Mr. Justice Edwards-Stuart:
Introduction
- In this application for judicial review the Claimant challenges the seizure by the UKBA of a consignment of about 25,000 litres of mixed beers on 20 September 2012 at Eastern Docks, Dover.
- The Claimant says that the Defendant has not given a lawful reason for the seizure, either at the time or subsequently. Accordingly the Claimant seeks a declaration that the seizure was unlawful. However, on closer analysis the Claimant's original challenge had two components, which are identified at paragraph 16 of the Claimant's Grounds in the following terms:
i) No objective fact sufficient to justify seizure has been averred;
ii) Same was not given at the time of seizure.
- The basis of these grounds of challenge is an email of 26 September 2012 from the UKBA to the Claimant, in which it was stated that the Claimants' goods were seized:
"... as it is believed that the unique Administrative Reference Code has been used on more than one occasion. Concerns into the paperwork have also been raised."
The background
- The Claimant carries on business in Cyprus and is the owner of bonded goods, that is to say goods on which duty has not been paid, which are stored in a bonded warehouse outside Calais run by a company called Consortium. The Claimant also has an account with another bonded warehouse in the UK, in Barking, called Seabrook Warehousing. Goods on which duty has not been paid can be moved between bonded warehouses under prescribed duty suspension arrangements.
- On 20 September 2012 a lorry carrying a consignment of beer from Consortium's bonded warehouse entered the UK, purportedly en route for Seabrook. It was carrying paperwork which, on its face, was valid and corresponded with the goods carried. The UKBA says that there are legitimate grounds for concern about this paperwork.
- When the driver was stopped at Dover, he was told that the goods were being seized. He was given a document called a "Seizure Information Notice". This gave the registration number of the vehicle stopped, YIL 3012, and its trailer, No. 1257, and described the load as 24,900.48 litres. It then stated:
"Please note that the above things are liable to forfeiture and have been seized under Section 139 of the Customs and Excise Management Act 1979 from ..."
It then gave the details of the driver, Mr. Leon Ray.
This notice was also accompanied by a warning letter, addressed to Mr. Ray, which included the following:
"The goods listed on the attached schedule (as detailed on form BOR 156) have been seized under section 139 of the Customs and Excise Management Act 1979. This is without prejudice to any further action that may be taken against you in connection with this matter."
- When the Claimant got to hear of the seizure, its director, Mr. Rashid Haq, sent an email to the UKBA on 24 September 2012 in which he said:
"I have received notification of seizure of goods with the above reference. I note that there is no reason provided for the seizure. I believe you are duty bound to provide a legitimate reason and request one be presented immediately.
Further I would like to remind you that pursuant to a Judgment obtained in the High Court, The Queen on the Application of Eastenders Cash and Carry PLC v The Commissioners of HMRC, in which the court found that there could be no detention of goods and this power was taken away from them, HMRC must be sure that the goods that they have seized are liable to forfeiture."
- Following a brief acknowledgement, Mr. Haq then sent a further email, on 26 September 2012, in these terms:
"I have received notification of seizure of goods with the above reference. I note that there is no reason provided for the seizure. I believe you are duty bound to provide a legitimate reason and request one be presented immediately.
The goods were in transit from my company account at Consortium's bonded warehouse, in France to the account of Norvic Limited at Seabrook's bonded warehouse in UK.
The only reason I have been given (by the transporter) for the seizure is that the load is suspected to be identical to a previous load, transported two days prior. It was in fact an identical load, but a separate order with separate documentation. I believe HMRC have not checked this.
I have attached my Invoice (...) to my client and my Purchase Order (...) to my supplier. Also attached is the invoice from my supplier to me (Invoice 14). I have yet to transfer the funds to my supplier for these goods and will be doing so shortly.
If you want to check the documentation (ARC numbers) of the two loads that you believe are one and the same, you will see that these are two separate orders. Once this has been established, I expect the goods to be released and allowed to be delivered to the intended destination."
- On the same day, 26 September 2012, the Defendant replied in the following terms:
"I can inform you that the vehicle, trailer and goods were seized as it is believed that the unique ARC has been used on more than one occasion. Concerns into the paperwork have also been raised.
Once a tally of the goods has been completed you will receive an official notice of seizure by post stating reason for seizure and how you can request restoration and/or appeal against the seizure.
In the meantime, if you wish to request restoration and/or appeal against the seizure, please address this to:
…
Further to your emails, I would like to gain some clarification on the information you have provided, therefore can you please provide a response to the following:
1) Can you please inform me which consignment the invoices/purchase orders you have sent in your email of 25/09/2012 refer to? (The previously imported consignment or the second consignment)
You state that you have sent two identical consignments to the UK on or around the date of the seizure relating to 1717/12 therefore please provide the following:
1) ARC number for each consignment.
…
[there followed 16 further requests]
Your co-operation is appreciated."
- Two days later, on 28 September 2012, Mr. Haq replied in these terms:
"The invoices/purchase orders I have supplied you obviously refer to the consignment you have seized. Why would I supply you with those of another consignment?
