The four appellants, Ian Leslie White (“White”), James Dennard (“Dennard”), Craig Russell Perry (“Perry”) and John Thomas Rowbotham (“Rowbotham”) appeal confiscation orders made against them. The four cases, not otherwise linked, involve the smuggling of tobacco into this country for resale and have been listed together because they raise similar issues. The resolution of these issues will determine these cases and hopefully will assist in the disposal of a number of other cases.

Before looking at the individual cases it will be helpful, we believe, to summarise a few of the general principles which apply in confiscation proceedings of the kind with which these appeals are concerned.

Under both the Criminal Justice Act 1988 and its successor the Proceeds of Crime Act 2002 if a person obtains a pecuniary advantage as a result of or in connection with an offence (the 1988 Act) or with conduct (the 2002 Act), he is treated, for confiscation purposes, as having received a sum of money equal to the pecuniary advantage (see section 71(5) of the 1988 Act and section 76 (5) of the 2002 Act). Thus his benefit will be deemed to include a sum of money equal to the pecuniary advantage.

However, the evasion by a smuggler of duty or VAT constitutes, for the purposes of confiscation proceedings, the obtaining of a pecuniary advantage only if he personally owes that duty or VAT. This was established by the House of Lords in May [2008] UKHL 28; [2008] 1 AC 1028; [2009] 1 Cr App R (S) 31 and Jennings [2008] UKHL 29; [2008] 1 AC 1046; [2008] 2 Cr App R 29 and applied in Chambers [2008] EWCA 2467 and Mitchell [2009] EWCA Crim 214.

In May the House of Lords said in paragraph 48 that a defendant “ordinarily obtains a pecuniary advantage if (among other things) he evades a liability to which he is personally subject” (underlining added). The House pointed out that more than one person could be personally liable.

In Jennings the House of Lords overruled the Court of Appeal (Laws, Longmore and Lloyd LJJ) [2005] EWCA Civ 746, [2006] 1 WLR 182, [2005] 4 All ER 391which had held, in an advance fee fraud case, that all that is required is that the defendant's acts should have contributed, to a non-trivial extent, to the getting of the property. Laws LJ had said:

The House disapproved of this approach, saying:

The relevant Regulations will determine whether a defendant personally owes duty or VAT, subject to the compatibility of those Regulations with the primary domestic legislation and the relevant EC Directive. However before the law was clarified by the House of Lords in May and Jennings, the Regulations were generally unimportant in confiscation hearings since whether the defendant personally owed the duty or VAT did not matter because he would normally have contributed to the evasion of the duty or VAT by another.

In May the House of Lords also said in paragraph 48:

A person obtains a pecuniary advantage by evading duty or VAT even though the smuggled goods were seized before they could be sold on: see Smith [2001] UKHL 68; [2002] 1 WLR 54; [2002] 1 Cr App R 35. In that case the House of Lords answered the following certified question in the affirmative:

It was confirmed by the House of Lords in May that, if several defendants were jointly responsible for a fraud, and the property thus obtained was jointly held by them, each benefited in the amount jointly held and there was no requirement to apportion that amount between them. Thus if two or more defendants have evaded the liability to pay £x in duty, the sum of money which each defendant is treated as having received as benefit is £x. This is subject to a possible exception described in this way by the House of Lords in May:

We turn to Chambers. The appellant had pleaded guilty to an offence under section 170(1)(b) of the Customs and Excise Management Act 1979 of being on September 13 2006 knowingly concerned in carrying, harbouring, depositing, keeping, concealing, removing or in any manner dealing with goods, which were chargeable with a duty which had not been paid, with intent to defraud the Crown of the duty chargeable on the goods. He was made the subject of a confiscation order in the sum of £66,120 under the Proceeds of Crime Act 2002, that sum being the value of the duty evaded.

At the confiscation hearing the prosecution relied on the decision in the Court of Appeal in Jennings. By the time the appeal came to be heard the House of Lords had allowed the appeal (see para. 6 above) and the respondent accepted that it was necessary to show that Chambers was personally liable to pay the duty. Thus the Regulations became relevant. To show that he was so liable, the respondent relied on the Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992, 1992/3135 (“the 1992 Regulations”) not knowing that they had been superseded (so far as tobacco products were concerned) on 1 June 2001 by the Tobacco Products Regulations 2001, 2001/1712 (“the 2001 Regulations”). See Regulation 28 of the 2001 Regulations the effect of which is to amend the 1992 Regulations so as to provide that, with exceptions, Part II and Part III of the 1992 Regulations do not apply to tobacco products from 1 June 2001.

The Court of Appeal prepared a draft judgment dismissing the appeal applying the 1992 Regulations. Toulson LJ giving the judgment of the Court described what happened thereafter:

Toulson LJ continued:

Subsequently three appellants had their confiscation orders quashed following concessions by the respondent: Khan and others [2009] EWCA Crim 588.

The Revenue and Customs Prosecutions Office (“RCPO”) has carried out a Review to identify cases in which the wrong Regulations had been raised by the prosecution or relied upon by the judge or cases in which the decision of the Court of Appeal in Rowbotham (John) [2006] EWCA Crim 747 had been raised by the prosecution or relied upon by the judge. In Rowbotham the Court of Appeal, presided over by Rose LJ, Vice-President, had dismissed an appeal relying in part on the 1992 Regulations which, unknown to all concerned, did not apply having been superseded by the 2001 Regulations. That Review has led to a number of applications for leave to appeal which are pending.

Dennard, one of the appellants in this appeal, and Chambers were co-defendants and Dennard, like Chambers, was also made the subject of a confiscation order under the Proceeds of Crime Act 2002 in the same amount. Unfortunately for Dennard, he had abandoned his application for leave to appeal the confiscation order shortly before the hearing.

His subsequent application to treat the abandonment as a nullity was granted. His appeal was joined to that of White, Perry and later Rowbotham, the appellant in the 2006 unsuccessful appeal whose case has been referred to this Court by the Criminal Cases Review Commission (the “CCRC”).

We shall return in more detail to the appeals of Perry and Rowbotham. It is sufficient to say at this stage that the respondent did not oppose the appeals. We allowed the appeals and quashed the confiscation orders.

It follows that the substantive hearing which lasted two days was concerned only with the cases of White and Dennard.

At a directions hearing on 7 July 2009 we made orders the effect of which were to invite submissions as to the personal liability of Dennard under the 2001 Regulations to pay the evaded excise duty and the compatibility of the Regulations with the relevant EC Directive and with section 1(4) of the Finance Act 1992.

In the case of White the conspiracy of which he was convicted spanned the period 1 January 2001 to 19 March 2002. During that time numerous consignments of hand rolling tobacco (“HRT”) were smuggled into this country from Luxembourg. For convenience the smuggling operations were divided into three phases, to the first two of which the 1992 Regulations applied and to the third of which the 2001 Regulations applied. At the directions hearing we therefore invited submissions as to the liability of White under the 1992 and 2001 Regulations to pay the evaded excise duty and the compatibility of the two sets of Regulations with the relevant EC Directive and with section 1(4) of the Finance Act 1992.

In the case of White only, his confiscation order included an amount to reflect the VAT avoided. Thus we invited submissions as to his liability in domestic and EC law to pay VAT.

The Court made these orders so as to be in a better position than the Court was in Chambers to resolve the complex questions raised in confiscation hearings where the benefit is said to be the duty or VAT evaded on smuggled tobacco products.

