[2013] UKFTT 330 (TC)
TC02733
Appeal number: TC/2013/00276
EXCISE DUTY – restoration –
decision not to restore tractor and trailer – decision sent by fax to Appellant
– no request for review within 45 days – application made nine months later and
refused by Border Force – whether appropriate to order review – no – held on
evidence that Appellant received complete decision by fax – held in the
alternative that receipt of incomplete fax should have put Appellant on enquiry
as to nature of letter – absence of justification for ordering late review –
absence of review precluded appeal against restoration
FIRST-TIER TRIBUNAL
TAX CHAMBER
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MATSKAS TRANS
LIMITED
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Appellant
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- and -
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THE DIRECTOR OF
BORDER REVENUE
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Respondent
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TRIBUNAL:
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JUDGE JOHN CLARK
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JANE SHILLAKER
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Sitting in public at 45 Bedford Square, London WC1B 3DN on 3 May 2013
Christina Angelides for the
Appellant
Rupert Jones of Counsel,
instructed by the Respondent
© CROWN COPYRIGHT
2013
DECISION
1.
The Appellant (“MTL”) appeals against the refusal by the UK Border Force
of a late request for a statutory review of a decision dated 27 February 2012
by Border Force to refuse restoration of a tractor unit and trailer seized on
21 December 2011.
2.
For the purposes of considering the appeal, we were provided with a
bundle of documents prepared by the Respondent (“BR”). This included a witness
statement (with exhibits) given by Graham Crouch, a Higher Officer of Border
Force currently employed as a Review Officer.
The relevant law
3.
The effect of s 14 of the Finance Act 1994 (“FA 1994”) is that a person
affected by a decision as to whether or not seized items are to be restored may
request a review of that decision. However, this is subject to s 14(3) FA 1994,
which provides:
“(3) The Commissioners [ie now, BR] shall not be
required under this section to review any decision unless the notice requiring
the review is given before the end of the period of forty-five days beginning
with the day on which written notification of the decision, or of the
assessment containing the decision, was first given to the person requiring the
review.”
4.
Section 14A FA 1994 provides:
“14A Review out of time
(1) This section applies if—
(a) a person may, under section 14(2), require
[HMRC] to review a decision, and
(b) the person gives notice requiring such a
review after the end of the 45 day period mentioned in section 14(3).
(2) [HMRC] are required to carry out a review of the
decision in either of the following cases.
(3) The first case is where [HMRC] are satisfied
that—
(a) there was a reasonable excuse for not giving
notice requiring a review before the end of that 45 day period, and
(b) the notice given after the end of that
period was given without unreasonable delay after that excuse ceased.
(4) The second case is where—
(a) [HMRC] are not satisfied as mentioned in
subsection (3), and
(b) the appeal tribunal, on application made by
the person, orders [HMRC] to carry out a review.
. . .”
Arguments for MTL
5.
Ms Angelides explained that Mr Teodoros Orphanidis was the director of
MTL. MTL’s vehicle had been stopped on 21 December 2012 at Dover. Instead of
the type of cargo thought to be in the lorry, a quantity of cigarettes had been
concealed within what appeared to be the cargo. No charges had been made
against Mr Orphanidis, who had subsequently been released. He had been
accompanied by another driver.
6.
Exchanges of correspondence with the former UK Border Agency (“UKBA”)
had then taken place, in which MYL had requested restoration of the vehicle. On
27 February 2012 UKBA had indicated that it had faxed a letter saying that it
had decided not to restore the lorry. Mr Orphanidis’ case was that he had only
received the first page; as he had not received the rest of the notes attached,
he had been denied his statutory rights. He had asked UKBA if he could appeal
out of time, but his request had been refused.
7.
Ms Angelides emphasised that Mr Orphanidis was not shown that there were
more pages of the decision letter. She referred to his inability to speak or
understand English; he had an accountant who spoke English and had assisted him
in dealing with the correspondence.
Arguments for BR
8.
