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	United Kingdom VAT & Duties Tribunals (Excise) Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> United Kingdom VAT & Duties Tribunals (Excise) Decisions >> Sean Doran Haulage Ltd v Commissioners of Customs and Excise [2004] UKVAT(Excise) E00754 (01 July 2004) URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2004/E00754.html Cite as: [2004] UKVAT(Excise) E00754, [2004] UKVAT(Excise) E754

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E00754

Commercial vehicle – tractor unit and tanker trailer – found upon examination to contain concealed load of cigarettes – tanker specifically adapted for smuggling purposes – seizure of tractor unit and tanker – Appellant haulier and driver claim to be unaware of presence of consignment – Customs and Excise Management Act 1979 ss 49(1)(a)(i), 141(a) & (b), 152(b) – Finance Act 1994 ss 14, 16(4) – request for restoration – refused – whether refusal reasonably arrived at – whether Appellant and driver complicit or reckless – review – appeal from decision taken upon review

LONDON TRIBUNAL CENTRE

SEAN DORAN HAULAGE LTD Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: ALISTAIR F W DEVLIN (Chairman)

MR MAURICE MCCLOY

Sitting in public in Belfast on 19 March 2003 and 17 February 2004

Mr R Dowd for the Appellant

Mr Puzey for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION

1. This is an appeal by Sean Doran Haulage Limited ["the Appellant"] against the decision of the Commissioners taken upon review contained in a letter dated 30 October 2001 confirming the earlier decision not to offer to the Appellant restoration of a seized vehicle, the property of the Appellant. The vehicle in question was a Scania tractor unit, Registration No.95 MN 1738. Previously, the Appellant had sought restoration of the seized vehicle by letter dated 23 August 2001; a decision to refuse restoration had thereafter been arrived at by the Commissioners on 12 September 2001. The Appellant's solicitors followed up this refusal by means of the request for a review, which was communicated by letter dated 17 September 2001. In their review dated 30 October 2002 the Commissioners confirmed the earlier decision not to effect or offer restoration.

The undisputed facts

2. From the evidence adduced before it at hearing, the Tribunal found the following facts to be undisputed. The Appellant is a limited liability company, with address at 3, New Houses, Tyholland, County Monaghan, Republic of Ireland. The Appellant has since 1998 carried on in business as a haulage firm. In the period prior to August 2001, the Appellant operated only on a relatively limited basis, the firm owning at that time only 4 tractor units. On 23 August 2001, at approximately 23.30 hours, a Scania tractor unit, Registration No.95 MN 1738 the property of the Appellant ["the vehicle"] was stopped by Customs officials at the port of Dover. The vehicle was towing a tanker, and was being driven by a certain Mr Patrick Gormley, an employee of the Appellant.
3. Upon being stopped and spoken to by Customs officials, Mr Gormley informed the officials that he was transporting a consignment of wax in the tanker. He confirmed that he was a regular driver through the port of Dover. Upon being asked what load he had taken out on his outward trip, Mr Gormley replied that he had gone out empty. Upon being asked to produce a CMR for the load, Mr Gormley did so; the CMR was handwritten, and showed the load to consist of 22,000 litres of Impermax WSK, a paraffin based wax. Upon being asked where he had loaded the vehicle, Mr Gormley replied Ghent in Belgium. Upon being asked if he had in his possession any prohibited goods, wines, spirits or tobacco, Mr Gormley replied that he had just 800 cigarettes and an open carton. The vehicle was driven up to the scanner, and having been scanned, at approximately 00.00 hours on 24 August 2001 the vehicle was then directed into a covert examination bay. Detailed physical examination of the vehicle established it as containing 2,787,600 cigarettes which were concealed inside the tanker. The internal arrangements within the tanker had been specifically adapted in such a manner as to facilitate the concealment of goods. The tanker had been divided up into three compartments; the two rearmost compartments were accessible only via the front compartment. At the top of each compartment was a false container or pot, into which had been placed a small amount of paraffin type liquid. The presence of these pots meant that any person simply lifting the lids on the top of the tanker trailer would have been presented with a depth of paraffin immediately underneath the lids. Only upon dipping of the depth of liquid in the containers would the falsity of the containers have become apparent. The front compartment of the tanker was empty, save for the false pot of paraffin immediately underneath its lid.
4. Mr Gormley was arrested on suspicion of having been involved in the importation of a large commercial quantity of excise goods. He was cautioned, escorted to a private room and questioned. Subsequently, at approximately 02.00 hours Mr Gormley was informed that he was not any longer under arrest, and that he was free to go. He agreed to remain and answer further questions. He was asked who owned the tanker and replied that he was not sure. He was asked how long he had been driving this particular vehicle; he replied two weeks. He was asked who he worked for and replied that he worked for the Appellant.
5. At some stage of the questioning of Mr Gormley, upon being asked how to access the tank internally, informed the Customs Officers that it would be necessary for them to pump out the wax from the front compartment of the tanker. There was a dispute as between the parties as to precisely when and in what circumstances this was said by Mr Gormley. Upon being asked further if he had taken this tanker out empty and was now returning with it full, Mr Gormley replied that he had gone out pulling 2824 empty, and that he was now bringing back 2826 full. The tanker and trailer were seized.
6. By letter dated 23 August the Appellant's solicitors requested restoration of the vehicle. By letter in reply dated 12 September 2001 Customs refused restoration. In that letter, reliance was placed upon section 88 of the Customs and Excise Management Act 1979, which provides as follows:

