the Appellant's witness we are not satisfied that the title in the goods ever passed to the Appellant. The contemporaneous document of the invoice indicates that they did not. Property normally passes on the sale of specific goods on payment though it is the case that property can pass before payment if the parties so agree. In the copy invoice of 11 March 2005 it was clearly stated that that property would not pass until payment. The Appellant relies on the document dated 8 June 2005 on Hollandwest Limited's letterhead saying that the reference on that invoice was an error and should have been deleted and that payment would be 14 days after delivery. This letter was however not written until after the series of events had taken place. It had not been available to the review officer. No explanation has been given in the letter or elsewhere as to why this normal standard term should be varied. We see no reason why Hollandwest Limited would wish to give up title without receiving payment. The inference we draw is that at all material times the goods were to remain the property of Hollandwest Limited.

We have noted further the authority to Edwards Beers and Minerals Limited in the fax dated 27 January 2005 for the release of the 1880 cases of stock to "the below mentioned customer" named as Hollandwest Limited. This accords also with the first paragraph of the statement of events submitted by the Appellant. Hollandwest Limited was not WOWGR registered and the essence of the arrangement in our view was that the Appellant was providing its Reds facilities and the benefit of its duty deferment number for this one transaction to Hollandwest Limited. This would point also to title not passing even though the Appellant set up a bonded account with Mt. Manut.

It is clear in our opinion that the review officer did not see the evidence produced at the hearing by the Appellant when making his decision but as we have indicated we do not consider this makes any difference. The issue is one of title which we are satisfied did not pass. The decision was reasonable and was properly made.

The appeal is dismissed.

The Commissioners have not sought costs and we make no direction as to costs.

ELSIE GILLILAND

CHAIRMAN
Release Date: 21 March 2006

MAN/05/8028