Mr Jones indicated that MTL’s request for a late review was opposed by BR. The application was being made by MTL, and the burden of proof fell on MTL. The test
was set out in s 14A FA 1994. Sub-section (4)(b) did not specify the test to be
applied by the Tribunal; Mr Jones submitted that it was not the “reasonably”
test. (This shorthand reference needs to be explained; the test is to examine
whether the authority in question, here UKBA, had acted in a way that no
reasonable authority could have acted, or whether it had taken into account
some irrelevant matter or had disregarded something to which it should have
given weight. For the reasons set out below, we accept that this is not the
appropriate test for us to apply.) He further submitted that the Tribunal
should be slow to interfere with the decision not to allow a review out of
time; the import of the legislation was that the Tribunal should not interfere
with decisions unless they were unreasonable.
9.
He referred to the judgment of Laddie J in Customs and Excise
Commissioners v Ronald Angliss [2002] EWHC 1311 (Ch) (unreported), in
particular to [34]:
“It follows that I do not accept the Tribunal’s view
that because Mr Angliss may have lost the right to appeal to the Tribunal, his
Article 6 rights have been breached. It is to be noted that the Tribunal did
not suggest that there was anything inherently unfair or unworkable in the
three-stage appeal procedure created by ‘CEMA’ [the Customs and Excise
Management Act 1979] and [FA 1994]. Nor was it suggested that the 45-day period
for applying for a Review was in any way unfair or too restrictive. If anything
it is generous to persons in Mr Angliss’ position.”
10.
Mr Jones argued that these views fed into the factual argument; even if
MTL’s argument was correct (which was not accepted), it had had adequate time
to seek information. He argued that MTL had received the three pages of the
letter dated 27 February 2012; if this argument was not accepted, he argued
that MTL had behaved unreasonably. We consider below his detailed arguments on
these two factual issues.
Reasons for our conclusion
11.
After hearing both parties’ submissions, we retired to consider the
matter and returned to announce our conclusion, which was that MTL’s
application for a review out of time had to be refused. We indicated that we
would set out our reasons in this decision.
12.
Before considering the factual issues, we need to address Mr Jones’
submissions that the Tribunal should be slow to interfere with BR’s decision
not to admit MTL’s “out of time” request for a review and that the implication
of the legislation was that the Tribunal should be slow to interfere with
decisions unless they were unreasonable.
13.
Section 14A(2) FA 1994 requires BR to carry out a review of a decision (“the
original decision”) in either of two circumstances. The first (set out in s
14A(3)) is where BR is satisfied both that there was a reasonable excuse for
the relevant person’s delay in giving notice requiring a review, and that the
notice was given without unreasonable delay after that excuse ceased. The
second (set out in s 14A(4)) is where BR is not so satisfied, and following an
application by the person concerned, the Tribunal orders BR to carry out a
review.
14.
Our reading of s 14A FA 1994 is that the Tribunal in dealing with an
application under s 14A(4) is not required to review the decision-making
process carried out by BR in arriving at the view that it was not satisfied as
to the matters referred to in s 14A(3). Mr Jones’ reference to being slow to
interfere with BR’s decision might appear to imply a contrary position. In our
view, the Tribunal is required to consider the matter afresh, on the basis of
the available evidence as to the circumstances leading to the delay in
requiring a review to be undertaken.
15.
In arriving at these conclusions, we taken into account the analysis by
Laddie J in Ronald Angliss. At [21], he stated:
“As the Tribunal noted at paragraph 14 of the
decision under appeal, its authority is given by s 16 of [FA 1994]. It has no
wider or inherent jurisdiction. In particular, the Tribunal has no power to
carry out a review of the exercise of the Commissioners’ [now the BR’s]
discretion to entertain applications for review out of time. It has no power to
decide that the Commissioners should have treated circumstances as exceptional
and thereby justified an extension of the 45 day limit. Inevitably it follows
that the Tribunal has no power to intervene when an affected party has failed
to seek a review in time even if it believes it would have been fair or
reasonable to so.”
16.
