[2012] UKFTT 395 (TC)
TC02079
Appeal number: TC/2011/01303
EXCISE DUTY – Vehicle
seized and condemned as liable to forfeiture under CMA – restoration appeal –
Tribunal confined to considering the reasonableness of UKBA’s decision to
refuse restoration following HMRC v Jones and Jones – whether
exceptional circumstances existed which rendered that decision unreasonable –
held there were none – appeal dismissed
FIRST-TIER TRIBUNAL
TAX CHAMBER
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BEVERLEY DENNETT
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Appellant
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- and -
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DIRECTOR OF
BORDER REVENUE
UK BORDER AGENCY
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Respondents
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TRIBUNAL:
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JUDGE JOHN WALTERS QC
MRS ELIZABETH BRIDGE
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Sitting in public in Norwich on 27 February 2012
The Appellant appeared in
person with Mr S Dennett
Rebecca Wastall, Counsel, for
the Respondent
© CROWN COPYRIGHT
2012
DECISION
Introduction
1. The
appellant, Mrs Beverley Dennett, appeals against a decision communicated to her
in a letter (“the Decision Letter”) dated 20 January 2011, being the decision
of Officer D C Hodge, Review Officer of the UK Border Force, that her Renault
Clio, registration number AP08 LOJ (“the Vehicle”), which was seized under
section 139(1) Customs and Excise Management Act 1979 (“CEMA”) on 18 September
2010, should not be restored. The Decision Letter gives the date of the
seizure as 6 December 2010 and this error was repeated in the Statement of Case
filed for the respondent (“the Director”) on 20 April 2011.
2. The
Decision Letter confirmed a decision of Officer H Govier of the UK Border
Agency National Post Seizure Unit, communicated to Mrs Dennett in a letter
dated 7 December 2010, that the Vehicle would not be restored.
3. The
Vehicle had been used to import 38.5 kilograms of hand rolling tobacco (“the
Excise Goods”), attracting £4,989.22 in excise duty. The Excise Goods were
seized as well as the Vehicle.
4. When the
Vehicle and the Excise Goods were seized, a ‘Seizure Information Notice’ and
Customs Notice 12A (‘Goods and/or vehicles seized by Customs’) were issued to
Mrs Dennett. Notice 12A explains that the legality of a seizure may be
challenged in a Magistrates’ Court by sending the UK Border Agency (“UKBA”) a
notice of appeal within 1 month of the date of the seizure, or of the date of a
notice of seizure. Mrs Dennett did not challenge the legality of the seizure
in this way (and indeed her intention not to contest the legality of the
seizure was explicitly stated in her solicitors’ letter dated 11 October 2010 –
see below) and the Excise Goods and the Vehicle were, in consequence, condemned
as liable to forfeiture under paragraph 5, Schedule 3, CEMA.
5. The
jurisdiction of this Tribunal on an appeal against a decision not to restore a
vehicle is conferred by section 16, Finance Act 1994 and is limited to considering
whether the decision could not have been reasonably arrived at. In that
consideration, this Tribunal has no power to re-open and re-determine the
question of whether or not the Vehicle has been lawfully seized or forfeited
and condemned (Commissioners for HM Revenue and Customs v Jones and Jones [2011] EWCA Civ 824, paragraph 73).
6. Implicit
in the seizure, forfeiture and condemnation of the Vehicle is the decision that
the attempted importation of the Excise Goods, using the Vehicle, was for a
commercial purpose and that the Excise Goods were not intended for ‘own use’ by
Mrs Dennett or family and friends on a non-commercial basis. Whether or not
this was the case in fact is therefore not a matter which it is open to this
Tribunal to re-examine or decide in this appeal.
7. What we
must decide is whether the decision not to restore the Vehicle was reasonable,
given that the Vehicle must be taken to have been lawfully seized and condemned
as liable to forfeiture.
8. We heard
oral evidence from Mrs Dennett, her husband Mr Steven Dennett, Officer Matthew
Castle-Turner and Officer Deborah Hodge, the review officer who was the author
of the Decision Letter. We also had before us a bundle of documents including
witness statements made by Officer Castle-Turner and Officer Hodge. From the
evidence as a whole we find the following facts.
