United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2008] UKVAT(Excise) E1084, [2008] UKVAT(Excise) E01084

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Ronald William Parker v Revenue & Customs [2008] UKVAT(Excise) E01084 (24 January 2008)

E01084

EXCISE DUTY – restoration of goods – motor vehicle used to carry seized tobacco – appeal dismissed.

MANCHESTER TRIBUNAL CENTRE

RONALD WILLIAM PARKER Appellant

and –

HER MAJESTY'S COMMISSIONERS OF

REVENUE AND CUSTOMS Respondents

Tribunal: Richard Barlow (Chairman)

John Lapthorne FCMA

Sitting in public in Birmingham on 16 October 2007.

The Appellant in person.

Mr James Puzey of counsel for the Respondents.

DECISION

This appeal concerns a decision made by the commissioners on 13 November 2006 by which they reviewed and upheld their earlier decision of 19 April 2006 not to restore to the appellant a Mitsubishi Legnum motor car (registration P689 JNU) which had been seized from a Mr M J Bennett on 4 November 2005 at Coquelles.

The motor car had been seized under section 141 of the Customs and Excise Management Act 1979 because it was used for the carriage of things liable to seizure namely 30.5 kilos of hand rolling tobacco, 400 cigarettes and 1 litre of spirits. We were told that Mr Bennett had required condemnation proceedings to be instituted, though whether they were actually formally instituted is unclear, but in any event by a letter dated 23 January 2006 he said that he did not wish the matter to be referred to the County Court and that was taken as an indication that he did not wish to pursue the condemnation proceedings, which would have been in the Magistrates Court or the High Court in fact. Certainly no such proceedings were adjudicated upon by any Court.

The review decision under appeal was a further review directed by the tribunal at the respondents' request because the appellant had provided additional information after he had appealed to the tribunal about an earlier review which had also led to the refusal to restore the vehicle.

The decision under appeal concerns an "ancillary matter" as defined in section 16(8) of the Finance Act 1994 and is a decision falling within paragraph 2(1)(r) of Schedule 5 to that Act. The decision under review relates to the Commissioners' discretionary power provided by section 152 of the Customs and Excise Management Act 1979 to restore goods after seizure and forfeiture.

The effect of section 16(4) of the Finance Act 1994 is that the tribunal can only allow an appeal in a case like this if it is satisfied that the Commissioners' decision was one that they could not reasonably have arrived at.

It is established by authority that the tribunal can make findings of fact and determine the issue of reasonableness in light of those facts as well as examining the basis on which the commissioners acted.

Where, as here, goods have been seized and have been condemned as forfeit by lapse of time in the absence of any determination by a Court in condemnation proceedings the tribunal cannot re-examine the question of forfeiture, as such, but the tribunal can examine the issues relevant to the reasonableness of the refusal to restore the goods and make findings about it as long as to do so would not be an abuse of process or something akin to that by the appellant.

We assume that the seizure of the cigarettes and the spirits was on the basis that those goods were found with the hand rolling tobacco and, as that seizure has not been challenged, those goods must be taken to have been properly seized, though clearly it was really the hand rolling tobacco that gave rise to the seizure of the motor car.

The circumstances of the seizure were that Mr Bennett arrived at Coquelles carrying the excise goods in question after a very short trip to the Continent. He had with him a passenger, Mr Elson. They had left the UK about 9 am having travelled from Burton on Trent. They were stopped and were being questioned by the respondents' officer by 1.50 pm. They readily admitted they had gone to Adinkerke in Belgium to buy tobacco but claimed it was for their own use.

During the course of the interview Mr Bennett, who had been driving, said the motor car was his and that he had owned it for 18 months and that no-one else had the use of it to drive it abroad. Later, in the context of asserting that the tobacco was for his own use, he said that there was no way he would risk losing his car and his livelihood. On 7 November 2005 Mr Bennett wrote to the commissioners requesting the return of the motor car and said that its retention was starting to create hardship and that he could not properly carry on his business and that he had had to lay off two of his workmen. Those statements were completely untrue at least if the evidence the appellant gave is to be believed. Mr Bennett and the appellant are partners in a building business and the appellant told us that Mr Bennett does not own a motor car but rather uses a tipper lorry to get about and for business purposes but that he, the appellant, owned several cars and allowed Mr Bennett to use the Mitsubishi when he needed it. The appellant made no claim that the business was affected by the seizure of the Mitsubishi and indeed claimed that its main use was for taking his dog about. He said he used that car for that purpose so that his other cars did not become muddy.

On 23 January, in the letter already referred to, Mr Bennett asserted to the commissioners for the first time that the car actually belonged to his business partner.

The first question we have to decide is whether the appellant is the owner or at least a part owner of the motor car as otherwise he would have no claim to have it restored to him and the appeal would fail on that ground. However, the evidence is not as clear as might be expected.

The appellant is a director of a company called Barrowfield Autos Ltd which is a motor dealer. He told us that his role in that company is limited to keeping its business records. He asserted that he had bought the Mitsubishi from that company and produced a used car invoice from Barrowfield Autos Ltd dated 14 December 2004 in the sum of £5264.50, a cheque book stub number 100277 with "£5,000", "Barrowfield" and "14/12" written on it and a bank statement from his account showing that the cheque of that number for that amount cleared form his account on 17 December. Mr Parker said the extra £264.50 was paid in cash. He also produced an invoice addressed to him for the fitting of an immobiliser on the Mitsubishi.

