" 38. In the course of argument, it emerged that the respondents took a broader view of the jurisdiction of the Tribunal than might have at first appeared. They were invited to set out in writing their views upon the jurisdiction of the Tribunal and Mr Parker provided the following written submission:
"1. The Tribunal has found that:
'the Commissioners have taken a policy decision not to restore properly seized goods. There are no exceptions to this. Even innocent failures to pay excise duty will not qualify as exceptions to the policy. The Commissioners regard themselves as exercising that power to deter illegal activities and to stamp our smuggling.' ( Gora , para 33)
...
The Commissioners accept:
...
e. Strictly speaking, it appears that under s 16(4) of the 1994 Act, the Tribunal would be limited to considering whether there was sufficient evidence to support the Commissioners' finding of blameworthiness. However, in practice, given the power of the Tribunal to carry out a fact-finding exercise, the Tribunal could decide for itself this primary fact. The Tribunal should then go on to decide whether, in the light of its findings of fact, the decision on restoration was reasonable. The Commissioners would not challenge such an approach and would conduct a further review in accordance with the findings of the Tribunal."
I would accept that view of the jurisdiction of the Tribunal subject to doubting whether, its fact-finding jurisdiction having been accepted, it should be limited even on the "strictly speaking" basis mentioned at the beginning of paragraph 3(e). That difference is not, however, of practical importance because of the concession and statement of practice made by the respondents later in the sub-paragraph. As a "tribunal" to which recourse is possible to challenge a refusal to restore goods under section 152(b) of the 1979 Act, the Tribunal in my judgment meets the requirements of the Convention. "
Whilst not binding on this Tribunal, in Harris v Director of Border Revenue [2013] UKFTT 134 (TC) , at [8], Judge Helier said this:
"It is important to remember that a conclusion that a decision is not unreasonable is not the same as a conclusion that it is correct. There can be circumstances where different people could reasonably reach different conclusions. The mere fact that we might have reached a different conclusion is not enough for us to declare that a conclusion reached by UKBA should be set aside."
We have derived considerable benefit from reading the review decision and from hearing Border Force Officer Clark and we found him to be a credible witness who clearly set out the Respondent's policy and the matters taken into consideration in reaching the decision not to restore the Trailer.
Q. Was irrelevant material taken into account and was any relevant information ignored?
The Respondent's policy in relation to the decision under appeal can be summarised as follows:
" a. Under the policy, restoration of vehicles may be considered where the total quantity of drugs involved does not exceed the following limits:
...
i. 100g of Class A drugs (including cocaine and diamorphine and MDMA/MDA).
b. In these circumstances, restoration may be considered where requested, on payment of a sum equal to 20% of the current retail value of the vehicle, with a minimum payment of £100. If the vehicle has been adapted to conceal prohibited or restricted goods (s.88 CEMA), the restoration payment should be increased by the cost taken to remove the adaptation.
c. For drug quantities in excess of those stated restoration should normally be refused. However, there may be exceptional circumstances where it is considered appropriate to offer restoration (e.g. where considerable assistance has been rendered in enabling further arrests etc.)"
We are satisfied that this is the policy that Officer Clark applied in reaching his decision not to restore the Trailer. The policy clearly relates to restoration of commercial vehicles used for smuggling drugs and is intended to be robust in order to tackle cross-border smuggling, and to intercept the supply of excise goods to the illicit market.
We have considered the matters taken into consideration by the Respondent:
Firstly, the quantity of prohibited goods (drugs with an estimated street value of £400,000) found in the Trailer was in an amount that required exceptional circumstances to be established before restoration could be considered, and that Officer Clark applied this policy.
Secondly, the Respondent gave Mr Bogdanoski numerous opportunities to provide further information. Emails were sent to Mr Bogdanoski on 20 June 2021, 12 July 2021, 29 July 2021, 15 September 2021, 23 September 2021, 1 October 2021, 6 October 2021, 8 October 2021 and 4 November 2021 (in relation to the review process).
On 20 June 2021, the NPSU requested further information in support of the restoration appeal, as follows:
"1. Are you an owner/driver of this business?
How many drivers do you employ?
A copy of your employment contract with the co-driver, which should include the terms and conditions of employment.
Copies of any employment references from the driver's previous employers.
Details of your interview with the driver before employing them.
Copies of any instructions or written procedures that you issue to drivers or other staff to prevent them from smuggling.
Details of how you obtained the contract to carry the goods.
The checks you made of the consignor.
