R (Hoverspeed Ltd) v Commissioners of Customs and Excise; R (on the application of Andrews) v Commissioners of Customs and Excise
| Jurisdiction | England & Wales |
| Judge | Lord Justice Brooke,LORD JUSTICE BROOKE,MR JUSTICE BELL |
| Judgment Date | 31 July 2002 |
| Neutral Citation | [2002] EWHC 1630 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/4354/2001 & CO/911/2002 |
| Date | 31 July 2002 |
[2002] EWHC 1630 (Admin)
IN THE HIGH COURT OF JUSTICE
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Brooke and
Mr Justice Bell
Case No: CO/4354/2001 & CO/911/2002
Rhodri Thompson QC & Rabinder Singh QC (instructed by Richards Butler) for the Claimants
David Anderson QC & Thomas De La Mare (instructed by Solicitor for HM Customs & Excise) for the Defendants
SUMMARY
(This Summary forms no part of the judgment)
This case is concerned with applications for judicial review of aspects of the policies and procedures adopted by HM Customs and Excise at the Dover Hoverport in relation to the importation of alcohol, cigarettes and hand rolling tobacco bought in shops in France and Belgium. The four individual claimants challenged the lawfulness of the procedures by which the excise goods being carried by Mr and Mrs Andrews and Mr Wilkinson were seized, and their car, which belonged to Miss Andrews, was also seized because Customs officers considered that Mr Wilkinson's cigarettes and hand rolling tobacco had not been purchased in Belgium for his own use (for the facts see paras 48–62). Hoverspeed Ltd, for its part, made a general challenge to different aspects of Customs’ policies in relation to their passengers when they landed at the Hoverport (for the nature of these complaints, see paras 32–47).
In this case reliance was placed for the first time on an English court on the terms of Council Directive 92/112/EEC (“the Excise Directive”), as opposed to the UK statutory instrument, the Excise Duty (Personal Reliefs) Order 1992 (“the PRO”) by which this country set out to implement the requirements of European Community law (for the Excise Directive, see paras 99–116, and for the PRO, see paras 120–124).
The court held:
(i) That excise duty is only chargeable on alcohol, cigarettes and tobacco purchased by an individual in another member state of the European Union when they are held in this country for commercial purposes, as opposed to being held by the individual for his own use (para 164);
(ii) That the PRO wrongly reverses the burden of proof by requiring the individual to prove that he is not holding excise goods over the minimum indicative level (“MIL”: see para 7) for a commercial purpose (para 170);
(iii) that if an individual holds goods in excess of the MIL, this fact must be used solely as a form of evidence and not as a persuasive presumption that he holds the goods for a commercial purpose, although except in a borderline case this may not make much difference in practice (para 173);
(iv) That there must be reasonable grounds for suspecting an individual of holding goods bought in another member state for commercial purposes before he may lawfully be stopped and searched (para 180);
(v) That prima facie individuals and their excise goods must be free to travel across internal frontiers of the European Community without being impeded and delayed by checks for excise duty purposes, although such checks may be made where grounds of reasonable suspicion exist on an individualised basis (para 183);
(vi) That Customs officers must follow principles of proportionality when determining whether or not to restore goods and vehicles they have seized to their owners (paras 189–190);
(vii) that because Customs and Excise did not explain to the court the reasons why they stopped Mr and Mrs Andrews and Mr Wilkinson in their car, and because they suggested in their evidence that they might stop passengers for legally inadmissible reasons (paras 192–3), they did not prove to the court that there were reasonable grounds for stopping the car and questioning the occupants. The goods in it should therefore not have been seized. Nor should the car. In any event Customs’ refusal to return the car to Miss Andrews without even considering whether it might be restored to her on payment of an appropriately proportionate sum represented a disproportionate response (para 194).