'Where … [c] a vehicle is or has been within the limits of any port or at any aerodrome or, while in Northern Ireland, within the prescribed area,

while constructed, adapted, altered or fitted in any manner for the purpose of concealing goods, that vehicle shall be liable to forfeiture'.

The grounds for refusal of restoration were stated to be as follows:

'The above tanker was found to have approximately 2 million cigarettes which were found concealed in a manner to suggest that the tanker had been specifically adapted for a smuggling attempt. It is not our policy to restore vehicles that have been seized under section 88 of the Customs and Excise Management Act. There are no exceptional circumstances in this case which would justify a departure from this policy'.

By further letter dated 17 September 2001 the Appellant's solicitors asked for a review of the decision to restore restoration. Further information in support of this review was provided by them on foot of a letter dated 19 September 2001. The Appellant's solicitors provided testimonials in respect of Mr Doran of the Appellant, and demonstrated that the vehicle had been the subject of a finance agreement.

Decision on review

7. In their review letter dated 30 October 2001 prepared by Mr Harris, Review Officer, Customs relied specifically upon each of the following. Reliance was placed upon the fact that Mr Gormley had carried out no checks as to the validity of the consignment note, nor to verify the details contained on its face. Reliance was also placed upon the fact that the Appellant had carried out no checks so as to ensure that the specified consignee was indeed expecting the goods. Reliance was additionally placed upon the fact that the purported consignee was Deeside Paper Limited of Deeside Industrial Estate, Deeside, Flint, and that Mr Harris had been unable to locate a company of that name at that address. The reviewing officer concluded that Mr Gormley had known that the cigarettes were in the tanker.
8. By Notice of Appeal dated 21 November 2001 the Appellant contended as follows:

'An order was placed to the appellant company by Robert Kelly. The appellant company correctly followed all procedures and the driver and the appellant company were unaware that any cigarettes were concealed within the tanker which was collected. The appellant company did not know and could not have known that any such contraband was concealed in the vehicle'.

