R First Stop Wholesale Ltd v HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE SINGH |
| Judgment Date | 27 March 2012 |
| Neutral Citation | [2012] EWHC 1106 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/7223/2011 |
| Date | 27 March 2012 |
[2012] EWHC 1106 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Singh
CO/7223/2011
Mr Geraint Jones QC and Mr Mark Glover (instructed by Rainer Hughes) appeared on behalf of the Claimant
Mr James Puzey (instructed by HM Revenue & Customs) appeared on behalf of the Defendants
Factual Background
Between 22 June and 24 June 2011 quantities of alcohol were detained and removed by the defendants from the claimant's warehouse at Unit 15, Cousins Street, Wolverhampton and also six retail premises in the Wolverhampton and South Staffordshire area. The retail businesses are owned by the claimant's director Mr Tajinder Singh, trading as a sole proprietor.
Also on 22 June 2011, fourteen bottles of spirits were seized as liable to forfeiture from two of the retail premises on Dudley Road, Wolverhampton, as the seizing officers found the UK Duty Paid stamps on them to be defective. On the same date a curtain-side lorry was found parked at the car park of a Sikh temple on Sedgley Street near the claimant's premises. The lorry is operated by the claimant in the course of its business. It was found to contain a full load of alcoholic goods as well as a document with goods and prices written on it. The lorry and the goods were seized and liable to forfeiture.
My attention has been drawn at this hearing to two examples of the notices of goods retained which were issued by the defendants to the claimant at the material time (see bundle A, tab A, pages 1 and 3). Those notices state against the heading "Goods":
"Detained and removed from premises pending evidence of duty status (CEMA 1979, section 139) as detailed overleaf."
The second notice is in similar terms and states against the heading "Goods detained and removed pending duty status" -
"CEMA 1979."
My attention was also specifically drawn to a witness statement which has been filed in these proceedings by Mr Simon Hewitt, a Higher Officer employed by the defendants, in particular paragraphs 6 to 9. At paragraph 9 of his witness statement, Mr Hewitt informs the court that -
"At 11.29 I informed Mr Singh that the goods ….. were being detained pending further inquiries into their duty status ….. "
On 28 July 2011 the first notice of seizure was issued in respect of the goods detained by the defendants. Also on that date these proceedings for judicial review were commenced. On 16 October 2011 a position statement from the claimant was filed which maintained that the defendants had had more than reasonable time in which to make decisions and that there was no entitlement to detain the goods unless they are liable to forfeiture. On 18 October 2011 the defendants filed a statement of progress regarding detention of the goods which stated that by then 85.8 per cent of the goods detained from the warehouse had been seized. The remainder were restored to the claimant in November 2011. At the hearing before me I was informed by counsel for the defendants that there is one box of wine that should have been restored to the claimant but was not. This was simply a mistake by the contractors used by the defendants, and I was told that no issue of legal principle arose for the court to decide as a consequence of this.
The warehoused goods comprised the majority of those originally detained. At that stage inquiries were continuing into the goods at the retail premises, although by then approximately 13 per cent of those goods had also been seized. All seizures had been appealed by notices of claim filed by the claimant's representative, save for goods on the lorry in respect of which a third party had claimed ownership. This seizure too has now been appealed.
On 4 November 2011 Mr Justice Sales granted permission to bring this claim for judicial review in respect of those goods still detained and not seized as at the date of his order. He did so on the basis that in respect of such goods there was an arguable claim that a reasonable period for investigation into their duty position had lapsed and that it may also have been arguable that the goods were not lawfully detained if they were not in fact liable to forfeiture. That last issue was one which arose as a matter of statutory construction in Eastenders Cash & Carry Plc v HM Revenue & Customs in which Mr Justice Sales gave judgment on 4 November 2011. He gave judgment in favour of the defendants but granted permission to appeal. That case was subsequently decided in January 2012 by the Court of Appeal in favour of the claimants in that case.
On 3 February 2012 a directions hearing took place in the present case before Mr Justice Cranston. This case was listed for a substantive hearing beginning today, 27 March 2012.
