Williams v The Director of Border Revenue [2011] UKFTT 318 (TC)

FTT-Tax
Williams v The Director of Border Revenue
[2011] UKFTT 318 (TC) · 2011-05-09
[10]The Review Decision of Mr Crouch dated 20 July 2010 took account of the background and circumstances of seizure and the explanation given by Mr Williams in interview. Mr Williams had stated that he had travelled 2 to 3 times in the last 12 months, although it subsequently transpired that Mr Williams had made at least 4 trips, in addition to that on 8 May 2010, over the preceding 12 months. The Officer concluded that Mr Williams had attempted to mislead the interviewing officer and he therefore had good reason to doubt Mr Williams’ credibility.[11]The Reviewing Officer took into account the fact that Mr Williams had imported five times more than the Guidance Level of 3kg of hand rolling tobacco and in considering the consumption rate given by Mr Williams, which meant the tobacco would last in excess of 80 weeks as opposed to the 32 specified by Mr Williams, concluded that the sole purpose of Mr Williams’ trips was to purchase tobacco. The Officer took the view that the 150 to 200 cigarettes which Mr Williams stated he could obtain from a 50 gram pouch was totally implausible and taken together with the lack of any smoking materials on his person when interviewed, led him to doubt whether Mr Williams smokes tobacco at all.[12]The Reviewing Officer noted that Mr Williams had admitted to purchasing tobacco and cigarettes in January 2010 but that he denied having imported cigarettes or tobacco in March 2010 and December 2009, stating that on those occasions he had only purchased some alcohol and visited the supermarkets. The Officer concluded that there this account by Mr Williams was implausible and lacked economic viability given the cost and time involved in making such trip. The Officer noted the comment of His Honour Stephen Oliver QC in the case of Khatkar (LON/04/8030):
“Bearing in mind that Mr Khatkar had been found to have been importing large quantities of excise goods on the occasions when he was stopped, it was, we think, reasonable to conclude that Mr Khatkar had been importing large quantities on those other occasions when he had not been stopped”
[13]The Reviewing Officer was guided by the Respondent’s policy on restoration. The Officer identified the aggravating features as being the large commercial quantity of tobacco and Mr Williams’ attempt to conceal the number of trips abroad he had made, which in the Officer’s view were made solely for the purpose of purchasing tobacco and concluded that the decision not to restore the vehicle was proportionate.[14]The Reviewing Officer went on to consider information subsequently provided by the Appellant and the fact that where a vehicle is owned by a third party, who was not present at the time of seizure and who can show they were both innocent and blameless, then consideration may be given to restoring the vehicle for a fee. If the third party can show, in addition to being blameless and innocent, that she had taken reasonable steps to prevent smuggling in the vehicle, then consideration may be given to restoring the vehicle free of charge.[15]The Reviewing Officer noted that the Appellant’s husband was a frequent driver of the vehicle, was insured to drive it and had made a number of trips abroad in the Appellant’s vehicle. The Officer found it difficult to accept that the Appellant was unaware of the purpose of the trips. He concluded that Mr Williams was involved in the ownership of the car and as such restoring it to the Appellant would be tantamount to restoring it to the person involved in the smuggling attempt. The Officer had regard to the comments of

Judge Devlin in the case of HMRC v Amanda McLarnon in which it was stated:

“We can readily see and understand why it should be the case that where a smuggler has either a legal or equitable interest in a seized vehicle, there should be no restoration of that vehicle even though another innocent party may also have property rights in that same vehicle. We accept that for such a vehicle to be restored would simply amount to the vehicle being handed back to the perpetrator of the crime which had lead directly to its seizure in the first instance.”
