Commissioners of Customs and Excise v Everwine Ltd & Ors

Permission to appeal may be granted on a limited issue where the proposed ground has a real prospect of success. For statutory detention under section 139 of the Customs and Excise Management Act 1979, the goods must be liable to forfeiture. Where liability depends on section 170B, the relevant goods must be connected with a person knowingly concerned in steps directed towards fraudulent evasion of excise duty. An alleged transfer of title must therefore be established before the statutory forfeiture and detention provisions can operate. Other grounds based on findings of fact, particularly findings rejecting a witness’s evidence, will not ordinarily justify permission where no arguable error of law is shown.

Customs and Excise commenced condemnation proceedings concerning goods seized or detained after an investigation into suspected excise-duty fraud at a bonded warehouse. The goods comprised items allegedly transferred to other traders by faxed release notes and substitute spirits seized under section 140B of the Customs and Excise Management Act 1979.

The High Court judge held that title to relevant goods had passed on the sending of the release notes, that a list supplied by Everwine was materially untrue, and that the statutory forfeiture and detention provisions were engaged. Everwine sought renewed permission to appeal. The central issue was whether the judge had misunderstood the reasoning in In re Stapylton Fletcher Ltd concerning transfer of title.

1. Permission granted in part. Permission to appeal was granted only on the question whether the judge had erred in law concerning the alleged transfer of title, identified in grounds 2 and 5. The court considered that there was a real prospect of a successful appeal because the judge might have misunderstood the relevant passage in In re Stapylton Fletcher Ltd [1994] 1 WLR 1181.
2. The title issue was material to both groups of goods. If title had not passed under the release notes, the list supplied by Everwine might not have been materially untrue for the purposes of section 167(1) of the Customs and Excise Management Act 1979. The same conclusion could undermine the basis for treating the goods as liable to forfeiture under section 170B and the defence to Everwine’s claim for wrongful detention.
3. Lawful detention under section 139 depended on the goods being liable to forfeiture. If the goods remained Everwine’s property, they would not be goods of a person knowingly concerned in steps directed towards fraudulent evasion of duty under section 170B.
4. The court rejected the further permission point concerning whether the other companies were knowingly concerned in the fraud. The judge had referred to uncontradicted evidence that the companies were involved in the fraud, and that evidence justified the implied finding that section 170B was engaged if title had passed.
5. Other proposed grounds depended on factual findings made after the judge heard and rejected Mr Thakrar’s evidence. Permission was not granted on those grounds. Costs were reserved.

• High Court, Queen’s Bench Division: His Honour Judge Holman, sitting as a deputy High Court judge, made an order on 12 July 2002 in condemnation proceedings. The judge held, among other things, that title had passed under the release notes.
• Court of Appeal (Civil Division): Permission to appeal was granted, but confined to the alleged legal misdirection concerning transfer of title and In re Stapylton Fletcher Ltd [1994] 1 WLR 1181.