The answers to the rest of your email are mostly irrelevant, as they are not required nor requested by my company, ie. the CMR, ARC, etc. You are well aware of these and which other documents I am required to keep and provide, but you insist on wasting people's time, including that of you and your colleagues.
You will be receiving correspondence from my solicitor in due course: I have forwarded your email to him."
- So far as I am aware, Mr. Haq has never supplied the ARC for the consignment on 18 September 2012.
- Three weeks later the UKBA, now renamed Border Force, sent a letter dated 19 October 2012 to the Claimant. It said this:
"This letter follows the issue of the BOR 156 Seizure Information Notice. It sets out in more detail why the items were seized and confirms the actual amount of goods seized. This is not a Notice of Seizure and it does not affect the date by which you may appeal the legality of the seizure.
By virtue of paragraph 1(2) of Schedule 3 of the Customs and Excise Management Act 1979 (CEMA), the seizure was properly made on 20/09/2012 and you have one month from that date to give notice if you wish to claim the goods are not liable to forfeiture (paragraph 3 of Schedule 3 of CEMA). Failure to give proper Notice of Claim within the relevant time will result in the goods being deemed condemned (paragraph 5 Schedule 3 of CEMA).
…
Border Force has identified that the vehicle YIL 3012 also travelled to the UK at 20:35 hours on 18/09/2012 manifested as alcoholic beverages.
There was a discrepancy between the date of the paperwork (18/09/12) which appeared to have been produced before the ARC had been submitted (19/09/12)."
(Original emphasis)
- I observe in passing that is hard to imagine a more cynical letter. It told the Claimant on 19 October 2012, the very day on which the time for making a claim expired, that it had one month from 20 September 2012 in which to make such a claim.
- However, the Claimant's solicitors had in fact already written to Border Force to request the defendant to start condemnation proceedings and to demand the restoration of the goods because they had been unlawfully seized.
The relevant statutory framework
- Section 139 of the Customs Exercise Management Act 1979 ("CEMA") provides:
"(1) Any thing liable to forfeiture under the Customs and excise Acts may be seized or detained by any officer or constable or any member of Her Majesty's Armed Forces or coastguard.
…
(5) 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."
- Schedule 3 contains the following provisions:
"1. …
(1) The Commissioners shall, except as provided in sub-paragraph (2) below, give notice of their seizure of any thing as liable to forfeiture and of the grounds therefor to any person who to their knowledge was at the time the seizure the owner of one of the owners thereof
(2) Notice need not be given under this paragraph if the seizure was made in the presence of-
(a) the person whose offence or suspected offence occasioned the seizure; or
(b) the owner or any of the owners of the things seized or any servant or agent of his; or
…
2. Notice under paragraph 1 above shall be given in writing and shall be deemed to have been duly served on the person concerned -
if delivered to him personally;
(a) if addressed to him and left or forwarded by post to him at his usual or last known place of abode or business
…
3. Any person claiming that anything 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 seizure, give notice of its claim in writing to the Commissioners at any office of customs and excise.
…
5. If on the expiration of the relevant period under paragraph 3 above for the giving of notice of claim in respect of anything no such notice has been given to the Commissioners, or if, in the case of any such notice given, any requirement of paragraph 4 above is not complied with, the thing in question shall be deemed to have been duly condemned as forfeited.
6. When notice of claim in respect of anything 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.
Paragraph 8 of the Schedule provides that proceedings for condemnation shall be civil proceedings and may be instituted either in the High Court or in a magistrates court."
- Section 144 of CEMA 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 ... and judgment is given for the plaintiff or prosecutor, then if either-
(a) …
(b) the court is satisfied that the were reasonable grounds for seizing 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."
- Section 170B of CEMA provides that:
"(1) If any person is knowingly concerned in the taking of any steps with a view to the fraudulent evasion, whether by himself or another, of any duty of excise on any goods, he shall be liable -
…
(2) Where any person is guilty of an offence under this section, the goods in respect of which the offence was committed shall be liable to forfeiture."
- Condemnation proceedings are currently on foot in the East Kent Magistrates Court. The hearing is presently listed for either late 2013 or early 2014.
- I turn now to the Excise Goods (Holding, Movement and Duty Point) Regulations 2010 (SI 2010/593):
"52.-
(1) this Part applies to the movement of excise goods dispatched from another Member State to the United Kingdom under duty suspension arrangements.
53.-
(1) A movement to which this Part applies must take place under cover of an electronic administrative document or a fallback accompanying document.
(2) A printed version of the electronic administrative document, the fallback accompanying document or any other commercial document on which the unique administrative reference code is clearly stated, must accompany the goods.
54.-
(1) ... The consignee of those goods must, using the computerised system, send to the Commissioners without delay, and in any event no later than five business days after their receipt by the consignee or, as the case may be, their arrival at a place of direct delivery ... a report of receipt that complies with the EU requirements.
(2) ...
(3) The Commissioners must carry out an electronic verification of the data in the report of receipt.