The
facts and submissions
9. Mr and
Mrs Dennett went to France and Belgium, using the Vehicle, on 18 September
2010, with the intention of buying wine and tobacco.
10. They called at Adinkerke in Belgium where they purchased the Excise Goods. This took them so long that they did not
have time to visit Calais, where they had intended to buy wine. Instead they
went straight back to the Eurotunnel terminal at Coquelles.
11. There they were stopped by UK officer and directed into a garage, where Officer Castle-Turner questioned them. They
opened the boot of the Vehicle at Officer Castle-Turner’s request, at which
point Officer Castle-Turner identified a substantial amount of tobacco.
12. They were separately
interviewed by UK officers. Officer Castle-Turner interviewed Mrs Dennett.
13. After the interviews Officer
Castle-Turner advised Mrs Dennett that he was going to seize the Vehicle and
handed Mrs Dennett the two forms referred to above, the ‘Seizure Information
Notice’ and Customs Notice 12A (‘Goods and/or vehicles seized by Customs’.
14. Mr and Mrs Dennett were
taken to another train, escorted to England and left at Folkestone. They made
their way from there to their home in Norfolk by train.
15. Mrs Dennett took legal
advice, and on 11 October 2010 Greenland Houchen Pomeroy, Solicitors of
Attleborough, Norfolk wrote to the Post Seizure Unit of UKBA requesting the
return of the Vehicle. The letter stated that the Vehicle was a driving
instructor’s vehicle fitted with dual controls. On 13 October 2010 Mrs Dennett
herself telephoned and wrote to the Post Seizure Unit confirming that the
Vehicle was a driving instruction vehicle and that she used it in her
profession as a driving instructor. She apologised for bringing into the
country an amount of tobacco which exceeded the limit for personal use, stated
that the incident was her ‘first offence’ and that she did not intend that this
should happen ever again.
16. She explained in her letter
that she used the Vehicle for her work and to obtain an income and that to lose
the ability to do this ‘would have a detrimental impact on [her] work and [her]
home life and would result in a loss of salary and [her] ability to maintain
payments on [her] mortgage’. She further explained that she lived in a rural
area where public transport amounted to one bus each morning, stating that in
order to go to her nearest town she would have to use a taxi or get a lift from
a friend. She asked or further consideration of the case having regard to the
information provided in the letter.
17. In response, Officer Govier
of the National Post Seizure Unit of UKBA wrote to Mrs Dennett on 7 December
2010 (as noted above) stating that the general policy was not normally to
restore private vehicles seized because they were carrying excise goods liable
to forfeiture. Restoration was considered if the excise goods were destined
for supply on a ‘not for profit’ basis or, if they were destined for supply at
a profit the quantity of excise goods was small and it was ‘a first
occurrence’, or if the vehicle was owned by an ‘innocent’ third party, not
present at the time of the seizure, or a third party who had taken reasonable
steps to prevent smuggling in the vehicle. Officer Govier also stated that ‘in
all cases any other relevant circumstances will be taken into account in
deciding whether restoration is appropriate’.
18. Officer Govier concluded
that there were no exceptional circumstances that would justify a departure
from the policy and refused restoration. Officer Govier did not mention in her letter
the fact that the Vehicle was a driving instructor’s vehicle fitted with dual
controls, or that it was used by Mrs Dennett in her work as a driving
instructor.
19. Officer Govier in the letter
informed Mrs Dennett that she could have the decision not to restore the
Vehicle reviewed and in a letter dated 31 December 2010 Mrs Dennett wrote to
UKBA requesting a review.
20. In that letter, Mrs Dennett
stated that she had read the policy for the restoration of private vehicles and
made various further comments (as well as re-iterating points made in earlier
correspondence). In particular she emphasised that the Excise Goods were
destined for supply on a ‘not for profit’ basis for use by herself and her
husband and their 3 grown teenagers (to whom they were to be a ‘gift’). She
complained in the letter that all of this had been explained to Officer
Castle-Turner who had made a written log, which she and her husband were not
permitted to see, but were required to sign.