INDEX
Part No Para No
1 Introduction 1
2 The reasons for Customs and Excise policies on tobacco and alcohol 4
3 The Commissioners’ strategies and policy guidance 9
4 Recent events at Dover Hoverport 22
5 Checks and lock-ins 33
6 Seizure of innocent travellers’ goods and travel bans 44
7 Mr and Mrs Andrews: the facts 48
8 Publicity for the Commissioners’ vehicle seizure policy 63
9 The effect of Customs activity on Hoverspeed's business 68
10 Relevant principles of EC law up to 1992 72
11 Relevant principles of UK law up to 1992 78
12 EC exemptions on imports of excise goods up to 1992 80
13 Relevant provisions of the Customs and Excise Management Act 1979 83
14 Freedom of movement of EU nationals and goods within the Community 95
15 The Excise Directive: the meaning of Articles 8 and 9 99
16 The effect of the transitional provisions for three Scandinavian countries 116
17 The Personal Reliefs Order and other changes in UK law since 1992 120
18 Mortimer, Goldsmith and Lindsay 130
19 Some ECHR arguments 145
20 Reasonable grounds for suspicion 159
21 Hoverspeed's six claims: our conclusions 162
22 The four individual claims: our conclusions 191
This is the judgment of the court, to which both its members have made substantial contributions.
1 Introduction
1. In these applications for judicial review Hoverspeed Limited (“Hoverspeed”), Mr Alan Charles Andrews, his wife Mrs Pauline Andrews, his sister Miss Lynne Andrews and Mr George Wilkinson challenge the lawfulness of the procedures adopted by the Commissioners for Customs and Excise (whom we will call “the Commissioners” or “Customs”) in checking and detaining Hoverspeed passengers arriving at Dover, and in seizing and refusing to return not only the goods they have bought in France or Belgium, and in particular cigarettes and hand rolling tobacco (“HRT”), but also the vehicles in which they are carried. The challenge is made by Hoverspeed in general terms and by the other four claimants in respect of a particular incident which occurred on 22nd August 2001 and the conduct of Customs thereafter.
2. These procedures, the Excise Duty (Personal Reliefs) Order 1992 (“the PRO”) and the policies under which Customs officers are conducting themselves at Dover, are alleged to give rise to unlawful restrictions on the rights of individuals to import to this country goods bought in other member states of the European Community, on their rights to receive services and to move freely within the Community, and on the right of Hoverspeed to provide services to their customers free from the inconveniences caused by these unlawful actions.
3. Although the main thrust of the claimants’ case is that the Commissioners’ policies and procedures violate their rights under EC law, they also rely on the European Convention on Human Rights (which we will call “ECHR” or “the Convention”) both through the vehicle of EC law, which includes the protection of Convention rights as a general principle, and through domestic law by virtue of section 6 of the Human Rights Act 1998.
2 The reasons for Customs and Excise policies on tobacco and alcohol
4. Successive UK Governments have adopted a policy of high rates of excise duty on tobacco products. The purpose of the policy is to protect public health, and in particular the health of the young, for whom the likelihood of establishing a smoking habit is particularly dependent on price. Our rates of excise duty are among the highest in the Community, and they are significantly higher than those imposed in France and Belgium. For example, in April 2002, UK excise duty and VAT on premium brand cigarettes constituted 78.9% of the recommended retail selling price: £3.46 on a typical price of £4.39 for a pack of 20. A similar pack could be bought in France for about £2.25, and for about £1.85 in Belgium. Yet cigarettes and tobacco in those countries are readily available to those who care to cross the Channel in order to purchase them from retail outlets on the European mainland or on the cross-Channel carriers themselves.
5. The price difference did not only benefit those who wished to travel in order to buy cigarettes for their own use. It also offered the opportunities of profit to those who wished to import them for clandestine commercial purposes. Even assuming a street price for smuggled premium cigarettes of as little as £2.50 for a pack of 20, a carton of 200 smuggled cigarettes would command a mark up of £2.50, if from France, or £6.50, if from Belgium, on the basis of the orthodox retail selling prices we have mentioned.
6. Smuggling (an expression Customs uses to embrace both large scale importing of goods for resale without paying UK duty and also smaller scale imports by individuals, which go beyond what is required for the individual importer's own, personal use), grew rapidly through the 1990s until 2000.
7. According to the Commissioners’ estimates, revenue lost through freight and non-freight smuggling of cigarettes and HRT amounted to £0.9 billion in 1996/7. This annual loss rose to £3.5 billion in the year ending 31 March 2001. In the calendar year 1996, £678 million revenue was lost through non-freight, cross-Channel smuggling of tobacco products (£943 million if alcohol smuggling is included). For 2000, the figure was £1,362 million (£1,690 million). The PRO and Council Directive 92/12/EEC (“the Excise Directive”) both provided a guide level or Minimum...
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