Lindsay

Rosalind English

John Richard Lindsay v Customs and Excise Commissioners (November 1, 2001)

Court:
VADT (Rodney P Huggins (Ch), Michael Sharp)

ABSTRACT

The seizure of a car worth over ten thousand pounds as a penalty for smuggling goods whose value was three and a half thousand was disproportionate and unreasonable 

SUMMARY:

This was a taxpayer's appeal from a decision of the Customs and Excise Commissioners on 22 November 2000 not to restore his vehicle pursuant to s.152(b) Customs and Excise Management Act 1979. On 23 July 2000 the vehicle in which the appellant and his father were travelling was stopped at the UK Control Point of Coquelles in France. When searched the vehicle was found to contain 18,400 cigarettes, 10 kilos of hand rolling tobacco, 31.25 litres of beer and 3.4 litres of spirits. The excise goods and the vehicle were then seized by the commissioners because the level of excise goods was above guidance levels and the appellant had received payment from members of his family for some of them. The commissioners declined to offer the vehicle for restoration and the appellant requested a reconsideration of this decision. The review officer confirmed that the excise goods had been properly seized as having been brought into the UK pursuant to a commercial transaction and that there was no good reason for disapplying the commissioners policy, which had taken effect from 14 July 2000, of not restoring a privately-owned vehicle used for the improper importation of excise goods.

On appeal the appellant's principle contentions were: (i) that the forfeited goods were intended for his and his immediate family's use and there was no commercial element; (ii) that the seizure of the vehicle was in breach of the Human Rights Act 1998 as seizure of property was a criminal sanction imposed for a non-criminal action and disproportionate to the matter complained of; and (iii) that the actions of the UK Government in stopping British citizens coming into the UK from other European Union countries and seizing their motor vehicles was in breach of the single market.

Held:

Appeal allowed, for the following reasons:

(1) Nearly half of the goods purchased were not for the appellant's own use as the arrangement he had with other members of his family made the transaction commercial because they were benefiting financially from the excise goods being cheaper than in the UK.
(2) Given that the value of the appellant's vehicle at the time of seizure was at least £10,500 and the excise duty of the seized goods was about £3,500, the values were disproportionate and this fact should have been taken into account by the reviewing officer. The commissioners' policy did not achieve a fair balance since it excluded the review officer from taking account of the value of the vehicle and accordingly from giving any real consideration to proportionality. The policy employed therefore went beyond that considered in the decisions of Jason Thomas Bowd v Customs & Excise Commissioners (1995) V&DR 212 and Dereczenik v Customs & Excise Commissioners17/8/2001 and was unreasonable as it restrained a discretion conferred by statute. For this reason the review officer's decision had not been reasonably arrived at and the appellant had suffered undue hardship by not having his vehicle and continuing to pay hire-purchase instalments.

By failing to take account of the value of a seized vehicle in deciding whether to restore it to its owner, the Customs and Excise Commissioners had failed to address the issue of proportionality which was a fundamental concept of European Law.

COMMENT (November 23 2001)

Proportionality was a concept that was imported into domestic law not by the Human Rights Act but the European Communities Act in 1972, as a "general principle" of European Community law as developed by the European Court of Justice and as such a test to be applied in English courts whenever a point of EC law arose - see for example the "Sunday Trading" cases, notably C-145/88, Torfaen Borough Council v. B & Q plc (Sunday Trading) [1989] ECR 3851.

So familiar is the test of proportionality now that it is hard to understand, with the benefit of hindsight, why there was so much fuss about introducing it as a yardstick which judges were permitted to use to assess the legitimacy of state action. Despite the volumes of academic commentary that have grown up around the subject, we can do worse than to go back to Lord Diplock's concise exposition of the idea in R v Goldstein [1983] 1 WLR 151 - that it simply means not using a steam hammer to crack a nut (at 157). And this case is a perfect example of the operation of proportionality at its most basic level. You have to ask three questions:

(1) Is the measure suitable for the purpose for which the power has been conferred? The answer in this case is probably yes; the enforcement of customs regulations needs to be implemented in a way that is direct and immediate, and the confiscation of vehicles in which goods are smuggled is an effective deterrence.
(2) Is it necessary - in the sense that the purpose could not have been achieved by any other means? Again, the answer must be yes because of the immediacy of the deterrence effect that could not be achieved, for example, by the lengthier and probably more expensive process of obtaining a court order for an attachment of earnings.
(3) Is the measure proportional in the strict sense, in other words are the burdens which are imposed by the exercise of power proportionate to the importance of the purpose it achieves? In this case - the seizure of a car worth over three times as much as the contraband goods - the measure is clearly disproportionate.

The problem with applying the proportionality test in a case such as this is evident from the result. If you have a quasi criminal regime, imposing penalties for breach of the law, then the proportionality of the punishment should be judged by a slightly different yardstick than the one adopted here. What this case seems to suggest is that the more expensive the car, the less likely the owner is to be deprived lawfully of his vehicle.

Rosalind English, 1 Crown Office Row

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