Evidence on behalf of the Appellant

9. Mr Doran of the Appellant gave evidence to the Tribunal. He claimed to have received a telephone call from a man identifying himself as a certain Robert Kelly. This man it was claimed said that he had been speaking to one of the Appellant's drivers, who had told him that the Appellant might be interested in some regular work, and enquired how much he would want for the round trip. Mr Doran gave evidence that Kelly gave him a trailer number, together with a collection address in Ghent, Belgium, where the trailer was to be picked up. Kelly said the full load was to go to Deeside Paper. Mr Doran claimed that there was nothing particularly unusual in this type of arrangement. When asked if in these circumstances, the Appellant would have considered it necessary or appropriate for the intended consignee to be contacted, Mr Doran replied that in the majority of cases, that would not have been allowed, and that it would have been forbidden for him to have made contact with the consignee.
10. This was the second such consignment which the Appellant had collected and delivered for Robert Kelly in this same manner. The first consignment had passed off without incident. Mr Doran went on to explain that whereas the original delivery address was to be Deeside, it was subsequently altered by Kelly to be the Abax yard in Liverpool. The reason given for this was twofold: firstly to facilitate the Appellant since he did not have unloading equipment, and secondly due it was claimed to a lack of storage space at the Deeside factory. Kelly it was claimed had told the Appellant not to worry about unloading, and that the tanker trailer could simply be left in the Abax yard at Liverpool, a trailer parking area.
11. Mr Doran in his evidence rejected any suggestion made to him that the circumstances of the order, of the consignment and of its delivery were unusual and suspicious. He stated that he had obtained and one work this way before. On this second occasion, Mr Doran stated that he had passed the necessary details on to one of his drivers, Mr Gormley. Upon being informed by Mr Gormley that he had been stopped, and that the load upon inspection having been found to contain cigarettes, he tried to phone Robert Kelly immediately that same evening, but with no success. When Mr Doran did manage to speak to Kelly the next morning, it was claimed, Kelly hung up the phone or switched it off.
12. Mr Doran in his evidence went on to explain how the tanker trailer was not the property of the Appellant, and that the company had purchased the vehicle in early April or May of 2001 for £13,500. The vehicle had been a 1995 model, which the Appellant had been financing on foot of a hire purchase agreement. Mr Doran went on in his evidence to explain the financial difficulties which seizure and loss of the vehicle had caused to him.
13. In cross examination, Mr Puzey for the Respondent began by suggesting to Mr Doran that his evidence was no more than a pack of lies. When asked about Robert Kelly in cross examination, Mr Doran stated that he had never met the man, and had never spoken to him in advance of August 2001, but that he had told him that he organised the delivery of loads of wax for the Deeside Paper Mill. Mr Doran was asked to produce the paperwork referable to the first incident free transaction as conducted with Robert Kelly; he replied that he was unable to do so, and admitted that he had available to him no documentation with which to evidence any previous business with Mr Kelly. He also accepted that he had not invoiced Deeside Paper in respect of the first transaction. When asked why Mr Doran replied that it apparently does not exist; he claimed that he had established this from a directory enquiries search. He was asked as to whether anyone had contacted him after the load was seized, to see what had happened to their wax. He admitted not having contacted Ghent, and went on to admit not having made either at the time or subsequently any enquiries of either the consignor or the consignee, other than an unsuccessful directory enquiry in respect of Deeside Paper. He was pressed as to why it would not have been possible for him to have contacted the consignee, and replied so as not to be able to take their work off them. Mr Doran did not accept that in this regard he had a no questions asked policy, but insisted that he had not known what was in the consignment. He was asked about the pick up of the tanker trailer from the Abax yard; no paperwork was needed it was claimed for this collection, since the yard was an open yard, with no security either to get in or out.