In the light of these principles (and taking into account the fact that
s 14A FA 1994 was added in 2009, well after Ronald Angliss), we consider
the evidence relating to MTL’s delay in seeking a review.
17.
On the first factual issue, whether MTL had received the three pages of
the decision letter, Mr Jones argued that there had been a long history of fax
correspondence. In relation to that other correspondence, it had all got
through, as MTL had responded. Further, the transmission details for the 27
February 2012 letter showed “OK – 3/3”. He submitted that MTL had not provided
enough evidence to displace this record.
18.
As MTL is making the application, the burden of proving that it had not
received the second and third pages of the faxed letter falls upon MTL. The UKBA’s
record sheet of the fax transmission shows the number of pages transmitted as
three, and the result as “OK”. As there was no evidence of any problems with
receipt by MTL of any other faxes from UKBA, and clear evidence of response by
it to all the faxed correspondence apart from the 27 February 2012 letter, we
find on the balance of probabilities that all three pages of the letter did
reach MTL.
19.
Even if we were found to be wrong in arriving at the latter conclusion,
the acceptance by MTL that it did receive the first page of the faxed letter
raises other questions, as Mr Jones submitted. That page referred to UKBA’s
earlier letter concerning MTL’s request for the restoration of its seized
tractor and trailer, and set out details of “The Seized Things”. Thus it
contained no information as to UKBA’s views on the request for restoration.
Further, other than the details of UKBA and the sending office, the National
Post Seizure Unit, it contained no indication of the individual in that office
responsible for the letter, and in particular it contained no signature.
20.
Mr Jones argued that receipt of a single page of this nature should have
put MTL on “a trail of enquiry”. Would the recipient not at least be prompted
to ask whether something was missing? Mr Jones further argued that MTL would
have been acting unreasonably if it did not pursue the matter, given that the
history of the correspondence showed that MTL was receiving replies within days
of its communications. If this letter was not a reply, what was it about? Why
was there no answer to the request for restoration? In BR’s view, it would have
been unreasonable not to follow the matter up, if it were to be accepted that
MTL had only received a single page as it contended.
21.
We accept Mr Jones’ argument on this second factual issue. If it were to
be accepted that MTL only received one page of the 27 February 2012 fax, we
consider it unreasonable for it not to have questioned UKBA as to the meaning
of that communication.
22.
After 27 February 2012, the first action taken by MTL in relation to the
issue of restoration was a telephone conversation at some time before 16
November 2012 between Ms Angelides and Mr Gray of the Post Seizure Unit. On the
latter date, she wrote a letter to the Post Seizure Unit, explaining that she
had been asked to represent MTL in relation to the issue of restoration; Mr
Gray had informed her that a non-restoration order had been decided and that
the truck and trailer had been auctioned. She stated that MTL had not received
any correspondence from UKBA relating to its decision and therefore had not
been in a position to submit an “appeal” within the time limit of 45 days. She
stated that MTL had been “continuously sending letters that were never replied
to as to the progress of your decision to restore or not”.
23.
In an email sent on 23 November 2012, Ms Angelides stated:
“My client claims that he did not receive any
notification of this decision and was therefore not in a position to appeal
within the 45 day limit.”
24.
In an email dated 27 November 2012, Ms Angelides stated:
“Having looked through the faxes sent by the post
seizure unit there was a fax sent on the 28th [sic] February 2012 which was
advising Mr T. Orphanides [sic] of [MTL] that the tractor unit and
trailer were liable to forfeiture.
However there was no written advise [sic]
attached to the fax of any time limit to appeal neither the steps for your
appeal procedures, it was simply a notification of your decision. In the
circumstances my client was not fully informed of his rights and was not in a
position to fully comprehend what to do next.”
25.
We find that there was a very substantial delay between 27 February 2012
and the point before 16 November 2012 at which Ms Angelides made contact with
UKBA. There was no evidence that any correspondence had been exchanged in the
intervening period. We further accept Mr Jones’ argument that the approach
taken on behalf of MTL in seeking to pursue its claim from November 2012
onwards was not consistent; although it had been claimed that MTL had received
no notification of the decision, it was ultimately accepted that it had
received some form of communication on 27 (rather than 28) February 2012.