The arrangements made to collect the goods from the consignor and load them onto your vehicle.
Details of any physical checks made of the load and the application of any seals.
The checks you made of the consignee.
The arrangements mad to deliver the goods to the consignee.
Details of any other measures you take to prevent your vehicles being used for smuggling."
Mr Bogdanoski failed to respond to the request for information and clarification, despite emailing the NPSU on 1 July 2021 to check up on the status of the case. The NPSU replied on 12 July 2021 stating that they were still waiting for the information requested. Mr Bogdanoski replied on 13 July 2021 and asked when his belongings would be returned to him. Within that email, he claimed not to have received the letter dated 20 June 2021, but this claim was not repeated at the hearing before us. A further email was sent by the NPSU on 29 July 2021, repeating the request for information. Mr Bogdanoski responded on 9 September 2021 and repeated the question about when he could collect the tractor unit, the Trailer and his personal belongings. On 23 September 2021, the NPSU informed Mr Bogdanoski that the case would be allocated for a decision to be made without the information requested in the letter dated 20 June 2021. The conclusion reached was that Mr Bogdanoski could not provide any answers to the questions.
On 1 October 2021, the case officer emailed Mr Bogdanoski and asked him a series of questions as part of the investigation. The questions were as follows:
"1. I understand you are claiming restoration of the tractor unit (registration: CA6823XT), but can you confirm whether you are also claiming restoration for the trailer (registration" CO2500EM)?
The trailer (...) is registered to LKV Ivica - how are you connected to this company (for example, is it your company/are you an employee/have you leased the vehicle from this company)?
If you have leased the trailer, please provide a copy of the lease agreement.
The unit (...) registration card also lists LKV Ivitsa [sic] as a legal person/entity who may use the vehicle - how are you connected to this company?
If you leased the unit, please provide a copy of the lease agreement.
Did you witness the trailer being laded?
Did you carry out any checks of the load after it had been loaded?
How did you get the contract to transport the goods for 4PX Express GmbH (the sender of the goods)?
What checks did you make on 4PX Express GmbH?
What is your relationship t Milos Igrovic?"
We accept that numerous opportunities were given to Mr Bogdanoski over and above the usual single opportunity given to provide information before a decision is taken.
Mr Ezike submitted that the failure to respond to the request for information was due to a language barrier. We have found, however, that at no stage prior to the decision being made did Mr Bogdanoski approach a legal adviser or translator to assist him in dealing with the correspondence that he was receiving from the Respondent, after the Trailer had been seized. We find that it would have been clear to Mr Bogdanoski that the correspondence being received from UK Border Force related to the Trailer that he was hoping would be returned to him. It would, therefore, have been prudent for him to seek assistance. The failure to provide information persisted for some time. We are satisfied that it is not the responsibility, or the function, of the Respondent to translate correspondence (in various different languages) that may be sent to any individual who has had their vehicle or goods seized in the United Kingdom. Mr Ezike further, and alternatively, submitted that Mr Bogdanoski had, in fact, provided answers to the questions being asked.
In his correspondence to the Respondent on 3 November 2021, Mr Bogdanoski was able to describe the difficulties faced by hauliers and drivers. He further referred to the issue of illegal migrants. We, therefore, find that there is considerable force in Officer Clark's position that Mr Bogdanoski could understand what was being required of him after the Trailer was seized. We further find that the only real information provided by Mr Bogdanoski was that the Trailer had been leased (providing a copy of the lease agreement) and that he owned the Appellant company.
Thirdly, prior to the request for further information, Mr Bogdanoski gave 'no comment' responses in interview regarding the transportation of the Goods. The interview was conducted under caution. Whilst Mr Ezike submitted that the 'no comment' responses in interview may have been as a result of legal advice given, we find that the failure to provide any information when requested facilitated the conclusion that the Appellant was culpable. Furthermore, it is unclear what happened to the legal representatives that are said to have advised Mr Bogdanoski to give a 'no comment' interview if his case is that he did not understand what was required of him by the Respondent. We find that it would have been prudent for Mr Bogdanoski to seek legal representation throughout his dealings with the Respondent if he was willing to provide useful assistance to the enquiries being made.
Fourthly, following the interception of the Trailer, Mr Bogdanoski did not give access to his phone and laptop. The reason he gave for not providing the PINs was that he had forgotten the PINs. This was, however, at odds with the alternative reason given, which was that the PINs were private. We do not accept that Mr Bogdanoski would not have been able to remember the PINs to his own devices relatively shortly after he had been intercepted. We further find that reference to the PINs being private would rightly have been viewed by the Respondent with suspicion.