14. Mr Gormley also gave evidence on behalf of the Appellant. He confirmed that on the occasion in question he had been working for the Appellant, having previously worked for him the firm off and on for an eighteen month period. His evidence was that on this occasion, he had left Northern Ireland with the vehicle alone, and with no tanker or other trailer attached. On the directions of the Appellant, he travelled to the Abax yard in Liverpool where he picked up a trailer in the yard. He knew the yard, and had been there before. He had a number for the trailer. In the yard, he located the trailer, which turned out to be a tanker, connected it up and travelled via Dover and Calais to Ghent. In Ghent, outside the premises of Govi, he claimed to have left the tanker which he had collected in Liverpool, and to have picked up another one. It was also a tanker, there was a CMR in a container at the back. Mr Gormley said that he checked that the valve on the tanker was properly closed. He said that he understood the load to be wax. He stated that he did not see the load being pumped in or the tanker being otherwise filled up. Having located the filled tanker trailer in Ghent, Mr Gormley connected it up to the vehicle, and travelled homewards via Calais to Dover where he was subsequently stopped. Mr Gormley was asked to confirm if the Customs Officers had enquired of him as to how they could access the tank internally. He initially replied that he did not specifically remember being asked this question. He was asked whether at this stage he knew what the internal structure of the tanker was; he replied that he would have assumed that it would have been similar to any other tanker. He claimed not to have known that the tanker contained three compartments which were accessible only via the first compartment; nor to have known that the tanker in any way had been modified to as to enable goods to be concealed in its interior.
15. Subsequently in his evidence however, Mr Gormley did recall taking the lids off on the top of the tanker whenever he was asked how to access the tanks. He recalled climbing up on top of the tanker with a Customs Officer and being asked to produce a dipstick, which he did. When the tanks were dipped, and found to contain only a small depth of liquid, Mr Gormley stated that he was surprised to say the least. When he was asked if he had made a remark about the front compartment, Mr Gormley stated that he did pass such a remark as he was leaving the premises. He claimed that about an hour into the arrest and seizure operation, he had been asked by Mr Maslen, one of the Customs Officers, 'how would you get in'? Mr Gormley stated that his reply to Maslen had been 'if it wee me, I would pump the stuff out of the first compartment'. Mr Gormley stated that no criminal proceedings had ever arisen out of this incident, and he insisted that he had been wholly unaware of the contents of the tanker trailer.
16. In cross examination, Mr Gormley was asked about previous trips which he had made in the period immediately prior to the night of the incident in question. He was asked specifically about a journey on 9 August 2002 whenever he appeared to have gone out empty and also to have returned empty. He was asked who he had dealt with in Ghent. He replied that he had not dealt with anybody, nor spoken to anybody. So far as the first trip to and from Ghent had been concerned, he had not spoken to or dealt with anyone. Mr Doran on that occasion had given him the necessary details; bring out such and such a trailer, bring back such and such a trailer. His evidence was that both on the incident free first occasion, and on the second occasion leading up to the interception, he had left the empty tanker trailer outside the factory, on the roadside, together with a lot of others. Mr Gormley was referred to the CMR Convention; he stated that he had been a lorry driver for 30 years, but had never heard of the Convention. He was referred to the CMR, which stated that the name of the carried was 'Jones Tankertrans'. Mr Gormley stated that this was who he understood Dorans were working for; he admitted having seen no documentation from Jones Tankertrans.
17. Mr Gormley was asked about checks which he had made to the tanker trailer. In cross examination he stated that he had carried out no checks, save for the valve and the lids. He checked that the lids were closed. Mr Gormley stated that he did not consider it necessary for him to check the contents of the trailer; he had carried this trailer out and back before. Checks had not been necessary then, and he had not considered them necessary on this occasion. Mr Gormley was also pressed about his comment made to Officer Maslen about pumping out the front compartment. He was asked to explain why he had specified the front compartment; he could not remember why, but again denied that he knew that the remainder of the tanker trailer was full of cigarettes. His attention was drawn to the fact that the CMR suggested the tanker to have been full with wax upon its collection, and to the fact that, as subsequent inspection revealed the first compartment was completely empty, and the second and third compartments filled with cigarettes. Mr Gormley denied that the load felt to him as being anything other than a full load. Mr Gormley accepted that after the interception, he also had made no attempt to speak to Govi or anyone else about the cigarettes, but specifically denied when it was put to him in clear terms that he knew that he had just under 2 million cigarettes in his possession whenever he entered the port of Dover on the night of the interception.