(4) Where the data in the report of receipt are invalid, the Commissioners must, using the computerised system, inform the consignee of that fact without delay.
(5) Where the data in the report of receipt are valid, the Commissioners must, using the computerised system -
(a) register the report;
(b) notify the consignee that it has been registered; and
(c) send it to the competent authorities of the Member State from where the excise goods were dispatched."
- These provisions give effect to the EU legislation set out in Council Directive 2008/118/EC, in particular Article 21.
The authorities
- In Commissioners for Her Majesty's Revenue and Customs v First Stop Wholesale Ltd [2013] EWCA Civ 183, the Court of Appeal considered three linked judgments of Singh J arising out of the detention of large quantities of alcohol from a warehouse belonging to the Claimants. It is important to note at the outset that the first two appeals concerned the lawfulness of the detention of goods, not their seizure.
- The Court of Appeal considered its own previous decision in R (Eastenders Cash and Carry plc) v Revenue and Customs Commissioners [2012] EWCA Civ 15, in which the court held that section 139 of CEMA empowers detention only if the goods were in fact liable to forfeiture on account inter alia of unpaid duty. It was held that the conditions precedent to lawful exercise of the power of seizure were the same as those of the power of detention. Reasonable grounds for detention or seizure were not a sufficient condition of lawfulness. This decision is pending consideration by the Supreme Court, but at the moment it represents the law and this court is bound by it.
- The issue that arose in First Stop was whether this condition precedent is both a necessary and a sufficient condition of detention: see paragraph 22 of the judgment in the Court of Appeal. The court's answer to this - in general terms - was no. In other words, a decision to seize goods that is subsequently shown to be justified on the facts can nevertheless be impugned on public law grounds. To take an extreme example mentioned by the court in First Stop, to seize goods on the ground that the driver had red hair would be unlawful even if it subsequently turned out that they were being smuggled.
- However, the Court of Appeal held that, in the case of detention of goods, there was no requirement for reasons to be given at the time of detention. In reaching this conclusion Beatson LJ noted the contrast between the absence of any requirement for reasons in relation to detention and the specific requirement in relation to seizure in paragraph 1 of Schedule 3 for a notice of the fact of the seizure and of the grounds therefor. But the court noted that such notice did not have to be given at the time of seizure where the owner was not present at the time.
- At paragraphs 29 and 30 of his judgment Beatson LJ said this:
"29. Thirdly, even in the case of seizure, notice is not required where goods are seized in the presence of the owner or the owner's agent: see paragraph 1(2) of Schedule 3. In the light of this, it cannot be argued that the articulation of the reasons for detention is a condition precedent to the legality of the detention.
30. There is a more fundamental difficulty. Despite the general public law arguments which persuaded the judge and to which I have referred, requiring such reasons at the time the goods are detained cuts directly across and is inconsistent with the reasoning in Eastenders No 1 that goods could be liable to forfeiture on grounds which were not advanced or even known at the point of seizure or detention. I reject the submission that the statements by Elias and Davis LJJ at [93] and [108] were obiter. This court is bound by them. It will be for the Supreme Court to assess how the general public law principles which are referred to by the judge at [16] and by me at [24] are to be accommodated within the structure of the 1979 Act when Eastenders No 1 comes before it."
- The Claimant relies on the decision of Harrison J in Her Majesty's Commissioners of Customs and Excise v Venn [2001] EWHC Admin 1055. In that case he said, at paragraph 23:
"In my view, the reason why no notice of seizure is required when it takes place in the circumstances specified in paragraph 1(2), is that it would have been made clear to the persons referred to in that paragraph, being present at the time, that the goods were being seized as liable to forfeiture and why that was so. I cannot think that they should be in any worse position than the owner referred to in paragraph 1(1) who has to be so notified because he was not present at the time."
- Harrison J then referred to paragraphs 3 and 4 of Schedule 3 and the requirement for making a claim within one month of seizure or the date of the notice of seizure, whichever is later. At paragraph 33 of his judgment he said:
"I accept that there is a difference between the words 'seized' and 'detained' in section 139. In my view, the word 'detained' connotes that the person already has possession of the thing and is keeping it. I note that section 139 uses the words 'seized or detained' rather than 'seized and detained'. It is not, therefore, dealing with a detention following a seizure under section 139. It is, in my judgment, dealing with a situation where the thing has already come into the appellant's position by some means other than a seizure under section 139."
- At paragraph 35, he expressed his conclusion on this point in these terms:
"In those circumstances, when seizure is made in the presence of any of the persons specified in paragraph 1(2) of Schedule 3 it is, in my judgment, necessary, in order to constitute a valid seizure under section 139, that it is made clear unequivocally to such a person that the goods are being seized as being liable to forfeiture and why that is so. If that is done, any failure by such a person to give notice of claim within the one month period, such as occurred in this case, can only be that person's fault."
- I was told by Mr. Marc Glover, who appeared for the Claimant, that this decision was cited to the Court of Appeal in First Stop, but was not considered because it concerned seizure and not detention. He submitted that in these circumstances the members of the court must be taken to have endorsed it.
