Szymanski v The Director of Border Revenue [2019] UKUT 343 (TCC)

Szymanski v The Director of Border Revenue [2019] UKUT 343 (TCC), before the Upper Tribunal (Tax and Chancery Chamber), concerned an appeal by Mr Jacek Szymanski against the First-tier Tribunal’s dismissal of his challenge to Border Force’s refusal to restore a seized trailer unit. The appeal was dismissed.

Mr Szymanski, a sole trader operating as a haulier under the name Everpol and based in Poland, had approximately ten years’ experience driving to the UK. On 15 May 2016, Border Force officers at Dover examined his load, documented as five pallets of natural mattress filling in ten boxes, and discovered approximately 2,000 kilograms of unprocessed tobacco. The trailer and its contents were seized. The consignment note (“CMR”) stated the consignor as UAB Kilita and the consignee as Mario Deka, with a delivery address at Welton Way, Rochford. Mr Szymanski had collected the load from Frankfurt after being handed the CMR at the warehouse; the goods were already boxed, palletised and stretch-wrapped. The tractor unit was subsequently returned to Mr Szymanski, but Border Force refused to restore the trailer. On review, Border Force officer Mr Raymond Brenton upheld the refusal on 26 July 2016. The legality of the seizure was not challenged in the magistrates’ court, so the goods were deemed lawfully condemned as forfeited under paragraph 5 of Schedule 3 to the Customs and Excise Management Act 1979. Mr Szymanski appealed Mr Brenton’s review decision to the First-tier Tribunal.

The review decision and Border Force’s policy distinguished between operators and drivers who were responsible for or complicit in smuggling and those who were not. The policy (divided into sections A to C) provided for three possible outcomes: restoration, restoration for a fee, or non-restoration. Section A applied if the operator provided evidence satisfying Border Force that neither operator nor driver was responsible or complicit and that both had carried out basic reasonable checks to confirm the legitimacy of the load; in such cases the vehicle would normally be restored free. Section C, which applied here, covered cases where the operator failed to provide evidence satisfying Border Force that he was not responsible or complicit, and the revenue involved was at least £50,000 or there had been a second or subsequent seizure within twelve months; non-restoration was the usual outcome. Mr Brenton concluded, on the balance of probability, that Mr Szymanski was “complicit if not responsible” in the smuggling attempt. His reasons included: the checks Mr Szymanski had carried out (copies of Mr Deka’s Polish ID card and UK National Insurance number) did not evidence credibility checks on the consignee’s or consignor’s business; Mr Brenton queried Mr Szymanski’s account of how Mr Deka had contacted him; inquiries showed UAB Kilita was a Romanian-based company with one employee in a category described as “other activities” with no mention of Mario Deka; no evidence had been produced linking UAB Kilita or Mr Deka to the collection point; Mr Szymanski’s assertion that he was unaware of the load’s contents was “disingenuous” because he had told officers Mr Deka had told him the load was “snuff” (a tobacco-based product); it could not be accepted that Mr Szymanski would not be suspicious given the heavy weight and probable smell; and the account of delivery arrangements was not credible. Mr Brenton noted this was the second seizure within six months (the vehicle had been seized previously and restored for a fee of £770 after Border Force had found 2,400 cigarettes and 16.8 litres of vodka, and Mr Szymanski had been warned that any future smuggling might result in non-restoration). The revenue involved, if the tobacco had been processed, would have exceeded £490,000. Mr Brenton accepted that non-restoration would cause hardship but did not consider it exceptional.

Before the First-tier Tribunal both Mr Szymanski and Mr Brenton gave oral evidence. The FTT described Mr Szymanski as a straightforward witness who had very little recollection of what he had told Border Force officers at interview. The FTT made a number of findings, some in Mr Szymanski’s favour and some not. The FTT found Mr Szymanski had not worked for Mr Deka before May 2016 and that Mr Deka had made contact through another client of Mr Szymanski’s, rather than through marketing activities as earlier suggested. The FTT rejected Mr Szymanski’s explanation that he had not checked Mr Deka’s business activities because Mr Deka had said he was starting a new business; the FTT was not convinced that conversation took place, as it was the first time the account had been given. The FTT considered it was reasonable for Mr Brenton to expect Mr Szymanski to investigate either Mr Deka’s business or the supplier’s activities. The FTT accepted that Mr Szymanski knew nothing about UAB Kilita beyond what was shown on the CMR and did not search its activities, but accepted that there was some evidence allowing him to conclude that UAB Kilita had a presence at the Frankfurt business park where he collected the load. The FTT found that the weight of the load was not evidently unusual and that Mr Szymanski did not notice any unusual smell. It also accepted Mr Szymanski’s evidence that he did not tell officers that Mr Deka had told him the load was “snuff”; Border Force had withdrawn that suggestion. Accordingly, the FTT was satisfied that Mr Brenton had taken into account two matters he should not have: the weight and smell of the load, and the “snuff” statement.