Evidence on behalf of the Respondent

18. The Respondents' evidence to the Tribunal was given by Mr Philip Andrew Hodgson and by Mr Clive Maslen, both Customs Officers based at the port of Dover. Evidence was also given by Mr David Michael Harris, the Review Officer. Mr Maslen had carried out the initial interception, had asked Mr Gormley to move the vehicle to a covert examination bay, and had carried out the scanning operation. He described the findings of the scan, produced a copy of the scan result, and described in detail the alterations which had been carried out to the interior of the tanker so as to enable it to conceal illicit excise goods. His evidence made it clear that the only way for the cigarettes to have been loaded, and for them to have been unloaded would have been via the front empty compartment. Mr Maslen sought to attach considerable significance to the remark made by Mr Gormley concerning pumping out of the front compartment. He however somewhat reluctantly accepted that there have been an error in the recording of the contemporaneous recording of the notes taken by him in his notebook at the time, with the result that the notes did not record some of the questions and answers passing between himself and Mr Gormley in precisely the sequence in which they had actually been made. Mr Maslen sought to describe how he opened up all three lids on top of the tanker trailer with Mr Gormley in attendance with him at the top of the ladder. Mr Maslen denied ever having dipped the three false pots of paraffin. On the issue of the remark made by Gormley, Mr Maslen did not think it possible that the observation made by Mr Gormley about the need to pump out the front compartment had only been made after all of the discoveries concerning the cigarettes had already been made. Both Maslen and Hodgson accepted that Mr Gormley had afforded to them full cooperation.
19. Evidence was also received from the Reviewing Officer, Mr Harris. This witness explained that his function was to look at the decision referred to him, together with the paperwork presented to him; he confirmed access to the interview notes and records, to the notebooks kept by Officers Maslen and Hodgson, to the seizure documentation, to the correspondence from the Appellant's solicitors, including the testimonials, and to the scanner documentation. Mr Harris also had the previous travel details referable to the vehicle in respect of crossings between Dover and Calais. Mr Harris' evidence was that he made his decision on review in accordance with the relevant Customs policy document, a policy which had been drafted with input from the Road Haulage Association, which had been implemented as and from 16 July 2001, and which since that date had been widely publicised in ports and on cross Channel vessels. In essence, the thrust of Mr Harris' evidence was that he arrived at the decision not to restore the vehicle because he rejected the claims put forward by and on behalf of the Appellant to the effect that the Appellant had been unaware of the contents of the tanker trailer. He described the CMR as being one clearly made up on the spot, in that it was handwritten, incomplete, poorly presented, and bore no reference to the Appellant whatsoever. He explained that he had tried without success to locate Deeside Paper Mill; there was a Deeside industrial estate, but no paper mill in the estate. He sought to describe the claims about the Abax yard in Liverpool as being similarly implausible. He described the alterations to the tanker trailer as having been substantial, and as amounting to a very professional concealment. The alterations were not such as would have been knocked up in an afternoon. He confirmed that the illicit importation would have involved a total loss of Revenue to Customs of £383,835 being duty and VAT; that figure consisting of £310,493 duty and £73,342 VAT. He suggested that he had no reason to believe that this failed attempt had been the first attempt to effect the illegal importation of excise goods by means of this trailer. He made reference to the schedule of previous journeys involving this vehicle, and sought to suggest that an unusual delay taken during the course of the first trip might suggest that time was being taken during that period to adapt this trailer 2826 for subsequent illegal use. Another trailer previously used in conjunction with this vehicle, namely 2824 had not as yet returned to this country; Mr Harris having checked the position in this regard as recently as the week before the hearing.
20. It was drawn to the attention of Mr Harris in cross examination that he had decided the matter on review on an entirely different basis to that relied upon at the time of the original decision not to restore. He accepted that this was so. The original decision had placed reliance upon section 88 of the 1979 Act. Mr Harris described the statutory basis for that original decision to have been incorrect. He placed reliance upon section 141. He accepted that he did not contact or specifically inform the Appellant in advance as to whether or not he was proposing to base his review decision upon a different provision that previously relied upon. He stated that his function was to consider the matter afresh, and to consider afresh whether or not restoration should be offered. That is what he said he did. In cross examination, Mr Dowd for the Appellant sought to criticise Mr Harris for having based his decision upon an imperfect and indeed mistaken understanding of the contemporaneous notes; in that he had failed to appreciate or take into account the fact that 6the remark made by Gormley concerning the need to pump out the front tank was not made at the stage whenever the notes on their face suggested that it had been made. Mr Harris rejected this, and stated that it mattered not when Mr Gormley made the remark; the importance lies in the fact that he made the remark at all. In cross examination counsel for the Appellant also sought to criticise Mr Harris for not himself having initiated certain further or additional empirical enquiries into the matter, and for not having sufficiently taken into account ; the testimonials submitted in respect of Mr Doran, the absence of nervousness on the part of Gormley during the course of the interception and search, the cooperation afforded by Gormley to the Customs Officers undertaking the search. Mr Harris' response was to state that he had carried out further enquiries so far as he had been able to do so, and so far as he considered the same to e appropriate, so far as the testimonials were concerned, and the behaviour of Mr Gormley, whilst he did take these into account, he did not consider then sufficient to outweigh the factual conclusions which he arrived at on the basis of the material before him.