21. Also on 31 December 2010 Mr Dennett
wrote to UKBA, on behalf of himself and Mrs Dennett, raising an official
complaint against Officer Castle-Turner in relation to his conduct on 18
September 2010. The detail of the complaint provided by Mr and Mrs Dennett by
email contained examples of abusive language which they said that Officer
Castle-Turner had used in speaking to them. Unfortunately the words involved
caused the ‘firewall’ at UKBA’s system to prevent these emails reaching the
intended recipient (Officer White). Officer White asked for the details to be
re-sent. This was done, on 17 February 2011 using asterisks in place of the
words in issue. The emails were then received by Officer White. Officer
Jordan, a Complaints Officer at the Border Force Complaints Team wrote to Mr
and Mrs Dennett on 21 February 2011 acknowledging the letter of 31 December
2010 and the later email of 17 February 2011 but stated that due to the length
of time which had elapsed between the ‘alleged incident’ and Mr and Mrs Dennett
writing to UKBA (on 31 December 2010) they were unable to investigate the
matter. Officer Jordan stated that UKBA’s complaints procedure ‘states that a
complaint should normally be made in writing by the aggrieved person or their
representative no more than three months from the day on which the incident
first occurs or came to their notice’. Being aware that Mr and Mrs Dennett
might not be happy with this response, Officer Jordan assured them that UKBA’s
members of staff strive to provide a polite and professional service and hoped
that any future dealings Mr and Mrs Dennett had with UKBA would be
satisfactory. Mr Dennett emailed Officer Jordan on 4 March 2011 expressing
strong dissatisfaction with her response.
22. Following receipt of the
Decision Letter (dated 20 January 2011), Mr Dennett sent a further email (on 4
March 2011) to ‘[email protected]’ stating that study of the Decision
Letter had made him and Mrs Dennett certain that information relied on to reach
the decision not to restore the Vehicle was incorrect and further stating that
they wished to make a (further) complaint against Officer Castle-Turner on the
ground that he ‘intentionally falsified the answers we made to his questions’.
23. The Decision Letter
recounted UKBA’s version of the initial exchange between Officer Castle-Turner
and Mr and Mrs Dennett and of their separate interviews. It stated that
Officer Castle-Turner had been satisfied that the Excise Goods had been held
for a commercial purpose and had seized the Excise Goods and the Vehicle under
CEMA. It also stated that Mrs Dennett had been issued with a ‘Seizure Information
Notice’ and Notice 12A which explained that she could challenge the legality of
the seizure in a Magistrate’s Court by sending UKBA a notice of claim within 1
month of the date of seizure. It also stated that as Mrs Dennett had not
challenged the legality of the seizure the Excise Goods and the Vehicle had
been condemned as forfeit to the Crown by the passage of time under CEMA
Schedule 3, paragraph 5.
24. The Decision Letter dealt
with Mrs Dennett’s request for restoration of the Vehicle. It referred to Mrs
Dennett’s explanation that the Vehicle was a dual control vehicle and that she
was a driving instructor and therefore needed the Vehicle ‘for your income’.
It also referred to the fact that Mrs Dennett lived in a rural area where
public transport is limited to one bus each morning and to her statement that
this was the first time that both Mr and Mrs Dennett had bought tobacco
abroad. Officer Hodge explained UKBA’s policy for the restoration of private
vehicles, in a slightly fuller way than Officer Govier had done.
25. Officer Hodge explained in
the Decision Letter that she considered every case on its individual merits.
She had considered the matter afresh, ‘including the circumstances of the
events on the date of seizure and the related evidence, so as to decide it any
mitigating or exceptional circumstances exist, that should be taken into
account’. She had examined all the representations and other material that was
available to UKBA both before and after the time of the decision by Officer
Govier.
26. Officer Hodge stated that
she had not considered the legality or the correctness of the seizure, which
was a matter which could have been raised by an appeal to the Magistrates’
Court within one month of the seizure. Officer Hodge’s starting point had been
that the seizure of the Excise Goods and the Vehicle had been legal and that
the Excise Goods had been held by Mr and Mrs Dennett for a commercial purpose
and not for ‘own use’ by themselves or family or friends on a non-commercial
basis.
27. Officer Hodge explained that
the policy on restoration required her to ascertain the circumstances of the
case to determine inter alia whether there were exceptional circumstances
which should result in restoration of the Vehicle and whether the result is
fair, reasonable and proportionate in all the circumstances.