The respondents did not accept that evidence as proof that Mr Parker owned the vehicle because the DVLA documents show that Barrowfield Autos were the registered keeper of the vehicle and that that company had only acquired it on 19 December so that it could not have been sold to the appellant on 14 December. Mr Parker could not explain that discrepancy. Mr Puzey also argued that it would be unusual for a motor dealer to register itself as the keeper because that would increase the number of previous owners when the car was sold which would be detrimental as far as the second hand value is concerned.

The appellant claimed to have sent details of the change of keeper to the DVLA but had then overlooked the fact that nothing came back from the DVLA. Mr Puzey was able to point out that the part of the registration certificate by which Mr Parker would have made that notification was still attached to it.

Mr Parker also produced a certificate of motor insurance. It was a motor trade policy and as such it covered him to drive any vehicle owned by him or held on trust by him or in his custody or control for motor trade purposes. Whether Mr Parker was entitled to a motor trade policy simply because he was a director of a motor dealer we do not know but what is certain is that Mr Bennett was named as a policyholder jointly with Mr Parker and subject to the same conditions. In order to be insured to drive the Mitsubishi Mr Bennett would therefore have to own the vehicle or have it in his custody or control for motor trade purposes. Mr Bennett had no connection with the motor trade. He was probably not entitled to be a policyholder but even if he was it would have to be because the vehicle was his property. Mr Parker claimed in evidence that he had not seen that Mr Bennett was named on the insurance certificate until that was pointed out to him by Mr Puzey. We find that to be an untrue statement. He said he did not know why Mr Bennett was on the certificate as a policyholder. We find that to be an untrue statement. Mr Bennett's name could only have been there if Mr Parker arranged for it to be so.

Mr Parker admitted that he had taken out the motor trade insurance because it was cheaper than insuring his several vehicles in the normal way and also, he claimed, because it was very convenient because a vehicle would be covered when he changed a vehicle without the need to notify the insurers.

On balance we find that Mr Parker did have at least a sufficient proprietary interest in the vehicle to entitle him to appeal. The paperwork had not been correctly dealt with but as Mr Parker is a director of Barrowfield Autos he could have corrected that whenever it became necessary and we accept that the evidence shows that he had paid for the car.

On balance we do not find that Mr Bennett also had a proprietary interest in the car. The insurance document was the only document that suggests he had and, although that appears to have been used for a dishonest purpose, that purpose was to secure insurance on advantageous terms that he was not entitled to.

That insurance was needed because Mr Bennett did drive the car. Mr Parker said that Mr Bennett had a key for his house and they had an arrangement whereby Mr Bennett borrowed one of Mr Parker's cars when he needed one.

Mr Parker sought to minimise the degree to which Mr Bennett used the car but we find his evidence to be unreliable in that respect. We find it incredible that Mr Bennett would habitually drive around in a tipper lorry when Mr Parker was prepared to allow him the use of one of his cars. No doubt he may have driven to and from work in the lorry but we are satisfied that he had a reasonable amount of use of the car on other occasions.

In evidence Mr Parker explained that he had given Mr Bennett permission to use the car on the occasion in question but that he had not known Mr Bennett intended to go to France and that when the car was seized he left it to Mr Bennett to sort it out. He then added:

"I trusted him not to bring an excessive amount of things back. The goods were only 40% his.

The other man had been doing it regularly.

I trusted him (referring to Mr Bennett) that he would not do it.

I am pretty sure I did not know he was going to bring things back but if I had known he was going to go I would have trusted him not to bring too much back".

These comments were added to his evidence by Mr Parker after he had been questioned and it appeared to us that they came out as unguarded but true statements.

The statement that he trusted Mr Bennett not to bring too much back is completely inconsistent with what had gone before in Mr Parker's evidence, which was that he did not even know Mr Bennett was going to the Continent let alone that he was going there to buy "things". The reference to trusting him "not to do it" is also significant.

Mr Bennett attended the tribunal with Mr Parker and although his name had been given to the tribunal clerk as a witness before the hearing commenced Mr Parker did not call him as a witness.

After the car was seized Mr Parker said in a letter that what Mr Bennett had done could "hardly be considered as a serious breach of the regulations". We regard that as relevant to considering what Mr Parker's attitude to Mr Bennett continuing to use the car might be if it is returned to him.

Mr Parker had also offered, in another letter, to buy the car or pay a fine so that the car could be returned to him which is inconsistent with his claim before us that he was wholly innocent of any wrongdoing. That is also reinforced by the evidence referred to in paragraph 22.

We find that although Mr Parker owned the car he knew Mr Bennett was going to the Continent to buy tobacco and at the very least was careless as to whether he might buy excessive quantities. We also find that if the car is restored to Mr Parker he is likely to allow Mr Bennett to continue to use it. Both of those facts are ones that the Commissioners could reasonably and did take into account when considering restoration and we hold that the decision not to restore the vehicle was reasonable in light of the facts as known to the commissioners at the review and in light of our findings of fact.

The appeal is therefore dismissed.

Mr Puzey did not ask for an award of costs and we make no order. That does not affect the order previously made at an earlier hearing and we have already made a separate direction about an application that has been made concerning that award.

CHAIRMAN

RELEASED: 24 January 2008

MAN/06/8057