Customs and Excise v Newbury

Liability to forfeiture includes whether forfeiture would disproportionately interfere with the claimant’s rights. A condemnation court must consider that issue under article 1 of the First Protocol to the Convention and may refuse condemnation where any forfeiture would be disproportionate.

Goods imported by one traveller for others who funded their purchase fall outside the personal-use exception in article 8 of Directive 92/12. Articles 8 and 9 are antithetical. Goods outside article 8 are treated as held for commercial purposes and may be liable to forfeiture.

The Commissioners appealed by way of case stated from Maidstone Crown Court, which had allowed Ian Newbury’s appeal against condemnation of excise goods and an Austin Montego car. The goods included tobacco and cigarettes purchased by a fellow traveller, Mrs Reed, with money supplied by family members who did not travel.

The Crown Court had held that liability depended on the lawfulness of the initial interception and that the goods were not liable to forfeiture because they were held for others. Following Hoverspeed [2002] EWCA 1804, the interception issue was no longer pursued. The central issues were whether Mrs Reed’s goods were liable to forfeiture and whether the court could assess proportionality under Community law and Convention property rights.

1. The court answered the first question “no”, reflecting the position established by Hoverspeed [2002] EWCA 1804. The legality of the initial interception did not determine liability to forfeiture.

2. The court answered question 2 “yes”. Article 8 of Directive 92/12 applies to products acquired by private individuals for their own use and transported by them. The reasoning in EMU Tabac [1998] QB 791; [1998] ECR I-01605, supported by the Advocate General and accepted in Hoverspeed [2002] EWCA 1804, treated purchase through an agent as outside article 8. The court applied that reasoning to Mrs Reed’s import. Articles 8 and 9 were antithetical, so goods outside article 8 were held for commercial purposes and chargeable under the Directive. Mrs Reed’s goods were liable to forfeiture under section 49(1) of the Customs and Excise Management Act 1979, engaging section 141(1) in relation to the other goods and the car.

3. The answer to question 3 was that the issue whether property was liable to forfeiture included whether forfeiture would be so disproportionate as to breach the claimant’s rights under article 1 of Protocol 1. This was a matter for the court’s independent judgment. Under section 6 of the Human Rights Act 1998, the court could not condemn property where doing so would itself breach Convention rights.

4. The court’s powers were all or nothing. It could refuse condemnation where any forfeiture would be disproportionate, but could not impose tailored conditions. In the circumstances, the Crown Court was entitled to find forfeiture of Mr Newbury’s goods and Mrs Newbury’s car disproportionate: only one passenger had made a non-commercial social import, and neither the car owner nor the driver knew of it. Intermediate cases remained for the Commissioners and the tribunal.

5. The appeal was dismissed so far as it related to Mr Newbury’s goods and Mrs Newbury’s car. The respondent was awarded the costs of those issues, with liberty to apply.

• High Court (Administrative Court) — On appeal by way of case stated from Maidstone Crown Court, the court answered the stated questions and dismissed the appeal insofar as it concerned Mr Newbury’s goods and Mrs Newbury’s car.
• Maidstone Crown Court — On 18 August 2002, HHJ Simpson sitting with two justices allowed the appeal from the Channel Magistrates’ Court and rejected condemnation, relying in part on R (Hoverspeed) v Commissioners of Customs and Excise [2002] EWHC 1630 Admin.
• Channel Magistrates’ Court — On 4 April 2002, ordered that the seized goods be condemned as forfeit.