The statutory framework

21. [a] The cigarettes which were found in the tanker trailer attached to the Appellant's vehicle were subject to excise duty upon importation by virtue of section 2[1] of the Tobacco Products Duty Act 1979;

[b] Section 49[1][a][i] of the Customs and Excise Management Act 1979 [CEMA] provides inter alia that where any imported goods, being goods chargeable on their importation with customs or excise duty, are without payment of that duty unshipped at any port those goods shall be liable to forfeiture;

[c] Section 141[1][a] & [B] pf CEMA provides inter alia that where anything has become liable to forfeiture under the Customs and Excise Acts, any vehicle which has been used for the carriage, handling or deposit of the thing so liable for forfeiture shall also itself be liable to forfeiture;

[d] Section 152[b] of CEMA provides that the Commissioners may as they see fit, restore, subject to such conditions, if any, as they think proper, anything forfeited or seized;

[e] This current appeal concerns an appeal from Mr Harris' decision on review not to restore the seized vehicle to the Appellant. The current appeal is available to the Appellant by virtue of certain provisions of the Finance Act 1994. Sections 14 to 16 of the Finance Act 1994 whenever read together with Schedule 5 of the 1994 Act provide for a two tier system of review and appeal of decisions including a decision whether to forfeit. Under Schedule 5 of the 1994 Act, a decision whether or not to forfeit a vehicle is deemed to be a decision 'as to an ancillary matter'.

[f] Section 16[4] of the Finance Act 1994 goes on to provide:

'In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the owners 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 that 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 direction of the tribunal, a further review of the original decision; and

[c] in the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in future'.

[g] For the tribunal therefore to be able to exercise in connection with the current appeal its powers under section 16[4] of the Finance Act 1994 as outlined above, it must be satisfied that the Commissioners or such other person as made the decision on review not to restore to the Appellant the seized vehicle could not reasonably have arrived at that decision.

Submissions on behalf of the Appellant

22. The Appellant's submissions can be summarised as follows:

[a} The Appellant sought to distinguish the facts of this case from those applicable in the recent decision arrived at by this tribunal in Crilly v Commissioners of Customs and Excise, Case No.LON/02/8047. There, it was contended, the thrust of the appeal was directed against the lawfulness and proportionality of the policy on foot of which the decision on review had been taken. Here, it was suggested, the thrust of the appeal was not against the policy on seizure and non restoration, but rather on the application of that policy to facts of the present case, and in particular to the decision arrived at to categorise the Appellant and its driver as falling within the scope of responses applied by the policy to those involved in illegal smuggling activities.

[b] The Appellant contended that he and his business had been the unwitting victim of a sophisticated criminal enterprise, in which he had no involvement. Reliance was placed upon the modest size of the Appellant's business operation in August 2001; the Appellant would not have had the resources to carry out the type of checks suggested by /customs. Moreover, it was suggested that if such checks had been routinely carried out, there would have been a risk that customers would have considered their good faith was being doubted. In assessing the extent of the checks and precautions which ought to be or ought to have been carried out, it was contended the tribunal should have regard to the everyday realities of the Appellant's business. Furthermore, on the facts, it was contended that the Appellant had no reason to be suspicious. Reliance was placed upon the decision in McGeown Haulage Ltd v Commissioners of Customs and Excise, Case No. LON/02/8188;

[c] It was contended that in arriving at the decision on review, Mr Harris had failed to take into account matters which ought properly to have been taken into account; the business realities of the international haulage business; the fact that in a competitive industry instructions are given and have to be received and accepted on mobile phones. In addition, it was contended that to refuse to effect restoration of the vehicle in all the circumstances constituted an unreasonable and disproportionate response for the making of an honest mistake on the part of the Appellant and his driver Gormley.

[d] It was also contended that the decision on review was flawed insofar as it failed to make clear that the original decision at first instance was incorrect, and that the decision on review was being taken on wholly separate and distinct grounds. Nowhere in the review decision had it been accepted that the original decision had been incorrect, although Mr Harris had admitted this in his evidence to the tribunal. There was accordingly a failure to give proper reasons for the decision, as criticised in Alzitrans SL v Commissioner of Customs and Excise, [2003] EWHC 75. The decision on review also, it was contended failed to take into account the relaxed demeanour of Gormley at all times during the course of the interception, and his accepted full cooperation with the two Customs Officer involved.

[e] The Appellant also sought to criticise the attitude which had been adopted by Customs to the evidence of the Appellant and its witnesses during the hearing. It was suggested that the Respondent could not make up its mind as to whether to accuse the Appellant and Mr Gormley of being complicit in the loading of this tanker trailer, or whether in the alternative to accuse them of simply turning a blind eye.