At the conclusion of the hearing we asked for written submissions about a driver’s liability for excise duty, where a driver is no more than a courier paid to transport the load. We subsequently received the last of those submissions in January. We made that request because if drivers in this category are personally liable under the Regulations to pay duty and thus would obtain a pecuniary advantage, there is an apparent conflict between the two passages in paragraph 48 of May:

The appellant pleaded guilty to a single count under s.170(1)(b) of the Customs and Excise Management Act 1979 charging him with being knowingly concerned in carrying, harbouring, depositing, concealing, removing or in any manner dealing with 600kg of tobacco, chargeable with a duty which had not been paid, with intent to defraud Her Majesty of the duty chargeable.

He had originally been charged with an offence under section 170(2) of being knowingly concerned in the fraudulent evasion of duty. The indictment was amended at the request of the prosecution to allege the offence under section 170(1)(b). Dennard, like Chambers, was ordered to pay a confiscation order in the sum of £66,120 under the Proceeds of Crime Act 2002 with the sum to be paid in six months and in default 1 year and 8 months’ imprisonment. That sum represented the value of the duty evaded. He appeals against that order. The original ground of appeal related only to the issue of apportionment, a ground which could not survive the decision of the House of Lords in May.

In discussing the Chambers case above, we have pointed out that the Regulations only became relevant after the House of Lords had overruled the Court of Appeal in Jennings (see para. 6 above).

In the words of the summary of facts prepared by the respondent:

Observations on 12^th September 2006 - At around 1220 he was observed in Tesco’s car park in Cheriton (near Folkestone) together with others and a Toyota L840 AKR. A Mondeo P785 TDF was in the same car park. The two cars left in convoy at 1231. At 1345 the Mondeo crossed by ferry from Dover to Calais and returned Calais to Dover at 1820;

Forensic evidence showed that Dennard’s mobile phone had been used in France and Belgium during the afternoon of 12^th September, first “roaming” call at 1534, last “roaming” at 1840. During this time there were calls to “Dad” suggesting that it was Dennard who was using the phone.

On 13^th September 2006:

At around 0615 a white van driven by Parsons left Nickolls Yard in Hythe and was driven to a row of lock-up garages in Deal. At 0650 Parsons was arrested and a large quantity of tobacco was found and seized. Amongst the tobacco seized were two sales receipts showing its purchase in Belgium at 1744 on 12^th September.

At 1129 officers entered Nickolls Yard and found Dennard in the driver’s seat of the Toyota L840 AKR.

In the passenger footwell were the keys for the yard and for a locked 20’ container which contained 24 boxes (600kgs) of Golden Virginia tobacco which had been smuggled into the UK without payment of duty.

The number printed on the side of the boxes (83102200125) matched the number on the boxes found with Parsons in Deal.

Also in the car (in the glove compartment) was £9,000 in cash.

Dennard was arrested and interviewed but made no comment.

The excise duty evaded on the 600kgs of tobacco was £66,120.

A fingerprint from Dennard’s father was found on a fork-lift truck at Nickolls Yard.

The purchase price abroad of the 600kgs of tobacco was £24,000.

To this summary Mr Corrigan, counsel for Dennard, responded in writing:

The appellant absconded before trial and was convicted and sentenced in his absence.

On 19 September 2003 he was convicted of a conspiracy to cheat the Revenue contrary to section 1 of the Criminal Law Act 1977, by fraudulently evading the payment of excise duty and value added tax on smuggled hand rolling tobacco. Two other defendants were convicted, Robin Marshall and Tony Weston. Confiscation orders were made against them respectively in the sums of £30,000 and £43,000.

On 12 December it was decided that the amount of White’s benefit was, as recorded in the court order, £6,151,841. That figure was made up in accordance with the Prosecutor’s statement as follows: £4,927,025.70 of duty evaded and £1,224,815.40 of VAT evaded. The benefit figure did not include an amount representing any sums received on the sale of the tobacco on the domestic market. No reference was made to the Regulations. There appears to have been no dispute about the amount of the benefit – nor could there have been as the law stood at the time. HHJ Neligan QC made no factual findings in assessing benefit in the case of the appellant.

On 11 March 2004 White was sentenced to six years’ imprisonment and a confiscation order was made against him in the sum of £6,151,841. He was ordered to pay that sum within three months, with 10 years’ imprisonment in default. The judge was not satisfied that the appellant’s realisable assets were less than that amount, an unsurprising conclusion given that the appellant had absented himself from the proceedings. The appellant was subsequently extradited back to this country on 20 September 2007 and is now serving his sentence. He appeals the confiscation order.

The parties provided the court with an agreed summary of the facts in White’s case which we set out as Annex A.

The Tobacco Products Duty Act 1979 provides in section 2(1) for the charging of “a duty of excise” on tobacco products imported into this country. Section 2(1) states that there “shall be charged on tobacco products imported into ... the United Kingdom a duty of excise ...”.

Section 1(1) of the Finance (No 2) Act 1992 provides:

Section 1(3) provides:

Section 1(4) provides that

The 1992 Regulations were made on 10^th December 1992, shortly after the Finance (No 2) Act received Royal Assent on 16^th July 1992. The two pieces of legislation were planned and carried through together, with a view to the commencement of the Single Market on 1^st January 1993.

The Regulations have been the subject of a number of amendments, which, we were told, are not relevant in these cases or the pending cases.

Regulation 4(1) provided, in so far as relevant to tobacco smuggling cases:

The goods are charged with duty at importation by virtue of section 2(1) of the Tobacco Products Act 1979 (see para. 37 above).

By virtue of section 5(2)(a) of the Customs and Excise Management Act 1979, the time of importation shall be deemed to be:

In Mitchell [2009] EWCA Crim 214 the Court said:

It should be noted, lest it be relevant in other cases, that there are special provisions relating to goods coming through the Channel Tunnel and special provisions for those who import tobacco for their own use and then sell or decide to sell the tobacco on the domestic market.

Section 1(1) of the same Act provides that “importer” “includes any owner or other person for the time being possessed of or beneficially interested in the goods”.

Regulation 5 of the 1992 Regulations provides in so far as relevant to tobacco smuggling cases:

Sub-paragraph 3(a) which refers to authorised warehousekeepers etc is only relevant to the extent to which it may help in the interpretation of the word “other” in sub-paragraph (b).

Regulation 5(9) defines the word “importer”:

By virtue of Regulation 6(1) in tobacco smuggling cases duty was to be paid on or before an excise duty point. Thus, in tobacco smuggling cases like the present ones, the duty became payable as the ship came within the limits of the port and those personally liable to pay the duty at that time were obtaining a pecuniary advantage by evading the payment and were deemed, for the purposes of ascertaining benefit, to have received a sum of money equal to the pecuniary advantage.

It is submitted on behalf of the appellants that sub-paragraph (3)(f) is ultra vires section 1(4) of the Finance (No 2) Act 1992. It is submitted that, by virtue of paragraph (3)(f) “any other person who causes or has caused the imported goods to reach an excise duty point” is made liable for the duty, whereas by virtue of section 1(4) of the Act such a person is not liable unless at the time the goods become chargeable with the duty, he has the necessary connection with the goods. In the words of the appellants:

The respondent does not accept the submission, arguing that, by virtue of Regulation 5(2) any person who causes or has caused the imported goods to reach an excise duty point is only liable if he retains a connection with the excise goods at the excise duty point. In the words of the respondent:

We accept the respondent’s argument that the regulation is to be interpreted in a manner which is consistent with the primary legislation and the argument that, interpreted in this way, the Regulation is not ultra vires. What is important to remember, when construing the 1992 Regulations, is that a person who causes or has caused the goods to reach the excise duty point is not liable to pay the duty unless he retains a connection with the goods at the excise duty point, which in tobacco smuggling cases involving sea ferries, is at the time the ship enters the limits of the port.