Fifthly, despite referring to the various ways that the Appellant ensured the security of goods, such as witnessing the load, in his oral evidence, Mr Bogdanoski described having conducted superficial checks when the Goods were being loaded. Conflicting reasons were subsequently given for not carrying out a more detailed inspection. The first was that some companies did not permit inspection during loading. The second was that the COVID-pandemic meant that close inspection was not possible. The third was that the manner in which the Trailer had been loaded meant that there was insufficient room to carry out an inspection. Whilst we have been shown photographs of a similar trailer, we find these photographs are of marginal probative value to the Appellant's case. This is because the incontrovertible fact in this appeal is that the photographs are not from the day of the interception and do not relate to the actual Trailer in this appeal. We further find that conflicting reasons were given for the failure to carry out checks.
Sixthly, in respect of the Appellant's policy, it was accepted that the Appellant does not have a written code of conduct. Whilst this may not necessarily be fatal, we find that this was further aggravated by the fact that the documentation accompanying the load did not correspond with the actual load in circumstances where no proper checks had been carried out by Mr Bogdanoski. We further find that the code of conduct provided by Mr Bogdanoski at the start of the hearing was never provided to the Respondent and related to a completely separate entity (the freight forwarder). It is also noteworthy that the code of conduct was in English and German. It is unclear, therefore, how Mr Bogdanoski would have been able to read the code of conduct in the absence of a translated version, in light of the potential language barrier.
Lastly, while the consignor and the consignee turned out to be legitimate, the recipient of the Goods was based in Barnsley District. This was despite the fact that the delivery address, as set out on the CMR, was in Leicester. No explanation was given for this discrepancy by Mr Bogdanoski, whose position was that he was only concerned with the number of pallets referred to in the documentation (in relation to any further checks carried out). We accept that Officer Clark considered all of the relevant information concluded that the attempted smuggling operation could not have been achieved without the Appellant's direct, or indirect, involvement. Furthermore, we accept that he properly concluded that the Appellant failed to exercise reasonable care to ensure the legitimacy of the load.
Having considered all of the information, cumulatively, we are satisfied that the decision was reasonable.
Hardship and Proportionality
We are further satisfied that hardship was considered by the Respondent. In Lindsay , Lord Phillips MR said this:
"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 for 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 need to be taken into consideration..."
Lord Justice Judge added this:
"Given the extent of the damage caused to the public interest, it is my judgment, acceptable and proportionate, that subject to exceptional individual considerations, whatever they are worth, the Vehicles of those who smuggle for profit, even for a small profit, should be seized as a matter of policy."
On the issue of hardship, in UAB Barela & UAB Reisrida v HMRC [2014] UKFTT 547 (TC) , the tribunal considered the policy in relation to vehicles adapted for smuggling as follows:
"54. It is clear from the decision of the Court of Appeal in the Lindsay case (see the judgment of Lord Phillips MR at [63]) that a policy of refusing restoration of a vehicle used in "commercial" smuggling (provided that policy allows for due consideration to be given to cases of exceptional hardship) is compatible with the requirements of law. The Lindsay case does not deal with vehicles which are adapted for the purposes of concealing goods which are intended to be smuggled into the United Kingdom, but that is clearly a situation which, even more strongly, justifies a policy of refusing restoration: adapting a vehicle indicates a carefully planned smuggling operation with a likely intent to use the vehicle for that purpose on a recurrent basis, and the legitimate aim of protecting the revenue is fairly achieved by ensuring that the vehicle is never restored to its owner.
...
...That policy is to refuse, other than in exceptional cases, restoration of the adapted vehicle, whether or not the absent owner knew, or should have known, of the smuggling attempt. Therefore, even if it could be said that the review officer had reached an unreasonable conclusion as to the knowledge of the Appellants (and as we have said, we do not in any event consider that to be the case), that would not be a basis for impugning her decision to apply HMRC's policy and to refuse to restore the trailers."
Officer Clark concluded that neither the inconvenience, nor the expense, in this case was tantamount to exceptional hardship over and above that which one should expect. Hardship is, indeed, a natural consequence of a decision to seize a vehicle. Furthermore, no supporting evidence was provided by the Appellant on the issue of hardship. Although a forfeiture accompanied by a refusal of restoration has an adverse effect, we do not consider non-restoration to be a penal measure. Having considered all of the evidence, cumulatively, we are satisfied that hardship was considered.