Material Legislation
The principal statute in this field is the Customs and Excise Management Act 1979 (the 1979 Act). Section 139 provides:
"(1) Any thing liable to forfeiture under the Customs & Excise Acts may be seized or detained by any officer or constable or any member of Her Majesty's armed forces or coastguard.
…..
(5) Subject to sub-sections (3) and (4) above and to Schedule 3 to this Act, any thing seized or detained under the Customs and Excise Acts shall, pending the determination as to its forfeiture or disposal, be dealt with, and, if condemned or deemed to have been condemned or forfeited, shall be disposed of in such manner as the Commissioners may direct.
(6) Schedule 3 to this Act shall have effect for the purpose of forfeitures, and of proceedings for the condemnation of any thing as being forfeited, under the Customs and Excise Acts."
Paragraphs 3, 6, 7 and 8 of Schedule 3 to the Act provide:
"3 Any person claiming that any thing seized as liable to forfeiture is not so liable shall, within one month of the date of the notice of seizure or, where no such notice has been served on him, within one month of the date of the seizure, give notice of his claim in writing to the Commissioners at any office of Customs and Excise.
…..
6 Where notice of claim in respect of any thing is duly given in accordance with paragraphs 3 and 4 above, the Commissioners shall take proceedings for the condemnation of that thing by the court, and if the court finds that the thing was at the time of seizure liable to forfeiture the court shall condemn it as forfeited.
7 ….. the forfeiture shall have effect as from the date when the liability to forfeiture arose.
8 Proceedings for condemnation shall be civil proceedings and may be instituted -
(a) ….. either in the High Court or in a magistrates' court."
I was informed that the usual forum for such proceedings is the Magistrates' Court. If a case involves a very high or large sum or raises complex issues of law or fact, the High Court might be approached. I was informed that the present case is one where the duty in issue which is said to have been lost to the public revenue, if the defendants are correct, is in the region of £26,000, not regarded by them as being a very large sum compared to other cases.
Section 141 of the 1979 Act provides:
"(1) Without prejudice to any other provision of the Customs and Excise Acts 1979, where any thing has become liable to forfeiture under the Customs and Excise Acts -
…..
(b) any other thing mixed, packed or found with the thing so liable,
shall also be liable to forfeiture."
Section 144 of the 1979 Act provides:
"(1) Where, in any proceedings for the condemnation of any thing seized as liable to forfeiture under the Customs and Excise Acts, judgment is given for the claimant, the court may, if it sees fit, certify that there were reasonable grounds for the seizure.
(2) Where any proceedings, whether civil or criminal, are brought against the Commissioners, a law officer of the Crown or any person authorised by or under the Customs and Excise Acts 1979 to seize or detain any thing liable to forfeiture under the Customs and Excise Acts on account of the seizure or detention of any thing, and judgment is given for the plaintiff or prosecutor, then if either—
(a) a certificate relating to the seizure has been granted under sub-section (1) above; or
(b) the court is satisfied that there were reasonable grounds for seizing or detaining that thing under the Customs and Excise Acts,
the plaintiff or prosecutor shall not be entitled to recover any damages or costs and the defendant shall not be liable to any punishment."
The Eastenders case
The issue as to the proper construction of Section 139 of the 1979 Act, and in particular whether it permits detention of goods merely on the basis that an investigation needs to take place in order to ascertain whether goods are liable to forfeiture and the defendants have reasonable grounds to suspect that they are so liable, was considered by the Court of Appeal in the recent case of Eastenders [2012] EWCA Civ 15, in which judgment was given on 20 January 2012.
Lord Justice Mummery dissented and would have dismissed the appeal by the claimants in that case. However the majority - Lord Justice Elias and Lord Justice Davis - allowed the appeal from the decision of Mr Justice Sales. At paragraph 78, Lord Justice Elias stated:
"78 ….. The inevitable inference from the way the section is drafted is that the conditions precedent to the lawful exercise of the power of detention must be precisely the same as those which will justify the lawful exercise of the power of seizure."
Lord Justice Elias noted...
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