By virtue of Regulation 12(1) of the 2001 Regulations and in so far as relevant to tobacco smuggling cases “the excise duty point for tobacco products is the time when the tobacco products are charged with duty”. By virtue of Regulation 3 “duty” means (subject to an exception) “the duty of excise charged on tobacco products by section 2(1) of the Tobacco Products Act 1979”, set out in para. 37 above.

It follows that the excise duty point on imported tobacco products is the time of importation which, as we have already seen, will be at the point when the ship carrying the smuggled tobacco enters the limits of the port.

Regulation 13 determines who is liable to pay for the duty. Regulation 13(1) provides:

Mr Anderson QC, for the respondent, submits that “holding” means possession or control. Support for that interpretation can be found from the part of Regulation 12 dealing with tobacco products acquired by a person in another Member State for his own use and transported by him to the United Kingdom, albeit that this part of Regulation 12 was added by the Excise Goods, Beer and Tobacco Products (Amendment) Regulations, 2002/2692, Regulation 4(3) (December 1, 2002). In such a case the excise duty point is the time when those products are held or used for a commercial purpose by any person. Regulation 12 (1B) (e) provides that:

Regulation 13 continues:

Although Regulation 13 does not refer to persons “having the specified connection with the excise goods at the excise duty point” as Regulation 5 of the 1992 Regulations did, the respondent accepts that it must be interpreted in conformity with section 1(4) of the Finance (No 2) Act 1992 so that a person who has caused the tobacco products to reach an excise duty point is not liable for the duty unless he retained a connection with the goods at the excise duty point. Interpreted in this way, Regulation 13(e) is not ultra vires.

Regulation 14 provides, in so far as relevant to tobacco smuggling that the duty must be paid at or before the excise duty point.

The relevant Directive is Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (“the 1992 Directive”). It is a complex Directive dealing with many matters which are of no concern in this case, such as importation for personal use into a Member State of goods subject to excise duty on which the excise duty has been paid in another Member State and such as direct selling.

The 1992 Directive is repealed with effect from 1 April 2010 by Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty (“the 2008 Directive”) and repealing the 1992 Directive. Member States are required to adopt by 1 January 2010 the necessary provisions to comply from 1 April 2010 with the 2008 Directive. We were taken in some detail to the 2008 Directive as an aid to an understanding of the 1992 Directive but we have not found it necessary to refer to the 2008 Directive. There is also new domestic legislation intended to implement it, namely the Excise Goods (Holding, Movement and Duty Point) Regulations 2010 (SI 2010/593) which came into force on 1^st April 2010.

We were referred to a number of the matters in the Preamble of the 1992 Directive:

Article 1(1) provides

Article 6 (1) provides:

Article 6(2) provides:

The respondent puts particular stress on Article 6(2), submitting that the Directive does not harmonise fully the regime for the levying and collection of excise duties but leaves it to Member States. Therefore, so it is submitted, the relevant provisions of the 1992 Regulations and the 2001 Regulations in issue in this case do not have, by Community law, to be compatible with the Directive in so far as the Regulations provide who is liable to pay the duty. This submission is not accepted by the appellants.

We turn to the important Article 7, bearing in mind that the Article is not exclusively concerned with smuggling operations.

Article 7 provides:

There is no dispute that Article 7 does not, on the face of it, envisage joint and several liability or double recovery.

An understanding of Article 7(3), which sets out who is liable to pay excise duty, requires it to be read in conjunction with Article 7(1) and (2).

The effect of Article 7(1) is to provide that in the event of products subject to excise duty and already released for consumption in one Member State, A, being held for commercial purposes in another Member State, B, the excise duty shall be levied in the Member State in which those products are held (B). Article 7 therefore comes into play when excise goods are being held for commercial purposes in that second Member State, in this case, the United Kingdom. In a tobacco smuggling case, the excise goods are held for commercial purposes in the UK at the point of “importation” into the UK.

The effect of Article 7(2) is that where products already released for consumption in one Member State, A, are delivered, intended for delivery or used in another Member State, B, for the purposes of a trader carrying out an economic activity independently, excise duty shall become chargeable in that other Member State, B. It is not clear whether the words “for the purposes of a trader” attach to the words “delivered” and “intended for delivery”, but, we doubt that it matters and, in any event, in the light of Article 7(1) the products must physically be in the second Member State, B, for the duty to become chargeable.

Article 7(2) thus envisages excise duty becoming chargeable when the goods are delivered in B for commercial purposes, when they are being held in B with the intention of delivering them in B for commercial purposes in B and when they are used in B for commercial purposes in B by a trader. They would be used for commercial purposes in B by a trader if, for example, he sold the goods to someone in B intending to use them for his own consumption.

It may be that Article 7 would also come into play when a third Member State is involved, but we do not need to consider that.

Article 7(2) having prescribed when the duty is payable, Article 7(3) tells us who is liable for the duty.

On our reading of Article 7(3) in the light of Article 7(2), we believe that the duty is due from:

The appellants submit that the words “depending on all the circumstances” in Article 7(3) are important. In the words of the skeleton argument:

During the course of oral argument it was submitted on behalf of the appellants that only an owner was liable for the duty.

In our view and notwithstanding the reference to “depending on all the circumstances” and the absence of any reference to joint and several liability, the 1992 Directive clearly envisages that any person who fits within the listed categories is liable to pay the excise duty. Given that one of the aims of the Directive is the collection of excise duty, it is unlikely that it was envisaged that a Member State, in the words of the appellant, “must ... make a determination that a particular person is liable in the circumstances of the case”, even though, for example, the excise duty could not in fact be collected from him and even though another person or other persons would be liable. That is not to say that the Directive would permit recovery of more than the excise duty due – but we do not need to decide that issue in these appeals.

Nor do we accept the argument that, under the 1992 Directive, only owners of the goods are liable for the duty. Nothing in the language of the Directive suggests that only owners are liable. The respondent referred us to the judgment of the First Chamber in United Antwerp Maritime Agencies NV and another Belgium Case C-140/04, judgment given on 15 September 2005. That case concerned the collection of customs duties from a freight forwarding company from whose premises goods, upon which customs duties had not been paid, were stolen. The Court held that, under the relevant Community legislation, a person “who holds the goods after they have been unloaded in order to move or store them” is liable for the customs debt, that person being the person who has custody or possession of the goods.

Article 8 of the 1992 Directive provides:

Article 9(1) provides:

The balance of Article 9 deals with the criteria which Member States must apply when deciding whether excise goods are being held for commercial purposes.

It seems clear that Article 9 is dealing with cases in which a person has acquired or purported to acquire excise goods in one Member State for personal consumption and is now holding them for commercial purposes in another Member State. It does not help to resolve the issues in this case.

As we have seen (paras. 43, 56-57 above) the effect of both the 1992 and 2001 Regulations and the primary legislation is that the excise duty becomes chargeable at importation, namely, when the goods are brought by sea, the time when the ship carrying them comes within the limits of a port.

Article 6(1) of the Directive provides that excise duty shall become chargeable at the time of release for consumption, which, in the case of an irregular importation, is the time of importation (see Article 6(1)(c), para. 67 above).