In relation to proportionality, in OK Trans Ltd v UKBA [2010] UKFTT 223 (TC) , the tribunal referred to the decision of the European Court of Human Rights in AGOSI v United Kingdom (1986) 9 EHRR 1, which held, at [54], that:
"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 of the entirety of circumstances which should be taken into account". It has to be correct that a policy on restoration should draw the type of distinctions addressed in the Commissioners' policy. (...) Furthermore, it seems to us that part of its legitimate aims in the public interest, the State is able to impose by means of a restoration policy obligation of vigilance on drivers and hauliers, providing that the burdens imposed as a result are not excessive so as to enable the relationship of proportionality to remain between the means employed and the aim sought to be realised."
All current formulations of the proportionality test involve four elements taken from Lord Sumption's speech in Bank Mellat v Her Majesty's Treasury (No.2) [2014] AC 700 (' Bank Mellat '), at [20]:
" ... the question depends on an exacting analysis of the factual case advanced in defence of the measure, in order to determine: (i) whether its objective is sufficiently important to justify the limitation of a fundamental right; (ii) whether it is rationally connected to the objective; (iii) whether a less intrusive measure could have been used; and (iv) whether, having regard to these matters and to the severity of the consequences, a fair balance has been struck between the rights of the individual and the interests of the community. These four requirements are logically separate, but in practice they inevitably overlap because the same facts are likely to be relevant to more than one of them."
The third element is now usually qualified in the manner explained by Lord Neuberger in R (Bibi) v Secretary of State for the Home Department [2015] 1 WLR 5055 , at [85], for which Lord Reed's speech in Bank Mellat was cited:
"...it has been authoritatively said that the question it involves may be better framed as was 'the limitation of the protected right ... one that it was reasonable for the legislature to impose' to achieve the legitimate aim, bearing in mind any alternative methods of achieving that aim..."
The State is permitted to secure property in order to control the use of it in accordance with the general interest or securing the payment of taxes and other contributions or penalties, pursuant to Article 1 of Protocol 1 of the European Convention on Human Rights ('the Convention'). This is compliant with art. 6 of the Convention: Air Canada v United Kingdom (1995) 20 EHRR 150 , at [61] to [63].
Furthermore, on the question of Convention compliance, both the condemnation and restoration procedures are available to the owner of items when they are seized. If the owner wishes to challenge the condemnation of the items as forfeit, the Notice of Claim court hearing procedure is available. If he simply wishes to challenge the refusal to restore the items, the appeal tribunal hearing procedure is available. There is simply no question of an owner being deprived of his property without an opportunity to challenge, in a court, the legality of the decision to seize and to challenge, in a judicial tribunal, the legality of the decision refusing to restore them.
We are satisfied that Schedule 3 is Convention compliant. The remedy for any arguments that there was any unfairness in relation to the application of those statutory provisions is judicial review, and not an appeal before the FtT. The FtT has no inherent power to review decisions of the Respondent in these circumstances, or to provide a remedy in respect of any alleged procedural unfairness. In any event, we are satisfied that the Appellant was provided with Notice 12A, which set out what the Appellant needed to do.
Conclusions
Having considered all of the evidence, cumulatively, and having regard to our findings of fact and the relevant law, we are satisfied that the appeal must fail. We hold that:
(1) The Respondent correctly applied the Policy on the restoration of vehicles, but was not fettered by it.
(2) The decision was considered afresh, including the circumstances of the events of the date of seizure, to decide if any mitigating or exceptional circumstances existed.
(3) All representations and materials made available were considered.
(4) The conclusion reached was one which was open to the reviewing officer to reach.
(5) The Respondent considered that the Appellant failed to take reasonable steps to prevent smuggling, or to conduct reasonable checks.
For completeness, the investigations and conclusions reached by the NCA in relation to Mr Bogdanoski's involvement in the Goods is/was a criminal investigation, which carried the criminal standard of proof; that of proof beyond reasonable doubt. The standard of proof applied by the Respondent was the civil standard, namely the balance of probabilities.
We hold that the decision-maker did not take irrelevant matters into account, or place insufficient weight on relevant matters. We further hold that the decision not to restore the Trailer was not disproportionate, and was not a decision which no reasonable decision-maker could have reached. The Respondent, rightly, did not consider the legality of the seizure.
Accordingly, therefore, the appeal is dismissed.
Right to apply for permission to appeal
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.
NATSAI MANYARARA
TRIBUNAL JUDGE
Release date: 25 th APRIL 2024