- I have difficulty with this submission. Paragraphs 29 and 30 from the judgment of Beatson LJ, which I have already quoted, do not sit easily with the conclusion of Harrison J in Venn. But reconciliation becomes even more difficult when one considers paragraph 37 of Beatson LJ's judgment in First Stop, where he said this:
"Secondly, for the reasons I have given, a notice under paragraph 1 of Schedule 3 is not a requirement for the exercise of the power to seize. Paragraph 1(2) of Schedule 3, to which I have referred, identifies circumstances in which there is no need to serve any notice at all. Even where a notice is required, there is no requirement that the notice be given at the time of the seizure. The lawfulness of the decision is a matter that will be decided in condemnation proceedings. The consequence of not serving a notice or serving one at a later stage relates to the time from which the goods' owner will have to serve a notice under paragraph 3 of Schedule 3 claiming that the goods are not liable to forfeiture."
(My emphasis)
- Mr. Glover submitted also that the only notice required was a notice of the seizure: the notice did not have to include the grounds. As a matter of language, I do not consider that this is correct. The sentence cannot be read as a requirement to give (a) "notice of the seizure of any thing as liable to forfeiture" and, separately, (b) "of the grounds therefor". If read in this way, the surplus "of the" before "grounds" does not make grammatical sense.
- I note that, for slightly different reasons, the First-tier Tribunal Judge Barbara Mosedale reached a similar conclusion in Pash v Director of Border Revenues [2013] UKFTTC 100 (TC). This was a decision to which Mr. Glover referred me for other reasons. Judge Mosedale concluded that paragraph 1 of Schedule 3 was not complied with until there had been a notice of both the seizure and the grounds for it (see paragraphs 39 and 46 of the Decision). I agree with her reasons for reaching that conclusion, which are in addition to my own as set out above. She concluded also (at paragraph 53) that it is not necessary to cite the legislative basis of the seizure if the reason for the seizure is made clear. I agree with this conclusion also.
- It must be remembered that the notice given under paragraph 1 must, by paragraph 2, be in writing. Paragraph 37 of the judgment in First Stop makes it quite clear that a written notice giving the grounds of seizure does not have to be given at the time, whoever is present. This leaves the question of whether such grounds have to be given orally at the time of seizure. As I have already said, paragraphs 29 and 30 suggest that they do not.
- For the reasons that I have given I conclude, albeit not without hesitation, that it is not a precondition of a lawful seizure that the reasons for it must be given at the time. I have to confess that this is not a conclusion that I reach with any enthusiasm and that, were it not for the judgment of the Court of Appeal in First Stop, my inclination would have been to follow the judgment of Harrison J.
- I should add for the sake of completeness that Mr. Glover referred me also to the decision of the Divisional Court in R v Customs and Excise Commissioners, ex parte Mortimer [1999] 1 WLR 17, but in spite of the eminence of the constitution of the court, I do not consider that this decision is of any assistance in the present case.
- However, the conclusion that I have just reached does not affect the obligation to serve a notice on an owner who is not present (either by himself or his agent) at the time when the goods are seized, once his identity becomes known to Border Force. This is because the requirement in paragraph 1(1) is mandatory: the Commissioners "shall" give notice of the seizure and of the grounds therefor. There is no special form for the notice, but there appears to be a practice adopted by the UKBA/Border Force of giving the information required by the notice but at the same time saying that it is not a "Notice of Seizure". The purpose of this is to prevent time for making a claim from running from a date later than the date of seizure. This practice is to be deplored. It is an attempt to defeat the protection afforded to an owner of goods by paragraph 3 of Schedule 3 and it is a practice that must cease forthwith. The letter of 19 October 2012, to which I have already referred, is an example of this practice.
- Mr. Will Hays, who appeared for the Defendant, submitted that the state of mind of the seizing officer is irrelevant because the court is concerned only with whether or not the goods were in fact liable to forfeiture. Whilst this is true in terms of the final determination of the party's rights, I consider that the seizing officer's state of mind is relevant. In the course of argument, Mr. Hays felt compelled to concede that if the seizing officer was acting in bad faith, the seizure would be unlawful. In my judgment, this concession was clearly correct.
- It is self-evident to me that arbitrary seizure of goods by agents of the state cannot be justified: it would plainly be a breach of the rights conferred by article 1 of the First Protocol ("A1 P1") to the European Convention for the Protection of Human Rights and Fundamental Freedoms (as brought into English law by section 3(1) of the Human Rights Act 1998). In my judgment there must be some constraint under which agencies such as the Border Force are permitted to operate.
- When an organisation treats different cases in the same way, or similar cases in a different way, it can be said that its approach is arbitrary.[1] However, this is not an approach that can be applied to a single case. Clearly, the first requirement of any treatment if it is not to be regarded as arbitrary is that it is done in good faith (what Beatson LJ described in First Stop as "propriety of purpose", at paragraph 24). I consider that a second requirement is that it must meet the Wednesbury test, in other words that it is not irrational or perverse. A decision might be irrational or perverse if there was no coherent basis for believing it to be justified.