The FTT noted that Article 8 of the CMR Convention required the carrier to check the accuracy of the statements on the consignment note as to the number of packages, their marks and numbers, the apparent condition of the goods and their packaging, and entitled the carrier to enter reservations. When Mr Szymanski arrived in Frankfurt the goods were already boxed, palletised and stretch-wrapped. The FTT recorded Mr Szymanski’s evidence that he had checked the accuracy of the statements and the apparent condition of the goods and had no reservations; he did not examine the load, believing he was not entitled to remove the stretch wrap or open the boxes. Regarding the delivery arrangements, the FTT found it difficult to establish the exact nature of these beyond the fact that Mr Deka had told Mr Szymanski the delivery address was difficult to find and had provided him with a telephone number to use to make contact one hour before arrival (a practice which the FTT accepted was not unusual in itself), although it was unclear from where the one hour was to be calculated. The delivery address on the CMR and order form were not complete. The FTT concluded that Mr Szymanski probably did expect to deliver to a farm and that at best he lacked any sensible curiosity about the delivery instructions and was unable to give a clear account of them. The FTT was not satisfied that Mr Szymanski had fully described the delivery arrangements. The FTT concluded it was not satisfied that Mr Brenton had been unreasonable in forming the view that the various and unclear accounts of the delivery arrangements did not stand scrutiny.

The FTT also considered an invoice dated the same date as the collection, which purported to show a sale of mattress stuffing between UAB Kilita and Mr Deka. The FTT noted it must have been unlikely that Mr Szymanski had seen it beforehand and did not consider it relevant to the review decision, which focussed on what Mr Szymanski should have done prior to accepting the order and collecting the load. The FTT also considered a statement from Mr Deka (which accompanied a letter from Mr Szymanski’s representative dated August 2016, after the initial review) in which Mr Deka said he was wrongly convinced of the legality of the transported goods, that he improperly informed Mr Szymanski on the legality, and that he misled the appellant by numerous assurances. The FTT did not see a signed copy and noted that Mr Deka did not give evidence. The FTT considered that, far from assisting Mr Szymanski, the statement possibly prejudiced his arguments; Mr Brenton had been justified in dismissing it when he reconsidered his review decision in September 2016.

The FTT then considered whether, if the two irrelevant factors (the weight and smell and the “snuff” statement) were ignored, the officer would inevitably have reached the same conclusion about complicity. The FTT concluded, having heard Mr Brenton’s evidence and read his decision letter, that he had other reasons for concluding Mr Szymanski was complicit: the failure to make adequate background checks and the differing accounts of delivery arrangements. The FTT was “certain [Mr Brenton] would have concluded the same way by reason of these factors alone”. The FTT concluded that Mr Szymanski had failed to show that Mr Brenton had been unreasonable in deciding that Mr Szymanski’s failure to enquire further into Mr Deka’s business activities or to question the delivery arrangements meant he turned a blind eye and was complicit in the smuggling. The FTT stated it took the statement from Mr Deka into account when considering whether Mr Brenton’s decision was reasonable. As to the earlier seizure, the FTT considered Mr Szymanski’s pragmatic reasons for not challenging it (paying the fee to get the vehicle back so he could complete the delivery), but held it was not unreasonable for Mr Brenton to apply the policy on the basis that the current seizure was the second seizure within a six-month period and noted that Mr Brenton also had in mind the amount and nature of the seized goods on the earlier occasion. The FTT accepted Mr Szymanski’s explanation of the circumstances of the first seizure (the goods were for private use) but considered it was not unreasonable for Mr Brenton to have regard to the fact of the seizure. The FTT did not find it unreasonable that Mr Brenton had concluded the circumstances (Mr Szymanski was sole breadwinner of a family of seven with one disabled child, had significant outgoings and no assets besides the tractor and trailer) did not amount to exceptional hardship, noting that Mr Szymanski had confirmed he did currently have a trailer and tractor. The FTT concluded that Mr Szymanski had failed to show the review decision was unreasonable and dismissed the appeal.