It follows that domestic law and EU law are consistent in this respect.

Regulation 5(1) of the 1992 Regulations provides, as we have seen, that the person liable to pay the duty shall be the importer of the excise goods. The equivalent provision in the 2001 Regulations is Regulation 13(1) which provides that the person liable to pay the duty is the person holding the tobacco products at the excise duty point, which, in the case of smuggled tobacco, is the time of importation.

Regulation 5(3) also provides that the person liable to pay the duty shall also be any (other) person acting on behalf of the importer of the excise goods in respect of the importation of those goods and any consignee of the excise goods which have been imported into the United Kingdom. The effect of Regulation 5(3)(f) of the 1992 Regulations and Regulation 13(3)(e) of the 2001 Regulations is also to catch any other person who causes or has caused (1992 Regulations) or who caused (2001 Regulations) the imported goods to reach the point of importation (provided that he retains a connection with the goods at that time).

In so far as relevant to tobacco smuggling cases of the kind with which we are concerned, Article 7(3) of the 1992 Directive provides, as we have already seen, that, depending on all the circumstances, the duty shall be due from any of the following:

For the purposes of tobacco smuggling cases, the person who is referred to in Regulation 5(1) of the 1992 Regulations as the “importer” must come within category (b) above. There is therefore no incompatibility between Regulation 5(1) and the Directive.

In so far as Regulation 13(1) of the 2001 Regulations is concerned, the person holding the tobacco products at the excise duty point (i.e. the point of importation) must also come within (b) provided that the concept of “holding” in the Regulations is interpreted in the same way as it is to be interpreted in the Directive (about which there is no guidance in the Directive).

In so far as Regulation 5(3)(f) of the 1992 Regulations and Regulation 13(3)(e) of the 2001 Regulations make a person who causes/caused the goods to reach the point of importation liable for the duty (provided that he retained a connection with the goods at that point), there will be no incompatibility with Article 7(3) if he fits into any of the categories (a) to (d) at para. 93 above.

Regulation 5(3) of the 1992 Regulations, as we have seen, also made “(b) any other person acting on behalf of the importer of the excise goods in respect of the importation of those goods” liable to pay the duty. This would seem to catch someone acting as an agent of the importer. As an agent he may well also fall within (b) and he is likely to fit into one of the other categories listed in Article 7.

In so far as the 1992 Regulations make “(e) any consignee of the excise goods which have been imported into the United Kingdom” liable to pay the duty, there is unlikely to be any incompatibility with the Directive because such a person will fall within category (c) above.

It follows that there is unlikely to be any incompatibility between those made liable by the Regulations to pay the duty and those made liable by the Directive.

It is the submission of the respondent that

Thus the respondent submits that the 1992 Regulations and the 2001 Regulations can make a person liable for the excise duty albeit that he is not liable under the Directive.

This submission is disputed by the appellants.

Given our conclusion that there is unlikely to be any incompatibility between those made liable by the Regulations to pay the duty and those made liable by the Directive, it is not necessary for us to resolve the issue. It is sufficient to say that we see some force in the appellants’ submissions which are to the following effect:

If it is not possible for a Member State to add additional categories of persons liable to duty in addition to those identified under Article 7(3) of the Directive, then the respondent accepts the Regulations must be interpreted in accordance with Article 7(3) and if they cannot be so interpreted they fall to be disapplied by the national court.

In Mitchell, a post-Chambers decision, the prosecution appealed a refusal by a Recorder to make a confiscation order against the respondent, Mitchell. Mitchell pleaded guilty to being knowingly concerned in the fraudulent evasion of duty payable on the importation of tobacco contrary to section 170(2) of the Customs and Excise Management Act 1979. The offence came to light when a lorry was stopped by customs officers at Dover on 17th September 2004. The lorry had come from Belgium and was pulling a refrigerated trailer, containing what were supposed to be frozen chips but in fact consisted mainly of Golden Virginia Tobacco. There were a large number of boxes weighing a total of over 2,000 kilograms. The driver was arrested.

At the confiscation proceedings it was the prosecution’s case that Mitchell was an importer. The Recorder refused to accept that case, deciding that Mitchell’s role in the importation was no more than that of a person who helped to load the tobacco and then returned to the UK before the importation (although he also made a swift visit to Calais the day after the importation). The Recorder was not referred to the Regulations.

The Court of Appeal rejected the appellant prosecutor’s challenge to the findings of fact. However it was submitted on behalf of the prosecution for the first time during the appeal that Regulation 13(3)(e) of the 2001 Regulations applied and the respondent was a person who had caused the tobacco products to reach an excise duty point. Toulson LJ, giving the judgment of the court, pointed out:

Toulson LJ then, in the same paragraph, summarised the submissions of Mr Mitchell QC, counsel for the respondent:

Toulson LJ continued:

During the course of the hearing of the appeal the Court pointed out that the regulations were made in order to implement the 1992 Directive. In the words of the court:

In the present appeals, following what we said in the directions hearing, we have had the benefit of argument from counsel who specialise in European Community law.

It was submitted by the appellant prosecutor in Mitchell that, in the light of Article 7(1) of the Directive, the duty became payable at the point of entry into the United Kingdom. Toulson LJ summarised the arguments of counsel for the appellant in this way:

Toulson LJ continued:

The Court concluded that the respondent, Mitchell, did not have a personal liability to pay the duty and dismissed the appeal.

In the light of the acceptance in these appeals that a person who caused the tobacco products to reach the excise duty point (i.e. at the point of importation) is only liable if he retained a connection with the goods at the point of importation, it is likely, in many cases, that such a person would also have real and immediate responsibility for causing the product to reach that point. If a case arises where such a person did not have real and immediate responsibility for causing the product to reach the excise duty point, then the correctness or otherwise of the underlined obiter passage will have to be considered.

We start with the careful and detailed ruling on confiscation made by the Recorder. This (as the Recorder found) not being a criminal lifestyle case, he had to decide whether the defendants had benefited from the particular criminal conduct to which they had pleaded guilty.

Neither Chambers nor Dennard gave evidence at the confiscation hearing. The Recorder said in para. 6:

The Recorder examined a number of cases including Rowbotham. He pointed out that although the Crown had cited the 1992 Regulations, the Court had not based its decision on the Regulations but rather on the fact that the appellant had accepted in his basis of plea that he had been playing a part in the continuous process of keeping the cigarettes away from discovery and that this process involved the evasion of duty.

The Recorder concluded:

The Recorder answered the question posed in the last sentence in paragraph 35:

The underlined words were taken by the Recorder from paragraph 38 of the decision of the Court of Appeal in Jennings (see para. 6 above) which was not an excise duty case but an advance fee fraud case.

Unsurprisingly given the authorities as they stood when the Recorder gave his ruling, he did not ask the question that should have been asked: Did the defendants have a personal liability to pay the excise duty? Indeed no-one asked who was liable to pay the duty. Instead a passage from Jennings in the Court of Appeal concerning obtaining money in an advance fee fraud case was used to make a confiscation order in a case where the pecuniary advantage was obtained at importation. We make it clear that we imply no criticism at all of the Recorder or indeed of others.