- Another aspect of the problem is that, in order to satisfy A1 P1, seizure of the goods must be a proportionate step to take in the circumstances. But even on this approach I consider that a rationality test will still apply. In the case of a seizure under section 139 of CEMA, where the seizure does not represent a final declaration unless the owner fails to make the claim in time, the threshold for assessing proportionality may be fairly low but that does not mean that it can be overlooked.
- I have considered whether or not a seizure should be open to challenge on public law grounds if the seizing officer honestly suspected, but did not have reasonable grounds to suspect, that the goods were liable to forfeiture. As Elias LJ pointed out in Eastenders No 1, to apply a test of honest suspicion (rather than reasonable suspicion) might be a more effective way of securing the objective of preventing taxpayers from avoiding their obligations (see paragraph 90). I consider that to apply a test of reasonable suspicion may set the bar too high for a public law challenge in that it may involve setting a higher threshold than that produced by the application of a Wednesbury test.[2]
- With these considerations in mind I will have to consider what information the Border Force had at the time of seizure that was relevant to these particular goods. But first I must address two preliminary points.
Was the driver the agent of the Claimant?
- The first point taken by the Defendant is that the driver, Mr. Ray, was the agent of the Claimant and so the Defendant did not have to serve a notice of the seizure or of the grounds for it. In order to consider this point it is necessary to set out in a little more detail the arrangements leading up to the consignment of this load by Consortium.
- By an email dated 18 September 2012 timed at 14:10 hours the Claimant instructed Consortium to transfer the "following load" to the account of Norvic Ltd at Seabrook's bonded warehouse in Barking, giving the Claimant's reference for the transaction. The email then set out the precise quantities and types of beer to be delivered.
- The email was silent about the means by which the load was to be transported: that was evidently left to Consortium. According to the documents of carriage, the carrier was European Transport Services. The Trailer No. was wm52daf/1257. Trailer No. 1257 and the tractor unit driven by Mr. Ray belonged to Smylie Transport, who had leased the tractor unit and trailer on a 28 day lease to GMC Contracts with effect from 3 September 2012. The identity of Mr. Ray's employer is apparently unknown to both parties.
- There is no evidence of the existence of any contract between the Claimant and the carrier, European Transport Services. The latter appears to be an independent contractor with or through whom Consortium made arrangements for the carriage of the goods. Whether European Transport Services arranged the carriage or was the actual carrier is unclear, but the former looks more likely. It is also unclear whether Mr. Ray was an employee of one or other company or was a self-employed driver (and therefore himself an independent contractor).
- These facts are not a promising basis for a submission that the driver, Mr. Ray, was the Claimant's agent. The Defendant says that an agency can be inferred from the fact that the Claimant knew of the seizure and was able to query it some four days later, quoting the correct Border Force reference.
- In my judgment no such inference can be drawn. One would expect Mr. Ray to report the seizure to those by whom he was employed or engaged, who would in turn be expected to notify the consignor with whom they had contracted. Either they or the consignor would then have notified the Claimant. It seems to me that this is a perfectly natural route for the information to follow and that it gives rise to no inference either way as to the precise status of Mr. Ray.
- I consider that the evidence points, if anywhere, to the conclusion that the carrier was an independent contractor (or subcontractor) engaged by Consortium to carry the goods to Barking. In any event, I am quite satisfied that the Defendant has not discharged the onus of showing that Mr. Ray was the agent of the Claimant for the purpose of receiving a notice of seizure.
- However, a point of some importance does emerge from a study of the documents because in the email of 26 September 2012, the terms of which I have already set out, Mr. Haq of the Claimant said that he had been given "by the transporter" a reason for the seizure. That reason was that the load was suspected to be identical to a previous load which had been transported two days earlier.
- Mr. Haq rebutted this by asserting that, whilst the earlier load was in fact an identical load, it was a separate order with separate documentation. This shows beyond any doubt that Mr. Haq understood only too well from the information that had been passed back by the driver or the carrier that the load had been seized because the UKBA thought that an earlier load had been carried using the same documentation.
- Accordingly, not only does the agency point fail but it is clear also from the email of 26 September 2012 a reason for the seizure was given to someone at or close to the time of seizure. It might have been the driver or it might have been given later to the carrier when he discovered that the tractor and trailer had been seized also.
- In support of this application Mr. Haq made a witness statement, in which he said that he received a copy of the Seizure Information Notice, which was forwarded to him, and that he was also informed that the driver had been given no reason for the seizure "that could constitute a lawful reason for the seizure of the goods". This is ambiguous. It could mean either that the driver was given no reason at all, or that he was given a reason but that, in the view of Mr. Haq, it was not a "lawful reason".
- If it meant the former, then Mr. Haq should have explained why that was the case in the light of his email of 26 September 2012, which suggests that a reason might have been given to the driver. If it meant the latter, then it is simply disingenuous. Mr. Haq should have explained why he said what he did in his email of 26 September 2012 and, in particular, why any reason given was not a lawful reason. It was not good enough to deal with it in his witness statement in the way that he did. This smacks of a lack of candour.