Mr Szymanski appealed on a number of grounds. First, he argued that the FTT had failed to determine the reasonableness of Border Force’s policy despite having been asked to do so. The Upper Tribunal held that, although there was no discrete section of the decision devoted to the reasonableness of the policy as a whole, the FTT had addressed each aspect of the challenge to the policy as it had been put: the failure to take sufficient account of blameworthiness in prior seizures, proportionality, lack of notice of required checks, and non-disclosure of the policy. The FTT had noted the policy was to be applied “firmly but not rigidly” to allow an exercise of discretion on a case-by-case basis. It explained how the policy distinguished between operators who were complicit or responsible and those who were not. It found it was not unreasonable for the officer to apply the policy on the basis that the case was a second seizure within six months despite Mr Szymanski’s pragmatic reasons for not challenging the earlier seizure. It was implicit that the FTT considered the policy not unreasonable insofar as it did not require assessing the blameworthiness of the appellant for the previous seizure. The policy did not prevent an officer from taking into account the nature of the prior seizure; Mr Brenton’s evidence showed he did so. The FTT discussed the contrast Mr Brenton drew between the first seizure (where refusal to restore would not be proportionate given the duty was £770) and this case (where the duty would have been over £490,000 if the tobacco had been processed). In evaluating Mr Brenton’s application of the policy, the FTT viewed the policy as one that could be reasonably adopted. There was no error of law in that conclusion. The appellant’s reliance on extracts from various cases was misconceived; he did not explain the legal propositions they stood for or how they applied on the facts of his appeal.

Secondly, the appellant argued that the FTT erred in law because its decision expected Mr Szymanski to carry out more checks than he was legally obliged to carry out under the CMR Convention. The appellant had referred the FTT to Articles 8 and 11 of that Convention; Article 11 stated that the carrier was under no duty to enquire into the accuracy or adequacy of the relevant documents. The Upper Tribunal held there was no error of law in the FTT’s treatment of this issue. The preamble to the CMR Convention recognised the desirability of standardising contractual conditions. In the different policy context of preventing smuggling, Border Force would not be unreasonable if they expected checks beyond those set out in a Convention whose purpose was wholly different. The appellant further argued that the FTT erred in not specifying exactly what checks the appellant was supposed to have carried out and that inadequate notice was given of the checks expected. The Upper Tribunal held there was nothing in this point. The question of what will constitute adequate checks for the purpose of establishing whether an operator acted reasonably depends on the particular facts. The checks which might reasonably have been carried out in the circumstances (verifying not just personal ID but the nature of the consignor’s business, or making checks on the supplier) were ones a haulier might reasonably have been expected to carry out without specific advance notice. The initial matters enquired about by Border Force after the seizure were both relevant and expressed at such a general level that it cannot have been surprising Border Force would want to know about them. There was a prior seizure which put Mr Szymanski on notice of the relevant risks. The FTT had accepted that Mr Szymanski knew there were risks that some loads might be other than described, particularly where the customer was not a large company. Mr Szymanski was conscious, as a result of the previous seizure, that a vehicle could be seized and might not be restored.

Thirdly, the appellant submitted that the FTT erred in failing to take account of relevant facts: it wrongly regarded the invoice as irrelevant when assessing reasonableness of checks, and it erred in not taking account of Mr Deka’s statement in the appellant’s favour. The Upper Tribunal held there was no merit in this argument. The invoice was not irrelevant because it post-dated the order but because it was dated with the same date that the appellant was picking up the load in Frankfurt; the FTT found it was unlikely Mr Szymanski had seen it beforehand. As regards Mr Deka’s statement, the FTT did take it into account and it was entirely clear why the statement, which referred to numerous assurances given to the appellant as to the legality of the transported goods, possibly prejudiced the appellant’s argument he was an innocent carrier: an innocent carrier would not need to be continually reassured that mattress filling was not an illegal import. The FTT’s reasoning was based on an assessment of the weight to be attributed to the statement given

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