[f] The Appellant also sought to undermine the decision on review on the ground that it had been taken on the basis of an erroneous understanding of the contemporaneous notes. It was suggested that if the reviewing officer had arrived at his decision on an erroneous understanding of the facts, that would enable the tribunal to grant the appeal. It was also suggested that Mr Harris had not acted fairly; had chosen to investigate some matters, but not others. It was contended that on the part of the Respondent, there had been a determined attempt to paint the Appellant company in an unfavourable light.

Submissions on the part of the Respondent

23. It was contended on behalf of the Respondent that on the facts of the case, this was either a case of the Appellant being complicit in the illegal importation of the cigarettes, or alternatively a case of the Appellant and his driver being wholly reckless as to the legality of the enterprise which he was involving himself in. The Respondent's case was that the Appellant had been complicit in the attempt at smuggling. The Appellant for its part denied that emphatically. Even if the tribunal, it was contended against the weight of the evidence accepting the denial, this was then manifestly a case of the Appellant and his driver accepting a suspicious consignment with no questions asked, and turning a blind eye to what it was suggested must have been the inevitable.

Conclusions

24. The tribunal did not find the evidence of either Mr Doran or of Mr Gormley to be entirely satisfactory or convincing. In the assessment of the tribunal, even assuming the factual assertions put forward by Mr Doran and Mr Gormley to have been entirely accurate, there were undoubtedly upon any reasonable or realistic assessment many aspects of this alleged haulage arrangement as allegedly entered into between the Appellant and the mysterious Mr Kelly which were deeply suspicious, and which in the estimation of the tribunal would almost inevitably have put the reasonably prudent haulier on their guard right from the outset, even one such as the Appellant only operating in a limited way of business. The fact that no personal contact had ever been made with Mr Kelly, the fact that the Appellant had no previous business or personal knowledge of him whatsoever, the fact that no documentation ever emanated from him or from his alleged employer or client, the fact that an empty trailer was to be picked up without documentation from an open and insecure yard area without documentation, the fact that the same empty trailer once on the continent of Europe was to be exchanged with a filled tanker trailer not inside the factory premises of the consignor but instead on the roadside, the fact that a valuable cargo of, as it was claimed, paraffin wax, and as it turned out 2 million cigarettes, were to be left for collection in an insecure location, for collection without documentation, and then upon return to the UK to be left again for further collection and onward transit in the same insecure and open yard from which the empty trailer had earlier been collected: all these are factors which in the assessment of the tribunal would have led a prudent haulier acting honestly and appropriately to have seriously questioned the propriety of the undertaking which he was embarking upon. We have found it difficult to accept the factual claims advanced by and on behalf of the Appellant as to how this consignments came to be imported into the United Kingdom, and conclude on the basis of the evidence which we have heard and considered, that the tribunal has not received from either Mr Doran or from Mr Gormley the full story behind these events.
25. Mr Doran also claimed that there was nothing unusual in the approach which he had adopted in response to the telephone calls and instructions received from Mr Kelly. He claimed that his response was in accordance with what others would similarly have done pursuant to the practical realities. The tribunal did not accept these assertions. Perhaps Mr Doran's evidence would have been somewhat more persuasive in this regard if the tribunal had heard evidence from some source other than Mr Doran to suggest that informal contacts such as here took place were commonplace in the industry, and that Mr Doran's response would not have been in any way out of the ordinary amongst his trade competitors. No such evidence was however adduced before the tribunal. The tribunal was accordingly on the basis of the evidence presented before it to conclude that Mr Doran was correct whenever he claimed that his practices in this instance were not simply standard form for his own business operation, but would additionally not have been in any way unusual for the industry as a whole. This was not a conclusion which the tribunal considered itself able to arrive at.
26. The tribunal also found it difficult to accept that if the Appellant had been acting entirely properly, it would not after the events have pursued the elusive Mr Kelly somewhat more earnestly than appeared ever to have been the case. One unsuccessful telephone call to the directory enquiries service appeared to amount even on his own evidence to the height of Mr Doran's pursuit in this regard. No attempt had been made to discover who in reality Mr Kelly had been; no contact had been made by the Appellant with the industrial estate in Deeside; nor with the Abax yard, nor with the Govi factory in Belgium to discover if any of them could have assisted with enquiries. Mr Doran had not even, it appeared, made an attempt to discover who had been using the telephone number which he had called to inform the man claiming to be Mr Kelly of the interception and seizure. Any such attempt might well have proved ultimately fruitless or impossible, but it appeared that Mr Doran had not even tried. Moreover, Mr Doran was not able to produce any documentation whatsoever relating to the previous successful business transacted for Mr Kelly, nor was there any explanation presented to the tribunal as to why such documentation should not have been available.