- From this it must follow that, to the extent that the Claimant's claim is based on the Defendant's failure to give a reason for the seizure at the time, this is not an allegation that the Claimant has proved (if it has to). However, the Claimant has had an opportunity to provide a satisfactory explanation for what was said in the email of 26 September 2012, but has failed to do so. The Defendant's evidence suggests that no ground for the seizure was given to the driver, but her case is that no such notice was necessary and so such evidence was not required. The position is unsatisfactory.
The allegation that the driver committed an offence
- This was a new point taken for the first time in the Defendant's skeleton argument.
- In my view there is no evidence that Mr. Ray was a person whose offence or suspected offence occasioned the seizure of the load. He told the UKBA officer that the trailer was fully loaded when he collected it. The documentation that he was given was valid on its face.
- It is, perhaps, worth pointing out that the procedure for the movement of duty suspended loads envisaged by Article 21 of the Council Directive requires the consignor to submit a draft electronic administrative document to the competent authorities using the computerised system. The computer then carries out an electronic verification of the data submitted and, if it appears valid, issues the unique administrative reference code and transmits it to the consignor.
- I can see no reason why Mr. Ray, assuming that he studied the documents in some detail, should have been concerned to note that the Delivery Note was dated 18 September 2012. He, unlike the UKBA, would have had no means of knowing when the ARC was issued because the date and time of its issue is not shown on the documents: that is information that only the UKBA can retrieve from the computer.
- It is now known that checks carried out by Border Force have shown that Mr. Ray has been involved in three previous seizures, each case being one in which duplicate consignments have been carried using the same ARC. However, I know nothing about those incidents and it seems to me to be quite possible that Mr. Ray has simply been an innocent puppet exploited by others. Recent information shows also that European Transport Services is an entity used by a well-known smuggler. However, that in itself does not implicate Mr. Ray.
- If the Defendant wishes to rely on the fact that Mr. Ray was guilty of an offence when he brought the trailer into the UK on 20 September 2012, it must prove it. The evidence before the court on this application falls well short of any such proof. I therefore reject this argument.
The facts known to Border Force at the time of seizure
- In support of its Detailed Grounds of Defence the Defendant served a witness statement of Kayti Wellard, a senior officer in the Revenue Fraud Detection Team ("RFDT") of Border Force. She has worked in Customs for 12 years.
- According to her witness statement the following information was available to Border Force officers before the goods were seized on 20 September 2012:
i) The tractor unit left the UK driven by Mr. Ray on "the early train" on 20 September 2012.
ii) The trailer was picked up already loaded.
iii) When asked if he was delivering the load to Seabrooks, Mr. Ray said: "yes, probably".
iv) The contents of the Consignment Note and the Delivery Note which accompanied the goods, the latter being dated 18 September 2012.
v) That the unique Administrative Reference Code ("ARC") was automatically generated by the EU customs computer at 17:15 hours on 19 September 2012. It was a valid code.
vi) The fact that multiple use of a single ARC is a well-known means of avoiding payment of duty.
vii) The same tractor unit had previously entered the UK on 18 September 2012 at 20:35 hours with a load of alcoholic beverages.
viii) The driver, Mr. Ray, told the interviewing officer at Dover that the earlier load brought in on 18 September 2012 had not been delivered to a bonded warehouse, but to a business called "Titan Truckstop".
- Ms. Wellard says that in the light of the information listed at (i)-(vii) - and possibly (viii) also - above, Border Force concluded that the ARC for the load stopped on 20 September 2012 had been used on a prior occasion for a previous load, which had probably been diverted in the UK without payment of the excise duty.
- Mr. Glover submitted that Border Force were, at best, acting on a suspicion or belief that the goods were liable to forfeiture and that such a belief is not sufficient to justify a seizure because it reflects the wrong test. He submitted that a seizure is only justified if the goods were in fact liable to forfeiture: it is not made lawful because the Border Force officer reasonably believed the goods to be so liable.
- In fact, Mr. Glover went further and submitted that it was for the Defendant, prior to seizure, to satisfy itself that the thing to be seized was liable to forfeiture. Unless the UKBA could establish knowledge of that precedent fact, it was argued, it had no right to seize the goods.
- In my view this argument is misconceived. In many cases, at the time of seizure the officer will not know what finding will ultimately be made by a court on the question of whether or not the goods were liable to forfeiture. He or she can only have a belief (or a suspicion) that the goods are so liable. Whether or not the requirements of the statute are satisfied at the time of seizure will not be known until the court has made a finding to that effect: see Eastenders No 1 at [92].
- But the state of mind of the seizing officer is not irrelevant. The seizure is an invasion of the rights of the owner of the goods in his property and so the decision to seize must be capable of justification on public law grounds. For the reasons that I have already given, I consider that it will be capable of this if the decision to seize was honestly taken, was not irrational or perverse and that the seizure itself was not a disproportionate step.