28. Officer Hodge noted that Mr
Dennett had understated to Officer Castle-Turner the amount of Excise Goods
being imported (25 kilos, when the true figure was 38.5 kilos). She also noted
that Mrs Dennett had given inconsistent answers to questions about her own
smoking habits which led Officer Hodge to conclude that she (Mrs Dennett) did
not actually smoke tobacco. She noted the unusually large quantity of Excise
Goods imported, that was (in her view) likely to damage legitimate UK trade, and a reasoned assumption that if it was imported for ‘own use’ a large amount of
it would have gone stale before it could be used at all. She rejected Mr and
Mrs Dennett’s explanation that the Excise Goods were bought by them to give (or
sell at cost) to their 3 adult children. She concluded that non-restoration of
the Vehicle was fair, reasonable and proportionate in the circumstances, citing
familiar extracts from the judgments in the Court of Appeal in Lindsay v
Customs and Excise Commissioners [2002] EWCA Civ 267, [2002] STC 588, viz:
per Lord Phillips (at [63]):
‘
… Those who deliberately use their cars to further fraudulent commercial
venture in the knowledge that if they are caught their vehicles will be
rendered liable to forfeiture cannot reasonably be heard to complain if they
lose their vehicles. Nor does it seem to me that, in such circumstances, the
value of the car used needs to be taken into consideration. Those circumstances
will normally take the case beyond the threshold where that factor can carry
significant weight in the balance. Cases of exceptional hardship must always,
of course, be given due consideration.’
and per Judge LJ (at [72]):
‘…
Given the extent of the damage caused to the public interest, it is, in my
judgment, acceptable and proportionate that subject to exceptional individual
considerations, whatever they are worth, the vehicles of those who smuggle for
a profit, even for a small profit, should be seized as a matter of policy …’
29. Officer Hodge then went on
to consider the question of hardship caused to Mrs Dennett by the seizure and
forfeiture of the Vehicle. She mentioned specifically Mrs Dennett’s business
as a driving instructor, but concluded that neither the inconvenience nor the
expense of replacing the Vehicle amounted to exceptional circumstances which
would disapply the policy of non-restoration of the Vehicle.
30. She concluded with her
decision to uphold Officer Govier’s decision and explained how Mrs Dennett
could appeal her decision to this tribunal.
31. Mrs Dennett’s oral evidence
before the Tribunal recounted her view of the encounter with Officer
Castle-Turner on 18 September 2010 and the ensuing correspondence. She
emphasised that Officer Castle-Turner had led her to believe that restoration
of the Vehicle was likely and that she only found out that this was not the
case when she contacted UKBA later. She also re-iterated that she had not
purchased the Excise Goods for commercial gain, but for use by her family and
that she was not seeking restoration of the Excise Goods, but only of the
Vehicle.
32. Mrs Dennett was
cross-examined on her smoking habits and how she had purchased Excise Goods at
Adinkerke.
33. The Tribunal asked Mrs
Dennett about her business as a driving instructor. She said she had been a
freelance driving instructor for just over 5 years. She worked as a driving
instructor for about 16 hours a week. She estimated that her profits from the
business were ‘a couple of hundred each year’. She described the business as
‘more of a back-up – when I want to save for something’. She also has an
office job as a sales office manager. She told the Tribunal that she was
purchasing the Vehicle via a hire purchase arrangement and had continued
paying the HP instalments even when the car was not available to her because it
had been seized. She said she had another car now, which did not have dual
controls and which she does not use for driving instruction. Mr Dennett also
has a car. Mr and Mrs Dennett always keep two cars.
34. Mr Dennett in evidence
confirmed what Mrs Dennett had said and gave a similar account of the events of
18 September 2010. The main emphasis in his evidence was his account of the
rudeness (in his view) of Officer Castle-Turner in questioning Mrs Dennett and
himself and his determination to pursue a complaint against him. In particular
he said that Officer Castle-Turner had been ‘judgmental about what we should be
able to buy our children’. He was cross-examined by Ms Wastall about his
awareness of the guidance for personal importation of tobacco – which suggests
that 3 kilos is appropriate for one person’s own use. He confirmed he was
aware of the guidance. He complained that he had not seen Officer
Castle-Turner’s notes or his witness statement before the day of the appeal
hearing and challenged certain aspects of his answers as recorded in Officer
Castle-Turner’s notes.