The respondent invites us to apply the Regulations to the facts and conclude that the Recorder would have inevitably found that, on the balance of probabilities, Dennard was liable to pay the duty if he had been asked to resolve the correct question. Mr Bird in his skeleton argument submits:

Mr Bird relies on the fact that Dennard appears because of evidence of use of his mobile phone to have been in Belgium at the time of the purchase of the tobacco seized the next day from Parsons at Nickoll’s Yard. He also relies on the submission made by Dennard’s counsel as recorded in the ruling:

One problem faced by Mr Bird is that we do not know what evidence may have been given or led by Dennard had it been known that the prosecution had to show that Dennard was personally liable for the excise duty under the 2001 Regulations. A second problem is what the Recorder said in paragraph 6 (see above para. 117). A third problem is that the Recorder ascribed only a limited role to Chambers and Dennard:

Taking this into account and also Mr Corrigan’s submissions set out at paragraph 31 above about the Toyota, and the involvement of others we conclude that it cannot be said that the Recorder would have inevitably found that Dennard was holding the tobacco products at the point at which they were imported. Nor can it be said that he would have inevitably found that Dennard retained a connection with the goods at the excise duty point, which he would have had to even if he were to have found that Dennard caused the tobacco products to reach the point at which they were imported.

It is not necessary therefore for us to decide whether the prosecution had to show, in accordance with Mitchell, that Dennard had real and immediate responsibility for causing the product to reach that point.

For these reasons we set aside the confiscation order made against Dennard.

Mr Bird submits that the Court should substitute a lesser confiscation order using the discretion afforded to it under section 11(3) of the Criminal Appeal Act 1968 which provides:

Mr Bird submits:

Whilst the Recorder did find that Chambers and Dennard had “obtained” the tobacco, the effect of his ruling is that they may have done no more than “assisting in [the] removal” of such tobacco as might be present. If that was their role (and he treated them as having the same role), then the issue arises whether they were only “custodians or other very minor contributors to an offence, rewarded by a specific fee and having no interest in the property or the proceeds of sale”. If so, by virtue of May (para. 9 above), they would not obtain the property for the purposes of confiscation proceedings. In the light of the Recorder’s findings we do not substitute another order for the order made.

For the reasons which we have given we quash the confiscation order in the case of Dennard.

The respondent invites us to apply the Regulations to the facts and conclude that the judge, if he had been asked to resolve the correct question, would have inevitably found that, on the balance of probabilities, White was liable to pay the excise duty on all the consignments in the sum of £4,927,025.70.

The respondent submits that White comes within all the 1992 Regulations categories: as the importer of the goods, as the consignee and as a person who caused the goods to reach the excise duty point, namely the point of importation, and having the necessary connection with the goods at that time. In so far as the 2001 Regulations the respondent submits that the appellant was the person holding the tobacco products at the excise duty point, namely at the time of importation, and also a person who caused the tobacco products to reach that point.

In the words of Mr Evans for the respondent:

Mr Kovalevsky QC for White submits that Tilyard, who never stood trial, was the principal and that on the evidence it cannot be said that the judge would have inevitably found that White was a joint principal with Tilyard in the smuggling operation, jointly owning with Tilyard all the tobacco that was to be smuggled.

We agree with that submission. The judge would not have inevitably found that White was, with Tilyard, an importer.

Mr Kovalevsky submits that the judge would not have inevitably found that White was the consignee and/or “caused” the tobacco to reach a duty point, having the necessary connection with the goods at the time of importation. He was no more than “a rung higher in the conspiracy” (to use the judge’s words) than the co-defendants.

Mr Evans relies upon the following matters to show that White was liable for the excise duty (we have made a few minor changes to what Mr Evans wrote):

Mr Kovalevsky relies heavily on the statement of Emma Turner, employed as Customer Services co-ordinator at Lynx. The effect of her statement is that she had a number of phone calls with a man who must have been Tilyard. She wrote:

The witness also gave a description of the only person to pick up goods. Her description fits Robin Marshall.

It is submitted on behalf of the appellant that Tilyard was both the consignor and consignee. But there is nothing to suggest that Tilyard controlled the UK sales network. He needed a person or persons in England to buy the tobacco from him and sell it on. He needed to know the identity of that person before the goods arrived in England so that they could safely be dispatched to him. We have no doubt about that.

Having regard to all the matters set out by Mr Evans in his paragraphs 51 to 65, we have no doubt that the judge would have inevitably found that White was at the least a consignee at the time of importation of at least some of the tobacco. As such he would, in relation to that tobacco, come within at least one of the categories in the 1992 Regulations. In the case of the 2001 Regulations the judge would have inevitably found White to have been, at the least, a person who, as consignee, caused some of the tobacco to reach the excise duty point and as having a connection with the goods at that point sufficient for the purposes of satisfying the test in Mitchell.

Would the judge have inevitably found that White was the consignee of all the tobacco? He would be if the judge would have inevitably found that White was in charge of the UK operations.

The principal evidence that White was in charge of the UK operations is as follows:

It was White who was directing matters from the UK and issuing instructions and paying for the transport (Marshall); it was White who needed to be and was involved in any major decisions relating to the smuggling arrangements (Jungling); and most importantly it was White whose cash was being used to buy the tobacco (Dinnen).

Furthermore and importantly the heavier sentence passed on White makes it clear that the judge was accepting that White was in charge of the UK operations.

For these reasons we conclude that the judge would have inevitably found White to be the consignee of all the tobacco.

On the assumption that the respondent must be able to show in any particular case that the defendant is liable to pay excise duty only if the Directive, in addition to the Regulations, also makes him liable, we ask whether on the facts sets out by Mr Evans, White was liable under the Directive. We have no doubt that he was. He comes within at least one, and probably more, of the categories set out in paragraphs 79 and 92 above.

We have no doubt that the judge would have found White had obtained a pecuniary advantage in so far as the full amount of the excise duty is concerned and we uphold the challenged finding of benefit in so far as it relates to excise duty.

This aspect of the case concerns White only. The VAT component of the benefit figure was calculated by reference to the value of the acquisitions rather than by reference to the lost VAT on the supply into the domestic market. The VAT component was £1,224,815.40.

Section 10(1)(c) of the Value Added Tax 1994 provides for VAT (“acquisition VAT”) to be charged on any acquisition from another Member State of any goods where either “the person who makes the acquisition is a taxable person” or “the goods are subject to a duty of excise …”.

As to the second of these two categories, it is pointed out on behalf of the appellant that:

To this the respondent replies that White was, in any event, a “taxable person” under both domestic law and the Sixth Directive and that he made the acquisition. The Court, so the respondent submits, need not therefore concern itself with the second category.

In the words of the respondent:

The appellant accepts that:

The appellant submits that the judge would not have inevitably found White to be a principal and repeats the submissions made in relation to liability for excise duty.

In our view White was certainly a taxable person, albeit not registered.

The respondent submits that:

To succeed in the submission that the value of White’s benefit was £1,224,815.40, the respondent has to show that the judge would have inevitably found on the balance of probabilities that White was the acquirer of all the tobacco sent to this country by Tilyard and thus liable to pay all the acquisition VAT.

In the light of our conclusions in paragraph 148, we have no doubt that the judge would have so found. It follows that we have no doubt that the judge would have found White had obtained a pecuniary advantage in so far as the full amount of the VAT is concerned and we uphold the challenged finding of benefit in so far as it relates to the VAT.

For these reasons we dismiss White’s appeal.

On the hearing of the appeal we announced that the respondent did not oppose the appeal of Rowbotham against the confiscation order, that we would allow the appeal and that we would give our reasons later. We are grateful to Mr Bird and Mr Jackson for preparing an agreed note about the appeal much of which we have incorporated into this judgment.