Was the decision to seize irrational?
- In the course of his oral submissions Mr. Hays conceded, inevitably in my view, that the assertion that the ARC issued on 19 September 2012 had been used for a previous importation on 18 September 2012 was unsustainable upon the information available to the Border Force at the time. However, he did not concede that the decision to seize goods was an irrational one. His broad submission was that the circumstances would have to be most unusual before a seizure carried out under section 139 of CEMA could be impugned on public law grounds. I understood that the concession was limited to cases of bad faith or something similar.
- Mr. Hays submitted that the officers at Dover were entitled to be suspicious of the fact that the Consignment Note was dated 18 September 2012, the day before the ARC was generated. Ms. Wellard said that in her experience it is usual for the date shown on the Consignment Note to match the date on which the ARC was generated. She said also that the conclusion of the Border Force officers on the ground was that the unique ARC on the paperwork presented to the officers at Dover for the seized load had been used on a prior occasion, with the earlier load having already been diverted within the UK without payment of UK excise duty. But, as I have already noted, it is now conceded that this conclusion was unsustainable.
- Ms. Wellard said also that the Border Force considered that the explanation of the anomaly in the dates is that the paperwork "… had been falsified in order to suggest to Border Force that the load intercepted by them on 20 September 2012 was the original load despatched on 18 September 2012 from Consortium".
- I have tried very hard to see how backdating the date on the Consignment Note to a date prior to the issue of the ARC could be of any practical use in facilitating an evasion of duty. The Consignment Note is useless as a document of carriage under duty suspension arrangements (that is, where goods are being transferred between one bonded warehouse and another) unless it has a valid ARC. This particular ARC, automatically generated at 17:15 hours on 19 September 2012, could not have found its way onto a Consignment Note that was issued before that time.
- It is theoretically possible that a vehicle carrying an identical load could have been issued with this documentation and brought into the UK late on 19 September or early on 20 September. If the vehicle documentation was not checked and recorded at the point of entry, then duplicate documentation could have been used to accompany another load brought in later on 20 September, such as that which was seized. The difficulty with this hypothesis is that it is pure speculation: there is no evidence that the Claimant moved such a load during the relevant period and it has not been suggested that it did. All that was known to Border Force was that a lorry carrying a similar load belonging to the Claimant entered the UK at 20:35 hours on 18 September 2012 - over 20 hours before the ARC in question was generated. However, I can see that the disparity between the date on the Consignment Note and the date when the ARC was generated would be a matter about which Border Force might be expected to have some concerns.
- An additional aspect, mentioned by Border Force, is that the trailer number noted on the documents, 1257, was marked using a stencil and a black marker pen on an easily removable/changeable plastic plate secured by clips. It is the experience of Border Force that the use of such temporary numbers is often intended to facilitate the manipulation of trailer numbers to match documents so as to enable multiple consignments to be run on one ARC. Whilst of course not determinative of the existence of a fraud, I consider that this is a relevant factor (although not mentioned by Ms. Wellard, it must have been noticed by the officers at the time).
- On the basis of this information I am not satisfied that there were reasonable grounds for suspecting or believing that the goods in this load were liable to forfeiture because they were the subject of an attempt to evade duty.
- But it has not been submitted that this seizure was carried out by the officers of Border Force in bad faith. The challenge is that it was carried out without having lawful or adequate reasons. However, the challenge has never been squarely put on the basis that this seizure was either arbitrary or made on the basis of grounds that were irrational. As I have already explained, the challenge was put on the basis that the seizing officer must know a precedent fact that makes the goods liable to forfeiture. For the reasons that I have given earlier in this judgment, I have rejected that ground of challenge.
- Taking all the circumstances into account, I have concluded, albeit not without some hesitation, that when the officers of Border Force seized the Claimant's load on 20 September 2012, they did so in good faith and honestly suspecting that the goods were being imported as part of a plan to evade payment of duty.
- Whilst, as I have already said, I consider that there were not, on analysis, reasonable grounds for this suspicion, I do not feel able to say that it was an irrational suspicion. There were reasonable grounds for suspecting that the earlier load imported on 18 September 2012 had been released onto the market without payment of duty, and so there were grounds for regarding the Claimant's operations in general with suspicion. This, coupled with the apparent irregularity in the date of the Consignment Note and the use of the plastic number plates, raised a legitimate source of concern.
- In the light of these considerations I am not prepared to find that the decision to seize the load on 20 September 2012 was one that can be characterised as either irrational or perverse. Whether or not it was ultimately justified under the provisions of section 139 of CEMA is an issue that must be determined in the condemnation proceedings.
Was the decision to seize proportionate?
- I now turn to the question of proportionality in the context of A1 P1. This was not the subject of any submissions by counsel because the challenge to the seizure was mounted primarily on the absence of a lawful reason for the detention. It was for the Claimant, if it wished, to mount a challenge on the basis of proportionality but it did not do so. I will therefore deal with this point shortly.