26.
We have set out above our findings on the evidence, that MTL did receive
all three pages of the 27 February 2012 fax, or that in the alternative, its
failure to act to enquire as to the meaning of a single unsigned page carrying
no signature and setting out no conclusion amounted to unreasonable behaviour.
27.
Taking into account the lengthy delay before any further action was
taken to pursue MTL’s claim, two questions arise. If our first (and principal)
finding is correct, UKBA’s letter did set out on its second and third pages the
requirement that a request for review of the decision should reach UKBA within
45 days of the date of the letter. It also referred to the possibility, if
there was no request for a review of the decision, that the tractor and trailer
might be sold, and to the consequent implications for any third party who might
have a claim to them. If MTL had that information in February 2012 and took no
further action in respect of its claim until November 2012, would this Tribunal
be justified in deciding under s 14A(4)(b) FA 1994 to order BR to carry out a
review?
28.
The second question is whether, if MTL did not receive the second and
third pages of the 27 February 2012 faxed letter, its failure to take any
action to follow up the matter until November 2012 amounted to behaviour so
unreasonable that this Tribunal would not be justified in deciding to order
such a review.
29.
On the first question, our conclusion in the light of the substantial
delay is that it is not appropriate to order BR to carry out a review; we do
not consider that MTL had a reasonable excuse for the delay. On the second
question, our conclusion is that if it were relevant to consider it, we would
not be justified in arriving at a decision to order a review; again, the lack
of prompt action following receipt of the first page of the faxed letter would
mean that we did not consider MTL to have had a reasonable excuse for the delay
in requesting a review.
30.
Reference was made in correspondence to MTL being required to appeal
within 45 days. This is not a correct description of the position; in Ronald
Angliss at [22], Laddie J explained the limits on the Tribunal’s powers:
[22] . . . a person adversely affected by forfeiture
or seizure cannot reach the Tribunal unless he has asked for a review by the
Commissioners [now BR] of the Commissioners’ First Decision [ie the decision
whether the goods in question should be returned, and, if so, on what terms].
This is apparent not only from the wording of s 16(1) [FA 1994], but is also an
inevitable consequence of s 16(2). The only person who can bring an appeal
before the Tribunal is a person who asked for the Commissioners to carry out a
review. If a review was not sought, there is no one who can bring an appeal.”
31.
In his judgment at [20], the procedure was described in the following
terms:
“These provisions thus provide for a precisely
defined sequence of steps which can lead to an appeal before the Tribunal. To
summarise, the essential sequence is (1) [BR] forfeit or seize goods, (2) [BR]
can decide – the Commissioners’ First Decision – whether to restore the goods
and, if so, on what terms, if any, (3) a person adversely affected by the
latter can ask [BR] to review, (4) the notice of application for a review must
be lodged before the end of 45 days from the Commissioners’ First Decision, (5)
[BR] must give their decision – the Commissioners’ Review – within 45 days of
the notice of the application, failing which the Commissioners’ First Decision
will be deemed to have been confirmed and (6) an appeal lies to the Tribunal
from the Commissioners’ Review.”
32.
Thus the judgment of Laddie J in Ronald Angliss makes clear that
no appeal can be made to the Tribunal if there has been no review of the
original decision not to restore the items in question, ie in the present case
the tractor and trailer. Section 14A FA 1994 enables the relevant person to
apply after the normal 45 day time limit for a review, but this will only occur
if either BR is satisfied as to the matters set out in s 14A(3) or the Tribunal
is persuaded under s 14A(4) to order BR to carry out a review. As we are not
persuaded, on the evidence before us, that MTL had a reasonable excuse for the
delay, it follows that there will be no review and therefore no right of
appeal.
33.
MTL’s application for a review out of time is therefore dismissed.
Right to apply for permission to appeal
34.
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.
JOHN CLARK
TRIBUNAL JUDGE
RELEASE DATE: 4 June 2013