[16]The Officer went on to consider the issue of proportionality and whether any exceptional hardship was caused as a result of the decision not to restore the vehicle. The Officer concluded that the inconvenience and expense caused to the Appellant did not amount to exceptional hardship and that the decision not to restore the vehicle was proportionate given the aggravating features of the importation. 17. In those circumstances, the Officer decided that the decision not to restore the vehicle to the Appellant was reasonable and proportionate. Evidence 18. We heard evidence from the Reviewing Officer, Mr Crouch, who confirmed that he had taken into account the background to the seizure, circumstances of the seizure and subsequent information provided by the Appellant as outlined at paragraphs 9 to 16 above. Mr Crouch stated that he had obtained the records of previous trips made and noted that Mr Williams had left in the very early hours of the morning on 27 March 2010, 12 December 2009, 9 May 2009 and 13 January 2009, returning to the UK at lunchtime or during the afternoon on each occasion. The Officer had inferred from this information that the Appellant must have been aware of the trips made by her husband on the basis that he had used her vehicle and he concluded that Mr Williams had unrestricted access to the Appellant’s vehicle in order to make regular one day trips for the purpose of purchasing and importing tobacco. 19. Mr Crouch confirmed that although the Appellant had not been present, he had taken the view that the Appellant had not taken reasonable steps to prevent the importation and was aware of the purpose for which her husband took her vehicle abroad. 20. Mr Crouch explained that he had considered the Respondent’s policy on restoration and the possibility of restoration for a fee but found that it did not apply due to the significant quantity of hand rolling tobacco imported and number of previous trips that had been made by the Appellant’s husband in the Appellant’s vehicle. 21. The Officer stated that he had gone on to consider the issue of hardship based on the Appellant’s assertion that she required her vehicle for her employment but that he had concluded that the hardship suffered by the Appellant was not exceptional given his conclusions that the Appellant was aware of her husband’s trips abroad, their purpose and also the fact that another vehicle was available for her use. 22. In cross examination Mr Williams disputed the pocket notebook account of his interview with the Officer who had stopped him on 8 May 2010. Mr Crouch stated that he was unable to comment on the accuracy of the record but noted that it had been signed by Mr Williams as accurate and that there had been no challenge to the legality of seizure. 23. Mr Crouch accepted that Mr and Mrs Williams may have had sufficient money to fund the purchase of excise goods as evidenced by bank statements produced at the hearing, but stated that he had taken account of the fact that the purchase was made in cash and he had been provided with no evidence as to the source of the money at the time of carrying out his review. 24. It was put to Mr Crouch that the Appellant’s children would have been given more than 10 pouches as gifts, which Mr Crouch noted had never been asserted before by the Appellant despite being invited to provide any evidence or information in support of the application for restoration prior to his review. 25. Mr Williams queried the Officer’s conclusion that he had unrestricted access to his wife’s vehicle to which the Officer responded that he had considered the fact that Mr Williams is insured to drive the vehicle without restriction and that he had formed the view that the couple had “equal ownership” in the sense that Mr Williams could use the vehicle whenever his wife did not require it for work. 26. Mr Williams questioned Mr Crouch as to the relevance of the fact that the Appellant had not challenged the legality of seizure at the Magistrates’ Court and whether Mr Crouch had seen this as an “admission of guilt.” Mr Williams explained to the Officer that the failure of the Appellant to challenge condemnation in the Magistrates’ Court was a poorly judged decision and that the sole focus of Mr and Mrs Williams was to have the vehicle restored as opposed to the excise goods. The Officer stated that the record of seizure confirmed that Mr Williams had been given the relevant notices which clearly explained the options available to the Appellant. The Officer noted that the Appellant had the notice at the Tribunal hearing and had therefore had the information available since seizure. Mr Crouch stated that there had been no reason put forward for the failure by the Appellant to challenge seizure at the Magistrates’ Court and this was a matter he took into account in reaching his decision. 27. The Officer clarified that Mr Williams’ response when stopped that he had no restricted goods with him had not caused him any concern and had not featured in his decision as Mr Williams had clearly been referring to items such as firearms as opposed to tobacco. 28. Mr Williams questioned the Officer as to whether he had taken into account the fact that Mr Williams is semi-retired and unable to travel abroad during the summer. Mr Crouch stated that this information had not been provided until the hearing and therefore it had not formed any part in his review decision, but confirmed that it would not change his decision. 29. Mr Williams gave evidence to the Tribunal, stating that the Officer had made assumptions upon which he had reached an inaccurate hypothesis, such as the assertion that this was a smuggling attempt. 