Jonathan Swift QC and James Puzey (instructed by Solicitor, Revenue and Customs ) for the commissioners; Geraint Jones QC and Marc Glover (instructed by Rainer Hughes Solicitors ) for the claimant.
Large quantities of alcohol were detained and removed, “pending evidence of duty status” and “pending duty status”, from the claimant’s premises by customs officers, pursuant to section 139(1) of the Customs and Excise Management Act 1979. The claimant sought judicial review of the subsequent seizure notices issued. The judge gave three judgments. (1) In the first he held that the goods detained and still held were unlawfully detained since the purported exercise of the power to detain the goods was flawed by an error of public law since, following the decision in R (Eastenders Cash & Carry plc and another) v Revenue and Customs Comrs (No 1) [2012] 1 WLR 2067, there was no power to detain them for the purposes of investigation, whether or not it turned out later that the goods were in fact liable to forfeiture. (2) On the claimant’s costs application he held that, following the decision in R (Eastenders Cash & Carry plc) v Revenue and Customs Comrs (No 2) [2012] 1 WLR 2912, the costs shield in section 144(2) of the Act did not avail the commissioners because the written and oral grounds given for detaining the alcohol were unlawful as a matter of public law and could not amount to reasonable grounds within section 144(2). (3) On the claimant’s challenge to the commissioners’ decisions to seize goods that were seized before the goods which were the subject of the first judgment, he held that where there had been investigations for about a month before the seizure, there could have been no doubt that the commissioners, in stating that the alcohol was liable to forfeiture “in that no evidence of United Kingdom duty had been provided”, were stating that they believed the duty was owed on the goods in question. The commissioners appealed against the first two judgments; the claimant appealed against the third.
On an appeal in Eastenders (No 1) [2012] 1 WLR 2067 the Supreme Court was to decide whether it was a condition precedent to the power in section 139 of the Act to detain goods that they were in fact liable to forfeiture or whether the legality of the exercise of the power in section 139 did not depend on that. Pending that decision, the court was bound by the decisions in the two Eastenders cases. Accordingly, the starting point of analysis had to be that the legality of detention depended on whether the goods in question were in fact liable to forfeiture.
Commissioners’ appeal against the first judgment allowed. There was no requirement that when detaining goods, the reason for their detention had to be given. There was no requirement in the 1979 Act for any formal written notice of detention, nor was it necessary for the notice required by paragraph 1(1) of Schedule 3 to the Act to be given at the time of seizure, nor was notice required where goods were seized in the presence of the owner or his agent, pursuant to paragraph 1(2) of Schedule 3. Moreover, construing the power in section 139 as not authorising detention of goods save where there was an assertion that duty had not been paid was inconsistent with the discussion in Eastenders (No 1).
Commissioners’ appeal against the second judgment allowed. On the question of costs and section 144, it was necessary to consider the objective grounds that existed for detaining the goods, which involved considering the reason relied on at the time of the detention. In order to determine whether the commissioners had reasonable grounds for detaining the goods, the court should consider the circumstances that existed at the time the goods were detained. In basing his approach on a distinction which was rejected in Eastenders (No 2) the judge had erred.
Claimant’s appeal against the third judgment dismissed. The judge had plainly been correct in concluding that the notice given was a sufficient statement of the commissioners’ assertion that duty had not been paid on the alcohol.
Customs and Excise Management Act 1979, ss 139(1), 144(2)
Decision of Singh J [2012] EWHC 1106 (Admin) reversed.
Decision of Singh J [2012] EWHC 2191 (Admin) reversed.
Decision of Singh J [2012] EWHC 2975 (Admin) affirmed.