35. Officer Castle-Turner’s
evidence was that he had worked at Coquelles for the last 12 years and was an
anti-smuggling officer. His job was to detect attempted importations into the UK of excise goods and prohibited goods. He spoke to Mr and Mrs Dennett after they had
been asked to pull over by other officers at passport control. He explained
that he asks routine questions when he stops a vehicle and does not take notes
at that point. He writes up his notes after the initial conversation. He did
this when he questioned Mr and Mrs Dennett. He said that he presented his
notebook to Mr and Mrs Dennett (a fact which they disputed).
36. Officer Castle-Turner
explained that there was CCTV in the garages where cars were examined and that
other officers and his supervisors would be in the vicinity. However the CCTV
film, which was not intended for the public’s benefit was wiped clean in about
three months after use. He refuted Mr and Mrs Dennett’s allegations of verbal
abuse, and of forcing them to sign unseen notes prepared by him. He said he
had not used abusive words in their exchange. He denied Mrs Dennett’s
allegation that he had challenged her to show him that she could roll a
cigarette. He said that at the end of his interview with Mrs Dennett he had
presented his notebook to her, she had looked at the notebook and signed it. He
was challenged on all these points in cross-examination by Mr Dennett.
37. Officer Castle-Turner said
in evidence that he had no part in the restoration of seized vehicles. He
informed Mr and Mrs Dennett that vehicles were not kept at Coquelles but were
taken to Dover and held there. He denied that he suggested to Mr and Mrs
Dennett that their car would or could be restored to them in 2 weeks (as they
alleged he had done). He said that he knew restoration would not happen in 2
weeks. He said that Mr and Mrs Dennett’s misleading answers to questions had
made him suspicious that they were attempting to import the Excise Goods for
commercial purposes.
38. Officer Hodge stated that
she had considered Officer Castle-Turner’s notes, the seizure information
notice, the correspondence with Mr and Mrs Dennett and such documents,
including receipts, as were provided to UKBA, in making her decision not to
restore the Vehicle. She stated that where a seized vehicle was the subject of
a hire purchase agreement, the driver had the option to claim restoration
himself/herself or to surrender the vehicle to the finance company, leaving the
finance company to claim restoration if it thought fit. In this case the
driver (Mrs Dennett) had claimed restoration.
39. Officer Hodge said that she
had formed the view that the Excise Goods were intended by Mr and Mrs Dennett
to be sold on at a profit, and not as gifts for their children. She considered
that the evidence showed that they had tried to mislead Officer Castle-Turner.
She said that she had considered whether the seizure had caused Mrs Dennett
exceptional hardship. She noted that Mrs Dennett had said in correspondence
that deprivation of the car (and loss of income as a driving instructor)
threatened her ability to pay her mortgage, yet at the hearing she had said to
the Tribunal that her income as a driving instructor was about £200 a year,
which suggested to her that that income was not really relied on to pay the
mortgage. A factor in her decision was that there was evidence that Mr and Mrs
Dennett were frequent travellers and may have imported significant quantities
of Excise Goods on other occasions.
40. Ms Wastall submitted that
Officer Hodge’s decision, against which the appeal was brought, was one which
could reasonably have been made on the basis of the information before her at
the time. She had applied UKBA’s policy which was generally not to restore
private vehicles used in the importation of Excise Goods for commercial
purposes. Ms Wastall contended that Officer Hodge’s decision was justified by
Mr and Mrs Dennett’s conduct in misleading Officer Castle-Turner and that she
had considered the hardship issue in line with the Court of Appeal’s decision
in Lindsay.
41. Mr and Mrs Dennett in reply
submitted that the Excise Goods had been imported for their own use and as
gifts and that they had been honest and open with the officers. Money had been
available for the purchase from their earnings. Mrs Dennett’s new car had been
bought with capital released from the sale of their house in July 2011.
Our
decision
42. As will be apparent from the
above account of the evidence and the facts, most of the debate at the hearing
was about the reasonableness of Officer Castle-Turner’s decision that Mr and
Mrs Dennett had imported the Excise Goods for commercial purposes and the
reasonableness of Officer Hodge on her review of reaching the same conclusion.