30. Mr Williams explained that his intention had been to buy hand rolling tobacco in bulk due to the increase in the cost of diesel, thereby reducing the number of trips made. Mr Williams explained the that the savings to be made in purchasing hand rolling tobacco abroad were significant, and that he had sought to make savings given the current economic climate. 31. Mr Williams stated that the consequences of the non restoration had come at a great cost bearing in mind the loss of tobacco, the loss of his wife’s vehicle, the cost of replacing both, the cost of the fuel for the trip and the mileage added to his vehicle as a result of his wife having to use it before a replacement was purchased. 32. Mr Williams referred the Tribunal to the guidelines which state that there is no limit on the amount of excise goods which can be imported for personal use. 33. Mr Williams stated that the Reviewing Officer had showed that he can be mistaken and referred the Tribunal to a letter from the Appellant dated 15 May 2010 which was stamped as received on 13 May 2010. Mr Williams stated that the letter could not have been received prior to being sent and submitted that this showed that the Respondents’ system was flawed. 34. Mr Williams also highlighted the error in correspondence to the Appellant in which the Officer had referred to the Appellant living in Swansea. This had been corrected by the Officer in a letter to the Appellant dated 18 August 2010 in which the Officer apologised for his error and stated that he had intended to refer to Shrewsbury but that the error did not alter his decision as the point he was making was the distance and cost involved in Mr Williams making trips abroad on a regular basis. 35. Mr Williams highlighted the fact that the Officer had not been aware as to who had been present on his previous trips and stated that there was a discrepancy as to the number of trips he had made. 36. Mr Williams agreed that he would leave home in the early hours, stating that the ferry fares are cheaper at that time, which showed that he was attempting to make savings. 37. Mr Williams explained that the money for the goods came from his joint account with his wife and that they could afford to spend money on excise goods, as shown by the bank statements produced to the Tribunal. 38. In cross examination Mr Williams agreed that he had paid for diesel while abroad on his credit card but paid cash for the excise goods, stating that he had not wanted to incur a large credit card bill. Mr Williams stated that he had taken £1,200 in cash with him, and that his mother had given him extra money for the cigarettes. Mr Williams stated that he had researched the cost of tobacco on the internet and therefore knew how much money he would need. Mr Williams reiterated that the money had come from his joint bank account, although he had not brought the relevant bank statement to the hearing. Mr Williams stated that the couple would take out large sums of money at a time, such as £1,000, and not make any further withdrawals for a number of months. 39. Mr Williams was asked whether he had read the Notice 12A given to him when stopped. He stated that he may have flicked through it but his main concern was to get his wife’s car back. Mr Williams stated that he was unaware that a challenge in the Magistrates’ Court could affect the issue of restoration of his wife’s car and that he believed the two matters were separate. 40. Mr Williams agreed that he used to work in the haulage industry prior to becoming a civil engineer but stated that the guidelines were a surprise to him. Mr Williams later stated that although he was aware of the guidelines he did not have a leaflet explaining them until May 2010. 41. Mr Williams was questioned about the previous trips he had made. He stated that in March 2010 he had taken his wife abroad as it was her birthday and prior to that, in January 2010, he had made the trip abroad with his wife and two acquaintances. He stated that on the January trip no excise goods had been imported and that the trip had been made to visit designer shops. Mr Williams stated that he had gone abroad in December 2009 in order to purchase alcohol for Christmas and that no tobacco had been imported. It was put to Mr Williams that he had signed the interviewing officer’s notebook as accurate and that he had told the officer that he had imported goods in January 2010 but not in March 2010. Mr Williams stated that he was asked if he would sign the notebook and had done so trusting that the officer had made an accurate record. 42. Mr Williams stated that in respect of the bulk buying, he and his wife had discussed the issue and decided together that it would save money. Mr Williams stated that his wife was unaware that he intended to bring a large amount of tobacco back in May 2010 as he had not told her despite checking the cost of the goods on the internet before the trip. 43. Mrs Williams gave evidence to the Tribunal in which she stated that she had been present on the trips abroad with her husband in both January 2010 and March 2010. Mrs Williams stated that tobacco would have been purchased in the January trip as gifts for her children’s birthdays. Mrs Williams stated that the March trip had been made to purchase an outfit for her birthday. Mrs Williams later stated that she was unsure as to the dates, and that tobacco may have been imported in March 2010 and not January 2010 when they had taken the trip with two acquaintances and visited designer shops. 