27. The tribunal accordingly found no evidence to support the Appellant's contention that the facts demonstrated that it had simply been the unwitting victim of a sophisticated criminal enterprise.
28. It is clear that Mr Maslen, one of the Customs Officer undertaking this interception, had created a certain amount of confusion in respect of his preparation of the sequence of entries in his notebook. That confusion, and the uncertainty which it gave rise to, made it impossible for the tribunal to arrive at any clear finding of fact as to precisely when the remark made by Mr Gormley concerning the advisability of pumping out the front compartment of the tanker trailer was made by him. About the fact that the remark had indeed been made, there was no dispute; the remark had certainly been made by Gormley, that much was common case. The dispute was as to precisely when the remark had been made either during the attempts by Customs Officers to obtain access to the interior of the tanker trailer, as alleged by the Respondent, or alternatively just as Mr Gormley left the premises at the end of the operation, as alleged by the Appellant. We are unable to arrive at a clear finding of fact as to when this remark was made by Gormley. However, that fact does not prevent the tribunal from nevertheless being able to attach significance to the remark. The significance of the remark does not, it seems to us, to lie in precisely when it was made, but rather in the fact that it was made, and that Gormley was in a position to make it at all, irrespective of precisely when it was made. The content of the remark provides, we consider, a strong indication that Mr Gormley knew that the only means of obtaining physical access into the second and third compartments was from the first compartment. That would not have been apparent from anything visible on the exterior of the tanker trailer, nor would it have been apparent from the scanning image, even if Mr Gormley had seen it in advance of making the remark> Mr Gormley was only able, we consider, to make the remark, because he knew something of the precise manner in which the interior of this tanker trailer had been adapted and modified. That may have been because he was present at the time of its loading, or not; we make no findings of fact in that regard because there was no evidence from which we could conclude that Mr Gormley was actually present whenever the tanker trailer was loaded. We are however satisfied that the making of the remark by Gormley, quite irrespective of precisely when it was made, reveals that in reality Mr Gormley knew more about the internal structure of this deliberately modified trailer than he was prepared to admit to the tribunal.
29. Nor do we consider that Mr Harris did in any respect fail to take into account proper considerations for him to have regard to. We accept that in carrying out his review, he did attach such weight to the testimonials submitted on behalf of the Appellant as they probably warranted. We accept that the weight of this type of testimonial has to be considered to be significantly less significant that empirical evidence relating to the conduct of a person upon a given occasion. Nor do we consider that there was, as alleged, any failure to give proper or adequate reasons, so far as the Reviewing Officer was concerned. In our assessment, the decision on review dated 30 October 2001 was set out in straightforward and easily understood terms, with clear reasoning attached. It is in our view not to be faulted by reason of the fact that the reviewing officer based his decision upon a different ground than had been relied upon at first instance.
30. In the review decision, Mr Harris set out as a key component of the Respondent's policy the fact that in respect of those drivers and hauliers who were unable to satisfy Customs that they were not actively involved in the smuggling operation leading to the illicit importation of excise goods, there would be upon first detection the seizure of any vehicles involved, and non restoration of the same. The Respondent categorised the Appellant and his driver as falling within that category of persons. For the reasons set out above, we are unable to describe that decision as unreasonable. It seems to us that on the facts and evidence which we have heard, on the balance of probabilities, the Appellant and its driver were either knowingly complicit in this attempt at the smuggling of more than 2 million cigarettes, or in the alternative they were reckless as to what in reality what was going on.
31. Here, the duty and VAT sought to be avoided was in the total sum of £383,835. The vehicle seized was a six year old 1995 Scania tractor unit. On the basis of the findings set out above, the tribunal does not consider the seizure to have been anything other than reasonable and proportionate, within the scope of the test previously laid down by the European Court of Human Rights at paragraph 36 of its judgment in Air Canada v United Kingdom [1995] 20 EHRR 150 at 173. This appeal is accordingly dismissed. There will be no order as to costs.

ALISTAIR F W DEVLIN

CHAIRMAN

RELEASED:01/07/2004

LON/01/8284