43. From paragraphs 5 to 7
above, it will be seen that this issue is outside the parameters of the
Tribunal’s function in this appeal, which is to consider the reasonableness of
the decision not to restore the Vehicle, taking as a fact that the attempted
importation of the Excise Goods was for commercial purposes. We therefore make
no findings of fact in relation to the contentious issues which emerged in the
evidence concerning what was said and done after Mr and Mrs Dennett were
detained at Coquelles on 18 September 2010.
44. However, we gave careful
consideration to the relevant issue whether Officer Hodge had reasonably
rejected the argument that Mrs Dennett, as a driving instructor, would suffer
exceptional hardship from being deprived of the Vehicle. Mrs Dennett’s
evidence that her business as a driving instructor was a ‘second job’ and that
her estimate of her profits from the business were ‘a couple of hundred each
year’, the business being ‘more of a back-up – when I want to save for
something’ persuaded us that this factor did not present exceptional
circumstances which would reasonably justify a departure from UKBA’s general
policy not to restore private vehicles used for smuggling attempts.
45. Mr and Mrs Dennett did not
present any other arguments to the effect that Officer Hodge’s decision was
unreasonable. Nor did they suggest that the decision was disproportionate – a
factor which is included in the concept of reasonableness.
46. Having regard to the dicta
from Lindsay referred to above, we would not expect any argument to the
effect that Officer Hodge’s decision was disproportionate or otherwise
unreasonable to succeed.
47. Certainly we are quite
unable to conclude on the evidence before us that her decision was one which no
reasonable body acting on the basis of the evidence available – or the evidence
which we have considered – could have reached. On this basis Mrs Dennett’s
appeal must fail, and we dismiss it accordingly.
48. We add a word about Officer
Castle-Turner. It appeared to us that the greater part of Mrs and Mrs Dennett’s
dissatisfaction in this matter related to their perception of Officer
Castle-Turner’s behaviour towards them on 18 September 2010. Since, as he
said, and as is quite obvious, he played no part at all in UKBA’s decision not
to restore the Vehicle to Mrs Dennett, the matter of his behaviour on that day
is wholly outside the remit of our consideration in this appeal.
49. Accordingly we find no facts
in relation to it. The appropriate fact-finding body would be the court,
tribunal or administrative body which is properly seized of any complaint which
Mr or Mrs Dennett have made or may make in the future in relation to Officer
Castle-Turner.
50. However, in fairness to him
as a person whose character was attacked in these proceedings, we conclude this
decision by saying that from the evidence which was before us we gained the
impression that he was a conscientious officer doing his best to fulfil his
quite arduous duties of detecting attempted importations into the UK of excise
goods and prohibited goods at Coquelles.
51. We also express the view
that Mr and Mrs Dennett were understandably frustrated by UKBA’s conduct in
relation to the official complaint made against Officer Castle-Turner by Mr
Dennett on 31 December 2010. It seems to us that UKBA were unnecessarily
unhelpful (to put it no higher) to refuse to investigate the complaint because
it was made (just) over three months after the incident complained about. This
is especially so because it is apparent from Officer Jordan’s letter dated 21
February 2011 that UKBA’s complaints procedure clearly permitted a complaint
received more than three months after such an incident to be investigated in
some circumstances. In particular it caused understandable frustration to Mr
and Mrs Dennett that UKBA refused to investigate the complaint when they had requested
Mr and Mrs Dennett to re-send to them details of their allegations. The bland
conclusion of Officer Jordan’s letter – that officer’s assurance that UKBA’s
members of staff strive to provide a polite and professional service and hope that
any future dealings Mr and Mrs Dennett had with UKBA would be satisfactory –
was bound, in our view, to add salt to the wound, and whoever drafted the
letter should have avoided deploying it. We hope that UKBA will take note of this
for future reference.
52. This document contains full findings
of fact and reasons for the decision. Any party dissatisfied with this decision
has a right to apply for permission to appeal against it pursuant to Rule 39 of
the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The
application must be received by this Tribunal not later than 56 days after this
decision is sent to that party. The parties are referred to “Guidance to
accompany a Decision from the First-tier Tribunal (Tax Chamber)” which
accompanies and forms part findings of this decision notice.
JOHN WALTERS QC
TRIBUNAL JUDGE
RELEASE DATE: 14 June 2012