44. Mrs Williams stated that she had seen the leaflets given to her husband when the goods and vehicle were seized but that she had not read the information. Mrs Williams stated that she had made telephone calls to telephone numbers provided by UKBA on a leaflet entitled “Restoration Procedure”. Mrs Williams could not recall the advice she had been given other than to write a letter, which she did, and stated that she had never specifically asked about proceedings at the Magistrates’ Court. 45. Mrs Williams confirmed that the evidence her husband had given in respect of withdrawing large amounts of cash from the bank was accurate and stated that she knew that her husband was travelling abroad with the intention of purchasing more tobacco than previously, although she was unaware of the exact amount. Mrs Williams stated that her husband would have asked to use her car even though he has his own set of keys in case she needed it for work. Decision 46. We considered the submissions made by Ms Graham Wells on behalf of the Respondents that the Tribunal has no jurisdiction to consider the issue of personal use given that the Appellant and Mr Williams failed to challenge the legality of seizure at the Magistrates’ Court. 47. We noted the evidence given by both Mr and Mrs Williams that they had not read the information provided when Mr Williams was stopped which set out the procedure for appealing to both the Magistrates’ Court and this Tribunal. 48. The Tribunal’s jurisdiction is contained in section 16 of the Finance Act 1994 which applies to matters contained in Schedule 5 including decisions on restoration. Section 16(4) provides that “In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making the decision could not reasonably have arrived at it, to do one or more of the following, that is to say—(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision;….” 49. We did not find that there was any good reason why the Appellant and Mr Williams had failed to avail themselves of the opportunity to challenge the seizure of the vehicle at the Magistrates’ Court. Bearing in mind the well-established principles of case law on this issue, we found that it would be an abuse of process to allow the Appellant to raise the question of own use in these proceedings . 50. The Tribunal’s jurisdiction is therefore limited to considering the reasonableness of the decision not to restore the car and the excise goods. The Director’s policy is not to restore excise goods in not-for-profit aggravated cases, which is the category this case falls into on the basis of the amount of excise goods involved and the number of previous trips made. 51. We found as a fact that the Officer had taken into account all relevant matters and disregarded irrelevant matters in reaching his decision. We found that the Officer was entitled to take account of Mr Williams answers in interview when stopped, there having been no challenge made by the Appellant or her husband to the Magistrates’ Court. We found that the matters taken into account by the Officer, such as the amount imported, previous trips made and economic viability of the account given by Mr Williams were relevant considerations and we found as a fact that the Officer had not taken into account any irrelevant matters. 52. We considered the Appellant’s submission that she was an innocent third party. We accepted the Officer’s evidence that he had considered this issue and found that the Officer’s conclusion that to restore the vehicle would be tantamount to restoring it to Mr Williams was reasonable. We noted that the Officer had taken into account the regular trips made by Mr Williams in his wife’s car and the inconsistent evidence as to whether Mrs Williams was aware of her husband’s intention to purchase a large amount of tobacco in May 2010. We found as a fact that the Officer’s decision had taken into account all relevant information and that his decision was reasonable and proportionate.[53]We were invited by Mr Williams to disregard case law in reaching our conclusion, and while we have considered this case on its own merits, we are guided by the well-established principles set out in Lindsay v Customs and Excise Comrs [2002] 1 WLR 1766 , 1774 as per Lord Phillips of Worth Matravers MR:
“ Those who deliberately use their cars to further fraudulent commercial ventures in the knowledge that if they are caught their cars will be rendered liable to forfeiture cannot reasonably be heard to complain if they lose those vehicles…”
We also note the comments of the Strasbourg Court in AGOSI v United Kingdom (1986) 9 EHRR 1 at paragraph 54: “ The striking of a fair balance depends on many factors and the behaviour of the owner of the property, including the degree of fault or care which he has displayed, is one element…” 54. We found as a fact that the Appellant did not exercise reasonable care in imposing restrictions and controls on the use of the vehicle but moreover, irrespective of whether she knew the exact amount to be imported, that she was fully aware, and supportive of, her husband’s intention to travel abroad for the purpose of importing a large quantity of tobacco. 55. We found that the Officer had been correct in reaching the conclusion that there was no exceptional hardship caused by non restoration of the Appellant’s vehicle. The Appellant had her husband’s vehicle available for her use until such time that her vehicle was replaced. 56. We do not find the officer’s conclusion to be one that he could not reasonably have arrived at, and nothing we heard in evidence during the hearing would have led us to a different conclusion ourselves. 57. 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 of this decision notice. TRIBUNAL JUDGE RELEASE DATE: 9 May 2011