On 9^th May 2005 at the Wolverhampton Crown Court (HHJ Onions) a confiscation order was made against the appellant in the sum of £249,252.

Rowbotham appealed against the order, but this was dismissed by the Court of Appeal, presided over by Rose LJ on 13^th March 2006, [2006] EWCA Crim 747.

In the course of his argument opposing the appeal, prosecuting counsel referred the Court to the 1992 Regulations rather than the 2001 Regulations and submitted that Rowbotham was a person included within the range of those liable to pay excise duty by reason of being a “person acting on behalf of an importer …in respect of the importation”.

The Court of Appeal did not in fact determine the appeal on the basis of whether or not Rowbotham was personally liable to pay the duty.

Having identified that the wrong Regulations had been cited, RCPO wrote to the appellant alerting him to the fact and advising that he could consider an application to the CCRC. The appellant made such an application and the CCRC referred the case to this Court on 3 June 2009.

In the light of the extensive review of the facts in the CCRC Statement of Reasons, the following summary will be brief.

Rowbotham was arrested on 15^th September 2003. At his premises (in two transit vans and a conservatory) were over two million cigarettes upon which excise duty had not been paid. The duty evaded was £305,171. He was interviewed and said that he had agreed to look after the cigarettes and expected to be paid £200 for doing so. He was charged and released on bail.

On 1^st October 2004, whilst on bail, he was arrested on the M6 motorway. He was driving a van which contained 420,000 cigarettes upon which duty of £63,000 had been evaded. He was also in possession of a large sum of cash. He was interviewed and said that he had been paid £80 to drive the van to Liverpool, but was unaware of its contents.

Both the 2003 and the 2004 offences were charged as offences of carrying or keeping goods upon which excise duty had not been paid, with intent to defraud Her Majesty of the duty payable, contrary to s.170(1)(b) of the Customs and Excise Management Act 1979. On 14^th October 2004 Rowbotham pleaded guilty in the Cannock Magistrates’ Court to the 2004 offence and was committed for sentence to the Crown Court. On 27^th October 2004 he entered a guilty plea on indictment to the 2003 offence.

He submitted a written basis of plea to the 2003 matter, the effect of which was that his role was solely to store the goods for another in expectation of a reward of £200, which was not paid. This was accepted by the Crown. On 17^th November 2004 he was sentenced to a total of 24 months’ imprisonment.

The confiscation order was made in the sum of £249,252. The benefit finding had been made at a hearing on 17^th January 2005 in the sum of £368,393.01. This was the sum of the duty evaded on the two consignments of cigarettes that had been found in his possession on 15^th September 2003 and 1^st October 2004.

No Regulations were cited to the Crown Court by either party. As the law then stood, the issue of who was liable as a matter of law to pay the duty was not determinative of any issue in confiscation proceedings.

The grounds of appeal dated 17^th July 2009 adopt the CCRC’s Statement of Reasons and submit (in summary) as follows:

In the words of the respondent:

The respondent accepts that the appellant derived no benefit by way of pecuniary advantage. Someone else (who was not apprehended) evaded the duty, probably when the goods were smuggled in. The respondent does not seek any substituted order.

On the hearing of the appeal we announced that the respondent did not oppose the appeal of Perry against the confiscation order, that we would allow the appeal and that we would give our reasons later. We are grateful to Mr Puzey for preparing a note about the appeal much of which we have incorporated into this judgment. We understand that the note was approved by Mr John Evans for the appellant.

The appellant appeals the confiscation order made under the provisions of the Proceeds of Crime Act 2002 by HHJ Onions sitting at Shrewsbury on 2^nd May 2008.

At 15.16 on Friday, 1st June 2007, Customs Officers entered an outbuilding in the courtyard of Vale View Farm, Green Lane, Ashley, near Market Drayton. Inside the outbuilding were a number of motor vehicles including a red Ford Escort van. The rear doors of the van were open, Perry was standing directly to the rear of the van and there were large boxes of cigarettes on the floor near where he was standing. Inside the van were further large boxes of cigarettes of the same type as those outside. After caution Perry said he was not prepared to answer any questions.

The red van contained 30,000 cigarettes of two brands and pouches of smoking tobacco. The other vehicles contained 72,200 cigarettes of the same two brands plus one other and there were 95,200 cigarettes of the same two brands on the floor at the rear of the red van. A further 60,060 cigarettes were found in a storage box inside the unit.

Perry was arrested and taken to Shrewsbury Police Station. In interview he answered no comment to all questions asked about the farm and the cigarettes. He conceded he lived at Beech House, Doctors Bank, Ashley.

Perry was charged with being knowingly concerned in dealing with tobacco products which were chargeable to duty where duty was not paid and with intent to defraud Her Majesty of the duty thereon under Section 170 of the Customs and Excise Management Act 1979. The duty said to be avoided was put at £46,388.95 in the prosecution papers.

Perry pleaded guilty at the first hearing in the Crown Court on 21st April 2008. He did so with a written basis of plea. This set out his role as the provider of storage for another for about 2 weeks and the transporter of 8 boxes of cigarettes to the unit. The judge sentenced Perry on this basis:

The confiscation order was made in the agreed sum of £47,465.17, which represented the duty evaded with an allowance for the effects of inflation. 18 months’ imprisonment was imposed in default of payment within 6 months.

In the words of the respondent:

As we said in paragraph 26, at the conclusion of the hearing we asked for written submissions about a driver’s liability for excise duty, where a driver is no more than a courier paid to transport the load into this country. We have received those submissions.

We have decided that we shall not resolve the issue given that it is both complex and does not arise in this case. We say only this. It tentatively seems to us that a lorry driver who knowingly transports smuggled tobacco will, for the purposes of the Regulations, have caused the tobacco to reach an excise duty point and will have the necessary connection with the goods at the excise duty point. We are concerned as to whether the driver falls within Article 7(3), assuming that is it is necessary for him to do so.

If he does so, it would remain a matter of domestic law whether he has obtained a benefit for the purposes of confiscation proceedings. We note, in this respect, that in paragraph 48 of May it was said that a defendant “ordinarily obtains a pecuniary advantage if (among other things) he evades a liability to which he is personally subject” (underlining added) and that: “Mere couriers or custodians or other very minor contributors to an offence, rewarded by a specific fee and having no interest in the property or the proceeds of sale, are unlikely to be found to have obtained that property.”

The appeals of Dennard, Rowbotham and Perry succeed. The appeal of White fails.

The span of the conspiracy was 1 ^st January 2001 to 19 ^th March 2002. During this period numerous consignments of hand rolling tobacco (“HRT”) were sent to England from Luxembourg concealed in:

boxes of carpet tiles,

empty computer towers, and

10 litre paint pots.

By his DCS (dated 31.12.02), IW accepted that he did not take issue with the contents of any witness statements provided by the Crown.

On 28 ^th February 2001, German Customs officers [Thiel sp190b] stopped a vehicle driven by a man called Uwe Schtschepik. Concealed in boxes of carpet tiles loaded in his vehicle was a total of 485kg of HRT. The driver had collected the load that morning from:

According to the documents that accompanied the load, the carpet tiles were to be delivered to a German haulage company called Danzas. Documentary records obtained from Danzas show that the goods were to be carried to the UK. The consignee was shown as either Premier Upholstery or Securicor Omega International. A total of 6 loads were despatched by Danzas for RNI. The last of the consignments was also intercepted by German Customs officers on 1 ^st March; it too contained tobacco hidden in boxes ostensibly containing carpet tiles. On this occasion, the Danzas driver was Dimitri Spielmann [sp 181b]; he had collected 3 earlier loads from RNI in Foetz.

