HM Revenue & Customs v James (t/a M&D Enterprise)

Deemed condemnation under Schedule 3 to the Customs and Excise Management Act 1979 makes the forfeiture legally final where no notice of claim is given within one month. The High Court retains jurisdiction to hear a subsequent claim concerning the seizure, but the claimant will ordinarily be precluded by abuse of process from reopening its lawfulness. A restoration application under section 152 is discretionary and does not challenge or undermine the legality of the seizure. The statutory scheme is not, without more, inconsistent with European Union or Convention rights.

HM Revenue and Customs appealed against a deputy district judge’s refusal to strike out a claim brought by the owner of a vehicle seized under section 139 of the Customs and Excise Management Act 1979. The claimant had not served a notice of claim under Schedule 3 within one month, but had sought restoration under section 152. He later claimed damages for wrongful interference with goods, alleging that the seizure was unlawful, and relied alternatively on European Union and Convention rights. The central issues were whether the High Court’s jurisdiction was ousted and whether the claim was barred as an abuse of process.

1. Jurisdiction. The statutory scheme did not expressly oust the High Court’s jurisdiction. The court should be slow to infer such an ouster, and the jurisdiction of the High Court was therefore retained.
2. Effect of deemed condemnation. Under Schedule 3, paragraphs 3 and 5, failure to give notice within one month resulted in deemed condemnation. The statutory consequence was that the vehicle was treated as forfeited and the Commissioners acquired good title retrospectively. The legality of the seizure could not be reopened in the present proceedings.
3. Abuse of process. The applicable approach was the broad, merits-based assessment described in Johnson v Gore Wood [2002] 2 AC 1. Nevertheless, the established statutory finality meant that failure to use the Schedule 3 procedure would, in most cases, preclude a later challenge to the lawfulness of the seizure. On the facts, no additional circumstance justified allowing the challenge to proceed.
4. Restoration and detention. Section 152 concerned the Commissioners’ discretionary power to restore seized or forfeited goods. A restoration decision could not reopen the legality of the seizure. The tribunal’s decision on restoration therefore did not amount to a concession about the original seizure. The case concerned seizure, not the distinct statutory concept of detention.
5. European rights. The long-established statutory procedure was not shown to be inconsistent with Article 28 of the Treaty, Council Directive 92/12/EEC, or Convention rights. Although exceptional circumstances might permit Convention issues to be considered despite deemed condemnation, there was no such additional factor here.
6. The appeal was allowed and the claim was struck out because the claimant was precluded from challenging the lawfulness of the original seizure.

1. High Court (Queen’s Bench Division): allowed HM Revenue and Customs’ appeal against the deputy district judge’s refusal to strike out the claim.
2. Deputy District Judge Watkins: refused to strike out the claim for want of jurisdiction or abuse of process.