- The seizure was not final, in the sense that there existed a means for the Claimant to cause condemnation proceedings to be issued by the Defendant in which the lawfulness of the seizure can (and in this case will be) determined. There is clearly a high public interest in the prevention of smuggling and I consider that, if the actions of Border Force in seizing the goods were carried out in good faith and cannot be shown to be either irrational or perverse, seizure is a proportionate step because the owner of the goods has the protection of being able to invoke condemnation proceedings.
Did the Defendant serve a notice of seizure?
- The Claimant's case is that it did not. Mr. Glover submitted that neither the email of 26 September 2012 nor the letter of 19 October 2012 could constitute a valid notice of seizure because, on their face, each purported to disclaim that it was.
- As I have already mentioned, I agree with Judge Mosedale that the notice served under paragraph 1 of Schedule 3 to CEMA does not have to cite the legislative basis of the seizure if the reason for the seizure is made clear. Still less, in my view, is it sufficient to cite only the legislative provision - in this case section 139 of CEMA - and nothing else. The owner of the goods is entitled to be told in plain language why his goods are being or have been seized.
- The Defendant's email of 26 September 2012 made it quite clear that the goods had been seized because it was believed that the unique ARC had been used on more than one occasion. Whether justified or unjustified, that was a reason. The reference to the fact that "concerns into the paperwork" had been raised was rather more obscure, but if the Claimant did not understand it, it could readily have queried it.
- The Claimant relies on the words "… you will receive an official notice of seizure by post stating reason for seizure" as indicating that the email was not itself an official notice of seizure. In my view, there is no such thing as an "official notice of seizure" in the sense that CEMA does not contain a definition in such a term, although it is true that the relevant provisions of Schedule 3 are headed "Notice of seizure".
- In my view for a document to be a notice that complies with paragraph 1 of Schedule 3 it must, in writing, (a) notify the owner that his goods have been seized and (b) give a brief explanation as to why the goods have been seized. The email of 26 September 2012 does this (albeit that the Claimant already knew of the seizure).
- In relation to the letter dated 19 October 2012, the Claimant points out, correctly, that it said in terms that it was not a Notice of Seizure. However, it set out the fact of the seizure and gave the reasons for it, namely the fact that the vehicle containing the goods had previously travelled to the UK on 18 September 2012 and that there was a discrepancy between the date of the paperwork (18 September 2012) and the fact that the ARC was issued on the following day. It seems to me that this was a notice that complied with paragraph 1 of Schedule 3.
- The statement in the letter that it was not a notice of seizure was in my view wholly unjustified. It was a document giving notice of the seizure and the reason for it and those facts could not be airbrushed out by a statement that it was not a "Notice of Seizure". In my view it was no more than an improper attempt by Border Force to prevent the letter from postponing the time from which the Claimant would have one month within which to give notice of his claim that the goods were not liable to forfeiture.
- I therefore reject the submission that no notice was served in compliance with paragraph 1 of Schedule 3. Even if the email of 26 September 2012 did not contain sufficient information in relation to the concerns about the paperwork, that defect was corrected by the letter of 19 October 2012.
Conclusion
- In my judgment the Claimant's application must fail because it has failed to show that the seizure of the goods on 20 September 2013 was unlawful. It must therefore be dismissed.
- I should add that, even if I had concluded that the seizure was not lawful on public law grounds, I would not, in my discretion, have been prepared to order restoration of the goods. This is for four reasons. First, the unsatisfactory nature of Mr. Haq's witness statement, to which I have already referred. Second, the Claimant's failure to disclose the ARC relating to the consignment on 18 September 2012, which serves to reinforce suspicion that that consignment was imported unlawfully. Third, the Claimant's failure to provide any satisfactory evidence in support of its claim to ownership of the goods. Fourth, the fact that the question of whether or not the goods were liable to forfeiture will be determined in the condemnation proceedings. If it is shown that the Defendant had no reasonable grounds for seizing the goods, as the Claimant asserts, there will be a remedy.
Post script
- On 15 July 2013, as I was about to finalise this judgment, the Defendant made an application to adduce further evidence about what was known to the UKBA in relation to the goods at the time of seizure. This was, I suspect, an attempt to improve its evidence about the reasons for the seizure. The Defendant submitted that the principal issues at the hearing concerned the requirement to give a reason for the seizure and the consequences of not doing so, and that the public law challenge was at best very muted. There is some force in this. The application was opposed by the Claimant.
- However, in the light of the conclusions that I have reached at paragraphs 70 and 80-81 above it seems most unlikely that the admission of such evidence would affect the outcome of this application. However, if those reasons are wrong, then such evidence could well be relevant to the conclusion that I have reached at paragraph 77 above.
- But I understand that several linked cases, at least two involving the same Claimant, are to come before the court on 18 July 2013 and I anticipate that the outcome of that hearing may depend in part on the contents of this judgment. Accordingly, I consider that I should refuse to permit the Defendant to admit any further evidence at this stage. But, as I have indicated, such evidence may become relevant if this case is to go further.