The UK leg of the journey was sub-contracted to Securicor Omega in Rainham. Documents were provided to the Customs by Securicor [Reeves, sp13; xp106-120]. One such load was collected on 27.2.01 by a person giving the name John Jones from Premier Upholstery, Unit 1, Crown Farm Crescent, Nr Epping. No company by the name of Premier Upholstery has any connection with that address.

The name “Paul” and a mobile phone number 07960 535388 were given [7a] as contact details for the load. The load was collected in a van, registration number L497 MVW [7b]; this was a vehicle regularly used by Robin Marshall on cross-Channel trips ( see schedule ). It was Robin Marshall who collected this load.

Shortly after the second German seizure, a Danzas employee called Heiko Jungling [wsp177B xp322] was contacted on the phone by a man to whom he had previously spoken about the transport arrangements for the Danzas loads; this man only ever spoke to Jungling in English. The caller said he could be reached on telephone no. 00352 91469402. Jungling told the caller that goods had been seized by German Customs and gave him the telephone number of the relevant Customs Office.

The caller rang again on 6^th March and suggested they go for a meal together; he was adamant that they meet on 8^th March (two days later) because he said that on that day an Englishman would arrive by plane who wanted to take part in this discussion. The caller gave Jungling to understand that he would have cash with him in order to compensate him for the expense caused by “the trouble” with Customs. The caller offered Jungling £33,000 per month if he would continue to transport loads for him. He said he would be travelling to the meeting in a red Mercedes.

It was arranged that they would meet on 8^th March at the “Leinenhof” restaurant next to the Schweich exit from the motorway, between Trier and Wittlich. Jungling gave this location on the directions of German Customs who kept it under surveillance. It was the prosecution case that the caller was Tilyard.

At the appointed time, a red Mercedes Benz with British registration no. L824 RJN containing three men was seen in the car park of the Leinenhof restaurant [Feltz, sp187b]. According to P&O records, that vehicle travelled from Dover to Calais overnight on 7^th March and returned on 9^th March. The manifest recorded the names of the occupants as Robin Marshall, Ian White and Anthony Weston.

When interviewed, White admitted he was one of the three men in the red Benz (which he admitted was his car – see §44 below).

On 4^th April 2001, a man giving the name Paul Burnett telephoned German Customs claiming to have an interest in the seized loads and seeking the return of the tobacco. He was invited by the Officer, Karl Backhaus, for an interview. By prior arrangement, Mr Backhaus collected the caller from the railway station at Trier on 25^th April. He admitted to the officer that his name was not Paul Burnett, but Howard Tilyard; his passport confirmed that [jbp 17].

During the subsequent interview, Tilyard admitted that the seized loads were his. He said he concealed the tobacco under the carpet “to make it easier to import it into the UK illegally”. He said he deliberately misdescribed the goods because had he said it was tobacco:

He explained that he bought the tobacco from a wholesaler in Luxembourg called Mapine, a company occupying premises at 4 Rue de l’Avenir, next to the address purportedly used by RNI (see §5, above), and then re-packed it in boxes sent for that purpose from England by people whose names he would not reveal [exp126]:

On 27^th February 2001, the day before the first seizure by German officers, Robin Marshall (“RM”) was stopped at Dover Eastern Docks as he was leaving the country in a Volvo (F314 RAR) [exp40]. In his possession was £10,000 in cash, which he claimed was to buy a car (Footnote: ²) [Nowill sp192]. Robin Marshall was also stopped on his return to England; he said he had not had enough money to buy the car he wanted, so he had left the cash with his girlfriend in Belgium.

There were no further “carpet” loads after the stop on 1^st March 2001.

On 23^rd August 2001, Belgian Customs Officers [Michaux; sp33, Fontaine; sp38] stopped and searched a VW van that had travelled from Luxembourg. It contained three pallets loaded with boxes of what appeared to be computer parts. The officers thought the boxes looked rather old and the tape sealing them had not been properly applied. The load was examined; each box contained an empty computer tower which had been packed full with packets of tobacco; the total weight of the tobacco thus concealed was 810kg.

The van was driven by Karel Sollie, a manager of ASAP Express Courier. Sollie explained [wsp 46-9, 57-50] that the consignor was a Luxembourg based company called Luxor. This load was one of many, the first of which was sent in May 2001 [wsp46]. The pattern was always the same. On each occasion the pallets were collected by Sollie (or one of his drivers) from outside the premises of Ziegler at 166 Rue de Dippach, Bertrange, Luxembourg. (Footnote: ³) The pallets were unloaded from a Europcar van and handed over by a man who gave the name “Howard”, who said he represented Luxor Computer Logistics. “Howard” gave his address as Hotel Villa Romana, Foetz the same as Tilyard’s address. The first of the loads was collected by ASAP from that address.

ASAP were instructed to deliver the pallets to England. This was the return of the CPU for re-use in the smuggling enterprise. The English leg of the journey was subcontracted to a haulage firm called Lynx Express Ltd. Lynx vehicles were collecting pallets from the ASAP warehouse every day. Paperwork from ASAP and Lynx [Kennard; sp78] revealed a total of 88 previous transactions beginning on 1^st May 2001 [see schedule 9 - 17].

It transpired that another, apparently identical, load from Luxor was in transit at the time of the interception. Accordingly, on 24^th August, the day after the stop in Belgium, UK Customs Officers [Hamill, sp62, Thomas; sp 65] visited the Lynx warehouse at Dartford. On examination of the load that had just arrived, it was found to contain CPU cases stuffed with pouches of tobacco [see photos], a total of 675kg. The paperwork for the load identified the consignor as Luxor, at the same address as before.

A contact number had been provided to Lynx: 0035 221 384155. The area code is for Luxembourg. On the instructions of a Customs officer, Mr Morris of Lynx [wsp67] rang the number saying there was a problem with the load. The male voice at the other end said he was “Howard” [wsp69]. Mr Morris recognised the man’s voice; he had previously spoken to him on the telephone in connection with Luxor loads. Mr Morris told him that HMC&E had seized the load.

On 29^th August, the man called “Howard” telephoned Mr Morris to enquire whether there was any news on the seized goods. During the ensuing conversation, he admitted to Mr Morris that he knew the CPU cases contained tobacco - that, he said, was the business he was in. “Howard” then asked Mr Morris whether he was willing to “turn a blind eye” in respect of future loads - if so there would be “a drink” in it for him [wsp74].

The Luxor loads were collected from the depot at Dartford. It was always the same man who turned up; he was white, 5’9”-5’10”, slim build, hoop earrings, shaved head and covered in tattoos. The first time he said he had come to collect the goods for “Howard” [Turner; wsp82]. Another Lynx employee, Donald Williamson, also met this man. Mr Williamson [wsp83] wrote down the registration number of his vehicle - R926 YPV, (Footnote: ⁴) and the name he gave - Paul Jones [jbp 26]. That index number and van details match those of a van frequently used for cross channel trips by Robin Marshall and Nigel Marshall travelling 2 or 3 times per week (see schedule). The jury was invited to infer that the man who turned up at Lynx was Robin Marshall. Fingerprints matching his were discovered on wrapping from one of the seized CPU cases [Dawson; sp88 at 91].

