Philip T Wharam and Jane E Wharam v Her Majesty's Revenue & Customs, E 01080

JurisdictionUK Non-devolved
JudgeRodney HUGGINS
Judgment Date10 January 2008
RespondentHer Majesty's Revenue & Customs
AppellantPhilip T Wharam and Jane E Wharam
ReferenceE 01080
CourtFirst-tier Tribunal (Tax Chamber)


E01080






PROCEDURE application to allow appeal on the ground that there would be an abuse of the Tribunals process if the appeal proceeded; whether Tribunal has power to allow appeal; whether substantial delay and collapse of criminal trial sufficient to warrant appeal being allowed No VAT Tribunal Rules 19(3) and (4) ECHR Art.6.1. Human Rights Act 1998, s.3.



LONDON TRIBUNAL CENTRE




PHILIP T WHARAM and

JANE E WHARAM


Appellants


and



THE COMMISSIONERS FOR HER MAJESTYS

REVENUE AND CUSTOMS

Respondents




Tribunal: Rodney P Huggins (Chairman)

Catherine Farquharson BscACA



Sitting in public in London on 13 December 2007


Dr David Southern, Counsel, instructed by Hepburns, for the Appellant


John OFlaherty, Counsel, for the Respondents.




 CROWN COPYRIGHT 2007





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DECISION


The application


1. By a letter dated 2 May 2007 the Appellants through their Solicitors, Hepburns, made application that their appeals be allowed with the Respondents paying their costs.


2. The appeals were against assessments on Philip T Wharam (Mr Wharam) in the sum of £31,977,943 and Jane E Wharam (Mrs Wharam) of £5,649,396.


3. Before the hearing, the only documents which had been served in the proceedings were Notices of Appeal with Grounds and the Respondents Statement of Case.


Background and procedural history


4. What follows is drawn from paragraph 3 of the Appellants Skeleton Argument dated 7 September 2007 and the Respondents Statement of Case. The facts as set out below are not in dispute.


5. The Appellants were directors of four companies which imported numerous consignments of spirits between 1 January 1999 and 5 July 2000.


6. The Respondents (the Commissioners) allege that a total of 546 transactions were carried out at the instigation of either Mr or Mrs Wharam by which spirits were purchased from suppliers in France and the Netherlands, purportedly by one of the four companies on behalf of various customers most of which were in the United Kingdom.


7. The Commissioners further contended that these consignments intended for delivery to various bonded warehouses in the United Kingdom never reached their intended destinations. It was also maintained that in respect of some consignments there existed official Accompanying Administrative Documents which had falsified endorsements indicating receipt of goods by relevant warehouses which never occurred.


8. The Appellants have indicated in their grounds of appeal broadly that the factual assumptions of the Commissioners are mistaken.


9. Assessments were issued by the Commissioners on 5 February 2003 against the Appellants on the basis that they, as individuals, were the true importers of the relevant goods. Further, alternative assessments were issued against three companies through which the Appellants acted on the basis that the importers were indeed those companies.







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10. The Commissioners have submitted in their Statement of Case that the assessments were issued within the time limits provided by section 12(5) of the Finance Act, 1994, asserting that they arose from the fraudulent nature of the importations. The Commissioners also stated that they did not process all the facts necessary for the determination of the assessments until about February 2002 when documents and other evidence received from inquiries in France had been translated.


11. In a letter dated 29 April 2003, the Appellants sought a formal review of the assessments. By a letter dated 13 June 2003, those assessments were upheld. The Appellants appealed on 11 July 2003. The grounds of appeal can be summarised as follows :


(i) The Commissioners cannot lift the corporate veil in order to fix the Appellants with personal liability;

(ii) Mrs Wharam had no involvement in this matter;

(iii) There is no basis for the assessments in the Finance Act 1994;

(iv) The assessments are out of time;

(v) The factual assumptions of the Commissioners are mistaken;

(vi) The appropriate Regulations must be interpreted in a

proportionate manner such that joint and several liability cannot

be imposed.


12. On 11 May 2004 the Commissioners delivered their Statement of

Case.


13. In the meantime in 2000 both Mr and Mrs Wharam were arrested and charged with excise duty fraud but these proceedings were discontinued in February 2001.


14. In June 2004, the Commissioners revived the criminal proceedings and at the same time applied to the tribunal to stand over the two appeals for a period of six months or sixty days after the release of the judgments in the criminal proceedings against the Appellants. This was granted by the tribunal. Further applications along similar lines were directed by the tribunal on 19 August 2004 and 8 October 2004.


15. On 1 September 2004, the Appellants and five other defendants were indicted in criminal proceedings.


16. Eventually on 4 December 2006 Her Honour Circuit Judge Faber as a result of Applications on behalf of the Appellants and other Defendants to stay the criminal proceedings gave her ruling accordingly and summarised as follows :


I have decided to stay the prosecution because on the facts of this case it

will not be possible to hold a fair trial of these Defendants. I have







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formed the view that there is likely to be missing evidence that

undermines the Crowns case and would be of significant assistance to

the Defendants. That missing evidence relates not just to a few

witnesses and to some documentation but to the reliability of all the

witnesses and the documentation from the foreign distilleries and from

the domestic bonds. Whether the evidence of such witnesses and

documentation is excluded from the trial or included under a direction

that it may well be unreliable, cannot cure the unfairness of holding a

trial in the knowledge that there is likely to be other material of such

great significance which cannot be presented to the jury. The reasons for

this conclusion are fully explained below. Here I state only that it does

not flow from a finding of bad faith. It has been unnecessary for me...

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