Practice and Procedure


PUBLISHED April 11, 2003

The VAT and Duties Tribunal was not concerned with the determination of a "criminal charge" for the purposes of Art.6 or Protocol 1 Art.1 European Convention on Human Rights when hearing appeals concerning restoration matters.Conjoined appeals arising from the determination of preliminary issues by the VAT and Duties Tribunal in appeals brought by Gora and Others and Mrs M Dannatt M Dannatt v Customs & Excise Commissioners (2002) against the Commissioners of Customs and Excise. Gora and Others were traders in alcoholic drinks whose goods had been detained because the Commissioners were not satisfied that duty had been correctly paid. Mrs Dannatt had allowed her car to be used by her husband for an improper importation of excise goods, and was required by the Commissioners to pay a sum equivalent to 25 per cent of the revenue evaded in order to have her car restored to her. The Commissioners' decisions and related policies were challenged in separate proceedings before the VAT and Duties Tribunal but, following the determination of similar preliminary issues in each case arising under the European Convention on Human Rights ('the Convention'), it fell to the Court of Appeal to determine: (i) whether the appeals to the tribunal involved the determination of a "criminal charge" or of "civil rights and obligations" within the meaning of those terms in Art.6 of the Convention ('the classification issue'); and (ii) whatever the outcome of the classification issue, and it being accepted that the tribunal was independent and impartial, whether the jurisdiction of the tribunal was sufficient to satisfy the requirements of Art.6 in the context of the right to peaceful enjoyment of possessions conferred by Article 1 of Protocol 1. A related question also arose for determination as to the meaning of the word "seized" in paragraph 2(1)(r) of Schedule 5 Finance Act 1994.HELD: (1) The procedure by way of an application to restore goods could not be described as a criminal charge and such a finding was strongly supported by authority. The facts in Gora were not materially different from Air Canada v United Kingdom (1995) 20 EHRR 150, and those in Dannatt not materially different from AGOSI v United Kingdom (1987) 9 EHRR 1. Further, as forfeiture proceedings and condemnation proceedings were held not to involve the determination of a criminal charge (see Goldsmith v Customs and Excise Commissioners (2001)] 1 WLR 1673 and R (on the application of Mudie) v Kent Magistrates Court and HM Customs and Excise (2003)] EWCA Civ 237 respectively), it was not possible to hold that subsequent proceedings by way of an application to restore condemned goods amounted to the determination of a criminal charge. No matter how blameless the owners or however severe the sanction, the function of the tribunal was not to determine criminal charges. (2) As it was possible to challenge a refusal to restore goods to the tribunal, and the tribunal was able to make findings of fact in determining whether the decision on restoration was reasonable, with the Commissioners conducting a further review thereafter in accordance with the findings of fact if necessary, the tribunal met the requirements of the Convention. (3) It remained a feature of the law that there was a distinction between detention and seizure (see HM Commissioners for Customs and Excise v Venn, Masser and Marquis Publications (2001) EHWC Admin 1055. Prior to being seized Gora's goods had been lawfully detained which was both legitimate and proportionate as a short terms measure pending release or seizure following enquiries. The right to appeal to the tribunal arose upon seizure or forfeiture; alternatively, judicial review would be available if the Commissioners failed to make enquiries and reach a decision promptly. It followed that the detention procedure did not give rise to a breach of Convention rights. (4) By way of further guidance, jurisdiction in relation to condemnation proceedings lay with the courts and the tribunal had no jurisdiction to reconsider the issue of forfeiture.Judgment accordingly.

[2003] EWCA Civ 525