Lynx received deliveries of what purported to be computer parts consigned to the following companies:

At about 7 o’clock on the evening of 24^th July 2001, Steven Dinnen was stopped outbound at Harwich by UK Customs [Farrow; sp17, Taylor; sp23] driving a green LDV hire van (R633 BWY) that was found to contain empty computer towers/cases. Under his seat was a carrier bag with £31,000 in cash inside.

At the time, Dinnen said he was taking computers to Brussels to be filled. When interviewed (between 20.06 and 20.35) that night [Mills; sp27], Dinnen said the computers and the money had been given him by Nigel Marshall; he was to take them to Luxembourg to an address he would be given (by phone) once he was there.

When Dinnen was arrested on 19^th March 2002, his home address was searched and a car hire agreement (dated 9^th August 2001) was found [85b] which indicated that he was employed by Universal Connections as a sales assistant. This was a business that had been sold by White to Weston.

The booking for Dinnen had been made using a debit card belonging to Rosemary White (White’s wife) at a cost of £231 [Sturgess sp 324; Newbiggin sp 321]. The address given when the ticket was booked was White’s previous address - 103 Lymington Road, Dagenham. In interview, White admitted he “probably did” pay for the ticket, suggesting that Dinnen told him “there was some kind of problem” because he, like the Marshals, had no debit card and had also got bad credit [IW ivp77].

On 30^th July, Robin Marshall attended the Customs office in Harwich seeking the return of the £31,000 that had been seized from Dinnen; it was eventually returned by Customs. On the instructions of the Marshalls [Coward; sp30], the money was paid into a Woolwich current account, no. 42555953 in the name of Nigel Marshall. Once the funds were cleared, they were promptly removed. (Footnote: ⁵)

On 12^th October 2001, Robin Marshall was again stopped by UK Customs at Outward Control. He had approximately £25,000 cash concealed under a spare tyre behind the passenger seat and £5,000 on his person [Pearcy; sp99]. He was arrested.

The van Dinnen was driving [R926 YPV] was seen outside the business premises shared by White and Weston (761 Becontree Avenue, Dagenham) on 3 occasions: 29^th August, 14^th September and 2^nd October (all 2001). A photograph taken inside the premises on 19^th March 2002 shows a cardboard box apparently identical to the Luxor boxes.

White’s billing records showed that after Dinnen’s interview with Customs on 27^th July 2001 (Footnote: ⁶) he was on the phone to him [22.25, 22.55 and 23.10]; after speaking to Dinnen, he called Tilyard [22.28] and co-defendants [Weston - 22.38; Robin Marshall– 22.47] – see White phone schedule.

On 20^th February 2002, a consignment of plastic 10 litre Crown paint tubs was intercepted by UK Customs at the Thames Europort, Dartford; on examination the tubs were found to be stuffed with tobacco [McLoughlin; sp108].

The load had been sent from Luxembourg by a transport company called Gefco UK Ltd, Dartford, Kent. The consignor was given as:

On arrival in England the loads were stored awaiting collection in the Gefco depot rather than being delivered; the pallets were marked “For Collection”. The Gefco warehouse in the Netherlands which sent the loads over was contacted by UK Customs. It was discovered that another consignment was ready to go; it was examined and it too contained tobacco, not paint.

The goods were in fact consigned by Tilyard. He attempted to recover his goods that were still in the Gefco depot in Holland. He said he needed the load back because the paint was sub-standard [J in ‘t Veld sp261].

In all, Gefco sent 39 identical consignments [Savory; sp106, xp274 to 285]. The first of these was despatched on 21^st November 2001. Starting with 2 pallets, the consignments increased to 6 per load.

The defendants were arrested on different dates in March 2002.

At Ian White’s home address, amongst papers found in his briefcase was one which had the address shown for CPP Refinery – Rue de Randlingen 18, 8366 Hagen [jbp 81] linked to Tilyard.

White was interviewed on 19 ^th March 2002.

He worked as a marketing manager for a mortgage brokers, MPS for the previous 6 months. Before that he owned two mobile phone shops: Universal Communications which he sold to Weston, and Gidea Park Communications which closed in August /September.

He had lived at 11 Priory Path, Romford for 2 years and 7 months; before that, he lived at 103 Lymington Rd, Dagenham, Essex.

He knew Robin and Nigel Marshall. He agreed that his mobile phone number was 07973 727791.

He knew Dinnen and was aware that Dinnen was stopped on 27 ^th July 2001 and that cash was seized from him, but not how much.

He knew Tilyard whom he would see about 5 times a year, usually abroad. White no longer had any business dealings with him.

He knew Weston to whom he sold the shop (Universal Communications)

He thought he may have paid for the Marshalls to travel to the Continent because neither of them had bank or credit cards, but did not do so on a regular basis, and had not done so for some months.

He probably did buy the ticket for SD’s travel and that was why Dinnen told him about him being stopped.

He, Tony Weston and Robin Marshall travelled to the Continent in his red Mercedes on 7 ^th March 2001. The purpose of the trip was the purchase SIM-free mobile phones. The deal involving the SIM-free mobile phones did not take place, so they all travelled from Ostend down to Luxembourg. Robin Marshall did the driving for most of the trip. They travelled down to the Villa Romana, where Tilyard was staying. From there, he, Weston and Tilyard travelled to the meeting in Germany, so that Tilyard could collect the money he owed IW. Robin Marshall stayed at the hotel to sleep.

The meeting was to take place in a pub car park. They went into the pub to see if the person was in there, but he wasn’t so they returned to the car and waited for him. They stayed there for about an hour and a half. When it appeared that the person they were due to meet was not going to show up, they left the pub and returned to the Villa Romana. From there they drove back to the UK.

He said he probably paid for the trip, with Tony Weston paying him back for his part of the ticket. Robin Marshall did not pay for his ticket as he was paid to act as the driver. He said he and Tony Weston have been to Luxembourg to see Tilyard on at least one more occasion; this would have been purely a social visit.

IW was asked about various items seized from his briefcase:

Smith 0001: a piece of paper with numbers and names on [jbp 83/84]. He claimed they referred to money lent to his brother-in-law, money for the re-decoration of his living room, furniture he bought and rent on a property left to his children by his uncle.

The bit of paper with letters and numbers written on [jbp 80], was a code he used to interpret numbers passed to him by Tilyard over the phone. Tilyard is difficult to understand over the phone and he changes his number frequently.

The Luxembourg address [jbp 81] was Tilyard’s most recent address. The German address [jbp 79] related to a safe manufacturing company. His safe had the handle snapped off and in order to get it fixed, he had to go back to the manufacturer in Germany.

Nigel Marshall, (Footnote: ⁷) in particular, gave evidence in the trial that incriminated White.

He said that he became involved in trips to Luxembourg through his brother, Robin. To begin with, he would just ‘go along for the ride’ but then he got a job from IW, starting immediately. The vans they used: R926 YPV and R648 TET, belonged to IW. All instructions came from IW, he also paid for all the trips. NM would go to IW’s house and collect cash for the trips (tickets, diesel, his wages).

Following the seizure by Customs of £31,000 from Dinnen on 24 ^th July 2001 (see §25 et seq above), NM was asked by White to go to Dover and reclaim the money. White offered him £100 if he would allow his account to be used to pay the money into. After that happened, NM withdrew the equivalent sum in cash and paid it over to White.

After the arrests, IW phoned NM and told him that he wasn’t to say he knew him. In interview, NM answered “no comment”; asked by the judge whether this was because he had a headache or because IW told him not to, NM said it was IW’s phone call.

The duty and VAT evaded during each phase of the fraud was as follows: